Skip to Highlights

Pursuant to a congressional request, GAO provided information on the current supervisory structure for foreign banks that own U.S broker-dealers, focusing on: (1) how the structure might change as a result of proposed legislation; and (2) whether the acquisition of a broker-dealer by a foreign entity would impede U.S. regulators' ability to supervise the acquired firm. GAO noted that: (1) foreign banks that operate in the United States are supervised such that they do not have a major advantage or disadvantage compared with U.S. banks; (2) if proposed legislation is enacted, there would not necessarily be a need to change the way foreign banks or their securities are regulated, although specific provisions could have an effect on some of the regulatory provisions applicable to foreign banks; (3) the acquisition of a broker-dealer by a foreign bank should not impede U.S. regulators' abilities to supervise the firm either under current law or proposed legislation; (4) there are no special limits on the ability of a foreign-owned broker-dealer to innovate in U.S. markets; and (5) there is no reason to expect that these acquisitions will adversely affect those raising capital in the United States.

Full Report