In the United States, sperm banks are regulated as Human Cell and Tissue or Cell and Tissue Bank Product (HCT/Ps) establishments by the Food and Drug Administration (FDA) with new guidelines in effect May 25, 2005. Many states also have regulations in addition to those imposed by the FDA, including New York and California.
In the European Union a sperm bank must have a license according to the EU Tissue Directive which came into effect on April 7, 2006. In the United Kingdom, sperm banks are regulated by the Human Fertilisation and Embryology Authority.
In countries where sperm banks are allowed to operate, the sperm donor will not usually become the legal father of the children produced from the sperm he donates, but he will be the biological father of such children. In cases of surrogacy involving embryo donation, a form of gestational surrogacy, the commissioning mother or the commissioning parents will not be biologically related to the child and may need to go through an adoption procedure.
As with other forms of third party reproduction, the use of donor sperm from a sperm bank gives rise to a number of moral, legal, and ethical issues, including, but not limited to the right of the sperm donor remaining anonymous, and the child's right to know their familial background.
Furthermore, as local regulations reduce the size of the donor pool and, in some cases, exclude entire classes of potential buyers such as single women and lesbian couples, restricting donations to only heterosexual couples who are married. Some customers choose to buy abroad or on the internet, having the samples delivered at home.