OF CLEARING BANKS.

    ``(a) Conservatorship or Receivership.--
            ``(1) Appointment.--The Board may appoint a conservator or 
        receiver to take possession and control of a State bank which 
        operates, or operates as, a multilateral clearing organization 
        pursuant to section 409 of the Federal Deposit Insurance 
        Corporation Improvement Act of 1991 to the same extent and in 
        the same manner as the Comptroller of the Currency may appoint 
        a conservator or receiver for a national bank.
            ``(2) Powers.--The conservator or receiver for a State bank 
        referred to in paragraph (1) shall exercise the same powers, 
        functions, and duties, subject to the same limitations, as a 
        conservator or receiver for a national bank.
    ``(b) Board Authority.--The Board shall have the same authority 
with respect to any conservator or receiver appointed under subsection 
(a), and the State bank for which the conservator or receiver has been 
appointed, as the Comptroller of the Currency has with respect to a 
conservator or receiver for a national bank and the national bank for 
which the conservator or receiver has been appointed.
    ``(c) Bankruptcy Proceedings.--The Comptroller of the Currency (in 
the case of a national bank which operates, or operates as, a 
multilateral clearing organization pursuant to section 409 of the 
Federal Deposit Insurance Corporation Improvement Act of 1991) or the 
Board (in the case of a State bank which operates, or operates as, such 
a multilateral clearing organization) may direct a conservator or 
receiver appointed for such bank to file a petition pursuant to title 
11, United States Code, in which case, title 11, United States Code, 
shall apply to such bank in lieu of otherwise applicable Federal or 
State insolvency law.''.
    (b) Technical and Conforming Amendments to Title 11, United States 
Code.--
            (1) Bankruptcy code debtors.--Section 109(b)(2) of title 
        11, United States Code, is amended by striking `; or' and 
        inserting the following: `, except that a bank or a corporation 
        organized under section 25A of the Federal Reserve Act which 
        operates, or operates as, a multilateral clearing organization 
        pursuant to section 409 of the Federal Deposit Insurance 
        Corporation Improvement Act of 1991 may be a debtor if a 
        petition is filed at the direction of the Comptroller of the 
        Currency (in the case of a national bank) or the Board of 
        Governors of the Federal Reserve System (in the case of a State 
        bank or such a corporation); or''.
            (2) Chapter 7 debtors.--Section 109(d) of title 11, United 
        States Code, is amended to read as follows:
    ``(d) Only a railroad, a person that may be a debtor under chapter 
7 of this title (except a stockbroker or a commodity broker), and a 
bank or a corporation organized under section 25A of the Federal 
Reserve Act which operates, or operates as, a multilateral clearing 
organization pursuant to section 409 of the Federal Deposit Insurance 
Corporation Improvement Act of 1991 may be a debtor under chapter 11 of 
this title.''.
            (3) Definition of financial institution.--Section 101(22) 
        of title 11, United States Code, is amended to read as follows:
            ``(22) the term `financial institution'--
                    ``(A) means a person that is a commercial or 
                savings bank, industrial savings bank, savings and loan 
                association, trust company, a bank or a corporation 
                organized under section 25A of the Federal Reserve Act 
                and, when any such person is acting as agent or 
                custodian for a customer in connection with a 
                securities contract, as defined in section 741 of this 
                title, such customer; and
                    ``(B) includes any person described in subparagraph 
                (A) which operates, or operates as, a multilateral 
                clearing organization pursuant to section 409 of the 
                Federal Deposit Insurance Corporation Improvement Act 
                of 1991;''.
            (4) Subchapter v of chapter 7.--
                    (A) In general.--Section 103 of title 11, United 
                States Code, is amended--
                            (i) by redesignating subsections (e) 
                        through (i) as subsections (f) through (j), 
                        respectively; and
                            (ii) by inserting after subsection (d) the 
                        following new subsection:
    ``(e) Scope of Application.--Subchapter V of chapter 7 of this 
title shall apply only in a case under such chapter concerning the 
liquidation of a bank or a corporation organized under section 25A of 
the Federal Reserve Act which operates, or operates as, a multilateral 
clearing organization pursuant to section 409 of the Federal Deposit 
Insurance Corporation Improvement Act of 1991.''.
                    (B) Clearing bank liquidation.--Chapter 7 of title 
                11, United States Code, is amended by adding at the end 
                the following new subchapter:

               ``Subchapter V--Clearing Bank Liquidation

``Sec. Sec. 781. Definitions.
    ``For purposes of this subchapter, the following definitions shall 
apply:
            ``(1) Board.--The term `Board' means the Board of Governors 
        of the Federal Reserve System.
            ``(2) Depository institution.--The term `depository 
        institution' has the same meaning as in section 3 of the 
        Federal Deposit Insurance Act, and includes any wholesale bank.
            ``(3) Clearing bank.--The term `clearing bank' means a 
        national or State bank, or a corporation organized under 
        section 25A of the Federal Reserve Act, which operates, or 
        operates as, a multilateral clearing organization pursuant to 
        section 409 of the Federal Deposit Insurance Corporation 
        Improvement Act of 1991.
``Sec. Sec. 782. Selection of trustee
    ``(a) In General.--
            ``(1) Appointment.--Notwithstanding any other provision of 
        this title, the conservator or receiver who files the petition 
        shall be the trustee under this chapter, unless the Comptroller 
        of the Currency (in the case of a clearing bank for which the 
        Comptroller of the Currency appointed a conservator or 
        receiver) or the Board (in the case of any clearing bank for 
        which the Board appointed a conservator or receiver) designates 
        an alternative trustee.
            ``(2) Successor.--The Comptroller of the Currency or the 
        Board of Governors of the Federal Reserve System (as the case 
        may be) may designate a successor trustee, if required.
    ``(b) Authority of Trustee.--Whenever the Comptroller of the 
Currency or the Board appoints or designates a trustee, chapter 3 and 
sections 704 and 705 of this title shall apply to the Comptroller or 
the Board, as applicable, in the same way and to the same extent that 
they apply to a United States trustee.
``Sec. Sec. 783. Additional powers of trustee
    ``(a) Distribution of Nonestate Property.--The trustee under this 
subchapter has power to distribute property not of the estate, 
including distributions to customers that are mandated by subchapters 
III and IV of this chapter.
    ``(b) Disposition of Institution.--The trustee under this 
subchapter may, after notice and a hearing--
            ``(1) sell the clearing bank to a depository institution or 
        consortium of depository institutions (which consortium may 
agree on the allocation of the clearing bank among the consortium);
            ``(2) merge the clearing bank with a depository 
        institution;
            ``(3) transfer contracts to the same extent as could a 
        receiver for a depository institution under paragraphs (9) and 
        (10) of section 11(e) of the Federal Deposit Insurance Act;
            ``(4) transfer assets or liabilities to a depository 
        institution;
            ``(5) transfer assets and liabilities to a bridge bank as 
        provided in paragraphs (1), (3)(A), (5), (6), of section 11(n) 
        of the Federal Deposit Insurance Act, paragraphs (9) through 
        (13) of such section, and subparagraphs (A) through (H) and 
        subparagraph (K) of paragraph (4) of such section 11(n), except 
        that--
                    ``(A) the bridge bank to which such assets or 
                liabilities are transferred shall be treated as a 
                clearing bank for the purpose of this subsection; and
                    ``(B) any references in any such provision of law 
                to the Federal Deposit Insurance Corporation shall be 
                construed to be references to the appointing agency and 
                that references to deposit insurance shall be omitted.
    ``(c) Certain Transfers Included.--Any reference in this section to 
transfers of liabilities includes a ratable transfer of liabilities 
within a priority class.
``Sec. Sec. 784. Right to be heard
    ``The Comptroller of the Currency (in the case of a clearing bank 
for which the Comptroller of the Currency appointed a conservator or 
receiver), the Board of Governors of the Federal Reserve System (in the 
case of any clearing bank for which the Board appointed a conservator 
or receiver), or a Federal reserve bank (in the case of a clearing bank 
that is a member of that bank) may raise and may appear and be heard on 
any issue in a case under this subchapter.''.
    (c) Conforming Amendment.--The table of sections for chapter 7 of 
title 11, United States Code, is amended by adding at the end the 
following new items:

               ``Subchapter V--Clearing Bank Liquidation

``Sec.
``781. Definitions.
``782. Selection of trustee.
``783. Additional powers of trustee.
``784. Right to be heard.''.
    (d) Resolution of Edge Act Corporations.--The 16th undesignated 
paragraph of section 25A of the Federal Reserve Act (12 U.S.C. 624) is 
amended to read as follows:
            ``(16) Appointment of receiver or conservator.--
                    ``(A) In general.--The Board may appoint a 
                conservator or receiver for a corporation organized 
                under the provisions of this section to the same extent 
                and in the same manner as the Comptroller of the 
                Currency may appoint a conservator or receiver for a 
                national bank, and the conservator or receiver for such 
                corporation shall exercise the same powers, functions, 
                and duties, subject to the same limitations, as a 
                conservator or receiver for a national bank.
                    ``(B) Equivalent authority.--The Board shall have 
                the same authority with respect to any conservator or 
                receiver appointed for a corporation organized under 
                the provisions of this section under this paragraph and 
                any such corporation as the Comptroller of the Currency 
                has with respect to a conservator or receiver of a 
                national bank and the national bank for which a 
                conservator or receiver has been appointed.
                    ``(C) Title 11 petitions.--The Board may direct the 
                conservator or receiver of a corporation organized 
                under the provisions of this section to file a petition 
                pursuant to title 11, United States Code, in which 
                case, title 11, United States Code, shall apply to the 
                corporation in lieu of otherwise applicable Federal or 
                State insolvency law.''.

SEC. 7. RELATION TO STATE LAW.

    No state or local law that prohibits or regulates gaming or the 
operation of ``bucket shops'' (other than anti-fraud provisions of 
general applicability) shall be deemed to govern or be in any way 
applicable to any over-the-counter derivative instrument (as defined in 
section 408(2) of the Federal Deposit Insurance Corporation Improvement 
Act of 1991) to which a financial institution (as defined in or under 
section 402(9) of such Act or in or under section 509(3)(A) of the 
Gramm-Leach-Bliley Act) is a party.
Sets forth rules of construction to emphasize that the Commodity Futures Trading Commission and the Securities and Exchange Commission retain their inherent jurisdiction over the trading and clearing activities within their respective purviews.
States that a multilateral clearing organization under the jurisdiction of the Board of Governors of the Federal Reserve System (the Board) or the Comptroller of the Currency does not fall within the jurisdiction of any other Federal entity as a result of clearing any over-the-counter derivative instrument.
States that no over-the-counter instrument to which a financial institution is a party shall be subject to rescission or held unenforceable based solely on the regulatory status or jurisdiction over such instrument under Federal or State law.
Provides that an over-the-counter instrument does not fall within the purview of the Commodity Exchange Act as a consequence of being the subject of an electronic trade or communication.
Authorizes the Board to appoint a conservator or receiver to take possession and control of a State bank which operates, or operates as, a multilateral clearing organization in the same manner as the Comptroller of the Currency may do so.
Over-the-Counter Derivatives Systemic Risk Reduction Act of 2000