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SECTION 1. SHORT TITLE.

This Act may be cited as the ''Financial Services Act of 1993''.

SEC. 2. AUTHORIZATION FOR A SUBSIDIARY OF A NATIONAL BANK TO UNDERWRITE
SHARES OF AND SPONSOR INVESTMENT COMPANIES.

Section 5136 of the Revised Statutes of the United States (12
U.S.C. 24) is amended by adding at the end the following new paragraph:
''(11) Mutual funds.--
''(A) In general.--Notwithstanding the restrictions
and limitations in the paragraph designated 'Seventh',
to engage in the business of dealing in, underwriting,
and distributing the shares of any investment company
(as defined in section 3 of the Investment Company Act
of 1940) and to organize, sponsor, manage, or control
such an investment company if such activities are
conducted through a nonbank subsidiary of the bank.
''(B) Coordination with other provisions.--The
activities authorized by this paragraph are in addition
to any other activity in which a national bank may
engage directly pursuant to another provision of law,
or as otherwise authorized by the Comptroller of the
Currency, and this paragraph shall not be construed as
prohibiting a national bank from engaging in such other
activity directly.
''(C) Subsidiary defined.--For purposes of this
paragraph, the term 'subsidiary' means a corporation
more than 25 percent of the voting stock of which is
owned by a national bank. Such a corporation may be a
subsidiary of more than 1 national bank.''.

SEC. 3. AUTHORIZATION FOR A SUBSIDIARY OF A STATE MEMBER BANK TO
UNDERWRITE SHARES OF AND SPONSOR INVESTMENT COMPANIES.

The 20th undesignated paragraph of section 9 of the Federal Reserve
Act (12 U.S.C. 335) is amended by inserting before the period at the
end the following: '', and to the same exception to such limitations
and conditions as is applicable to national banks under paragraph (11)
of such section''.

SEC. 4. DISCLOSURE REQUIREMENTS APPLICABLE TO SUBSIDIARIES OF NATIONAL
AND STATE MEMBER BANKS.

The Federal Reserve Act is amended by inserting after section 9A of
the Federal Reserve Act (12 U.S.C. 339) the following new section:

''SEC. 9B. DISCLOSURE REQUIREMENTS.

''(a) In General.--If a nonbank subsidiary of a national bank or
State member bank engages in activities pursuant to section 5136(11) of
the Revised Statutes of the United States or the 20th undesignated
paragraph of section 9 of this Act, the subsidiary shall--
''(1) provide a 1-time written disclosure to each customer
that--
''(A) the subsidiary is not an insured depository
institution;
''(B) the subsidiary is a separate corporate entity
from any insured depository institution which is an
affiliate of the subsidiary; and
''(C) any product sold, offered, or recommended by
the subsidiary is not insured by the Federal Deposit
Insurance Corporation, is not guaranteed by an insured
depository institution, and is not otherwise an
obligation of an insured depository institution; and
''(2) obtain a 1-time written acknowledgement from each
customer that the disclosures described in paragraph (1) have
been received.
''(b) Regulation of Method of Disclosures.--Any disclosures under
subsection (a) shall be made in accordance with such regulations as may
be prescribed--
''(1) by the Comptroller of the Currency, in the case of a
subsidiary of a national bank; or
''(2) by the Board, in the case of a subsidiary of a State
member bank.
''(c) Exceptions and Additional Information.--The Comptroller of
the Currency, in the case of a subsidiary of a national bank, and the
Board, in the case of a subsidiary of a State member bank, may--
''(1) require additional information to be disclosed under
subsection (a) by the subsidiary; and
''(2) grant any exception to the disclosure requirement
under subsection (a) which is consistent with the purposes of
such subsection.''.

SEC. 5. AUTHORIZATION FOR A MEMBER BANK TO BE AFFILIATED WITH A COMPANY
WHICH UNDERWRITES SHARES OF AND SPONSORS INVESTMENT
COMPANIES.

The 1st sentence of section 20 of the Banking Act of 1933 (12
U.S.C. 377) is amended by striking ''securities: Provided, That nothing
in this paragraph'' and inserting '', except to the extent such
affiliate is engaged in activities in accordance with section 5136(11)
of the Revised Statutes of the United States, the 20th undesignated
paragraph of section 9 of the Federal Reserve Act, or section 4(c)(15)
of the Bank Holding Company Act of 1956. Nothing in this paragraph''.

SEC. 6. AUTHORIZATION FOR A MEMBER BANK AND AN AFFILIATE ENGAGED IN
INVESTMENT COMPANY ACTIVITIES TO HAVE MANAGEMENT
INTERLOCKS.

Section 32 of the Banking Act of 1933 (12 U.S.C. 78) is amended--
(1) by inserting ''(a) General Prohibition and Exception.--
'' before ''No officer,''; and
(2) by adding at the end the following new subsection:
''(b) Exception for Affiliates Engaged in Investment Company
Activities.--Subsection (a) shall not apply so as to prohibit an
officer, director, or employee of a nonbank subsidiary of a national
bank, State member bank, or bank holding company which is engaged in
activities in accordance with section 5136(11) of the Revised Statutes
of the United States, the 20th undesignated paragraph of section 9 of
the Federal Reserve Act, or section 4(c)(15) of the Bank Holding
Company Act of 1956 from serving at the same time as an officer,
director, or employee of such bank, the bank holding company, a member
bank which is an affiliate of such bank, or an investment company that
is organized, sponsored, managed, or controlled by a subsidiary of such
bank or holding company.''.

SEC. 7. AUTHORIZATION FOR A BANK HOLDING COMPANY TO ESTABLISH A COMPANY
WHICH UNDERWRITES SHARES OF AND SPONSORS INVESTMENT
COMPANIES.

(a) In General.--Section 4(c) of the Bank Holding Company Act of
1956 (12 U.S.C. 1843(c)) is amended--
(1) by striking ''or'' at the end of paragraph (13);
(2) by striking the period at the end of paragraph
(14)(H)(ii) and inserting ''; or''; and
(3) by inserting after paragraph (14)(H)(ii) the following
new paragraph:
''(15) shares of any company engaged in dealing in,
underwriting, or distributing the shares of any investment
company (as defined in section 3 of the Investment Company Act
of 1940), or organizing, sponsoring, managing, or controlling
such investment company.''.
(b) Disclosure Requirements.--Section 4 of the Bank Holding Company
Act of 1956 (12 U.S.C. 1843) is amended by adding at the end the
following new subsection:
''(j) Disclosure Requirements for Subsection (c)(15) Activities.--
''(1) In general.--Any bank holding company which controls
a company described in subsection (c)(15) shall require such
company to--
''(A) provide a 1-time written disclosure to each
customer that--
''(i) the company is not an insured
depository institution;
''(ii) the company is a separate corporate
entity from any insured depository institution
which is an affiliate of the company; and
''(iii) any product sold, offered, or
recommended by the company is not insured by
the Federal Deposit Insurance Corporation, is
not guaranteed by an insured depository
institution, and is not otherwise an obligation
of an insured depository institution; and
''(B) obtain a 1-time written acknowledgement from
each customer that the disclosures described in
subparagraph (A) have been received.
''(2) Regulation of method of disclosures.--Any disclosures
under paragraph (1) shall be made in accordance with such
regulations as the Board may prescribe.
''(3) Exceptions and additional information.--The Board
may--
''(A) require additional information to be
disclosed by the company under paragraph (1); and
''(B) grant any exception to the disclosure
requirement under paragraph (1) which is consistent
with the purposes of such subsection.''.
Financial Services Act of 1993 - Amends the Revised Statutes of the United States to permit national banks to engage in mutual fund dealing, underwriting, distribution, and sponsorship, if such activities are conducted through nonbank subsidiaries.
Amends the Federal Reserve Act to set forth certain disclosure requirements for nonbank subsidiaries of State or national member banks engaged in mutual fund activities, including a one-time written disclosure to each customer that neither the subsidiary nor its investment products are insured.
Amends the Banking Act of 1933 (Glass-Steagall Act) to permit: (1) a member bank, including a national bank, to be affiliated with a company engaged in investment company activities; and (2) management interlocks between either a member bank, or a bank holding company, and their respective affiliates engaged in investment company activities. (Current law proscribes such interlocks.)
Amends the Bank Holding Company Act of 1956 to permit a bank holding company to acquire investment company securities. (Current law prohibits such acquisition.) Sets forth one-time disclosure requirements regarding such acquisitions which reflect the disclosure requirements applicable to national and State banks under this Act.