388
‘‘(ii) any agreement or transaction 
that is similar to any other agreement or 
transaction referred to in this paragraph 
and that—
‘‘(I) is of a type that has been, is 
presently, or in the future becomes, 
the subject of recurrent dealings in 
the swap markets (including terms 
and conditions incorporated by ref-
erence therein); and 
‘‘(II) is a forward, swap, future, 
or option on one or more rates, cur-
rencies, commodities, equity securities, 
or other equity instruments, debt se-
curities or other debt instruments, 
quantitative measures associated with 
an occurrence, extent of an occur-
rence, or contingency associated with 
a financial, commercial, or economic 
consequence, or economic or financial 
indices or measures of economic or fi-
nancial risk or value; 
‘‘(iii) any combination of agreements 
or transactions referred to in this subpara-
graph;
389
‘‘(iv) any option to enter into an 
agreement or transaction referred to in 
this subparagraph; 
‘‘(v) a master agreement that provides 
for an agreement or transaction referred to 
in clause (i), (ii), (iii), or (iv), together 
with all supplements to any such master 
agreement, and without regard to whether 
the master agreement contains an agree-
ment or transaction that is not a swap 
agreement under this paragraph, except 
that the master agreement shall be consid-
ered to be a swap agreement under this 
paragraph only with respect to each agree-
ment or transaction under the master 
agreement that is referred to in clause (i), 
(ii), (iii), or (iv); or 
‘‘(vi) any security agreement or ar-
rangement or other credit enhancement re-
lated to any agreements or transactions re-
ferred to in clause (i) through (v), includ-
ing any guarantee or reimbursement obli-
gation by or to a swap participant or fi-
nancial participant in connection with any 
agreement or transaction referred to in
390
any such clause, but not to exceed the 
damages in connection with any such 
agreement or transaction, measured in ac-
cordance with section 562; and 
‘‘(B) is applicable for purposes of this title 
only, and shall not be construed or applied so 
as to challenge or affect the characterization, 
definition, or treatment of any swap agreement 
under any other statute, regulation, or rule, in-
cluding the Securities Act of 1933, the Securi-
ties Exchange Act of 1934, the Public Utility 
Holding Company Act of 1935, the Trust In-
denture Act of 1939, the Investment Company 
Act of 1940, the Investment Advisers Act of 
1940, the Securities Investor Protection Act of 
1970, the Commodity Exchange Act, the 
Gramm-Leach-Bliley Act, and the Legal Cer-
tainty for Bank Products Act of 2000;’’; 
(2) in section 741(7), by striking paragraph (7) 
and inserting the following: 
‘‘(7) ‘securities contract’—
‘‘(A) means—
‘‘(i) a contract for the purchase, sale, 
or loan of a security, a certificate of de-
posit, a mortgage loan or any interest in a
391
mortgage loan, a group or index of securi-
ties, certificates of deposit, or mortgage 
loans or interests therein (including an in-
terest therein or based on the value there-
of), or option on any of the foregoing, in-
cluding an option to purchase or sell any 
such security, certificate of deposit, mort-
gage loan, interest, group or index, or op-
tion, and including any repurchase or re-
verse repurchase transaction on any such 
security, certificate of deposit, mortgage 
loan, interest, group or index, or option; 
‘‘(ii) any option entered into on a na-
tional securities exchange relating to for-
eign currencies; 
‘‘(iii) the guarantee by or to any secu-
rities clearing agency of a settlement of 
cash, securities, certificates of deposit, 
mortgage loans or interests therein, group 
or index of securities, or mortgage loans or 
interests therein (including any interest 
therein or based on the value thereof), or 
option on any of the foregoing, including 
an option to purchase or sell any such se-
392
curity, certificate of deposit, mortgage 
loan, interest, group or index, or option; 
‘‘(iv) any margin loan; 
‘‘(v) any other agreement or trans-
action that is similar to an agreement or 
transaction referred to in this subpara-
graph; 
‘‘(vi) any combination of the agree-
ments or transactions referred to in this 
subparagraph; 
‘‘(vii) any option to enter into any 
agreement or transaction referred to in 
this subparagraph; 
‘‘(viii) a master agreement that pro-
vides for an agreement or transaction re-
ferred to in clause (i), (ii), (iii), (iv), (v), 
(vi), or (vii), together with all supplements 
to any such master agreement, without re-
gard to whether the master agreement pro-
vides for an agreement or transaction that 
is not a securities contract under this sub-
paragraph, except that such master agree-
ment shall be considered to be a securities 
contract under this subparagraph only with 
respect to each agreement or transaction
393
under such master agreement that is re-
ferred to in clause (i), (ii), (iii), (iv), (v), 
(vi), or (vii); or 
‘‘(ix) any security agreement or ar-
rangement or other credit enhancement re-
lated to any agreement or transaction re-
ferred to in this subparagraph, including 
any guarantee or reimbursement obligation 
by or to a stockbroker, securities clearing 
agency, financial institution, or financial 
participant in connection with any agree-
ment or transaction referred to in this sub-
paragraph, but not to exceed the damages 
in connection with any such agreement or 
transaction, measured in accordance with 
section 562; and 
‘‘(B) does not include any purchase, sale, 
or repurchase obligation under a participation 
in a commercial mortgage loan;’’; and 
(3) in section 761(4)—
(A) by striking ‘‘or’’ at the end of subpara-
graph (D); and 
(B) by adding at the end the following:
394
‘‘(F) any other agreement or transaction 
that is similar to an agreement or transaction 
referred to in this paragraph; 
‘‘(G) any combination of the agreements or 
transactions referred to in this paragraph; 
‘‘(H) any option to enter into an agree-
ment or transaction referred to in this para-
graph; 
‘‘(I) a master agreement that provides for 
an agreement or transaction referred to in sub-
paragraph (A), (B), (C), (D), (E), (F), (G), or 
(H), together with all supplements to such mas-
ter agreement, without regard to whether the 
master agreement provides for an agreement or 
transaction that is not a commodity contract 
under this paragraph, except that the master 
agreement shall be considered to be a com-
modity contract under this paragraph only with 
respect to each agreement or transaction under 
the master agreement that is referred to in sub-
paragraph (A), (B), (C), (D), (E), (F), (G), or 
(H); or 
‘‘(J) any security agreement or arrange-
ment or other credit enhancement related to 
any agreement or transaction referred to in this
395
paragraph, including any guarantee or reim-
bursement obligation by or to a commodity 
broker or financial participant in connection 
with any agreement or transaction referred to 
in this paragraph, but not to exceed the dam-
ages in connection with any such agreement or 
transaction, measured in accordance with sec-
tion 562;’’. 
(b) DEFINITIONS OF FINANCIAL INSTITUTION, FI-
NANCIAL PARTICIPANT, AND FORWARD CONTRACT MER-
CHANT.—Section 101 of title 11, United States Code, is 
amended—
(1) by striking paragraph (22) and inserting 
the following: 
‘‘(22) ‘financial institution’ means—
‘‘(A) a Federal reserve bank, or an entity 
(domestic or foreign) that is a commercial or 
savings bank, industrial savings bank, savings 
and loan association, trust company, federally-
insured credit union, or receiver, liquidating 
agent, or conservator for such entity and, when 
any such Federal reserve bank, receiver, liqui-
dating agent, conservator or entity is acting as 
agent or custodian for a customer in connection
396
with a securities contract (as defined in section 
741) such customer; or 
‘‘(B) in connection with a securities con-
tract (as defined in section 741) an investment 
company registered under the Investment Com-
pany Act of 1940;’’; 
(2) by inserting after paragraph (22) the fol-
lowing: 
‘‘(22A) ‘financial participant’ means—
‘‘(A) an entity that, at the time it enters 
into a securities contract, commodity contract, 
swap agreement, repurchase agreement, or for-
ward contract, or at the time of the date of the 
filing of the petition, has one or more agree-
ments or transactions described in paragraph 
(1), (2), (3), (4), (5), or (6) of section 561(a) 
with the debtor or any other entity (other than 
an affiliate) of a total gross dollar value of not 
less than $1,000,000,000 in notional or actual 
principal amount outstanding on any day dur-
ing the previous 15-month period, or has gross 
mark-to-market positions of not less than 
$100,000,000 
(aggregated 
across 
counterparties) in one or more such agreements 
or transactions with the debtor or any other en-
397
tity (other than an affiliate) on any day during 
the previous 15-month period; or 
‘‘(B) a clearing organization (as defined in 
section 402 of the Federal Deposit Insurance 
Corporation Improvement Act of 1991);’’; and 
(3) by striking paragraph (26) and inserting 
the following: 
‘‘(26) ‘forward contract merchant’ means a 
Federal reserve bank, or an entity the business of 
which consists in whole or in part of entering into 
forward contracts as or with merchants in a com-
modity (as defined in section 761) or any similar 
good, article, service, right, or interest which is pres-
ently or in the future becomes the subject of dealing 
in the forward contract trade;’’. 
(c) DEFINITION OF MASTER NETTING AGREEMENT 
AND MASTER NETTING AGREEMENT PARTICIPANT.—Sec-
tion 101 of title 11, United States Code, is amended by 
inserting after paragraph (38) the following new para-
graphs: 
‘‘(38A) ‘master netting agreement’—
‘‘(A) means an agreement providing for 
the exercise of rights, including rights of net-
ting, setoff, liquidation, termination, accelera-
tion, or close out, under or in connection with
398
one or more contracts that are described in any 
one or more of paragraphs (1) through (5) of 
section 561(a), or any security agreement or ar-
rangement or other credit enhancement related 
to one or more of the foregoing, including any 
guarantee or reimbursement obligation related 
to 1 or more of the foregoing; and 
‘‘(B) if the agreement contains provisions 
relating to agreements or transactions that are 
not contracts described in paragraphs (1) 
through (5) of section 561(a), shall be deemed 
to be a master netting agreement only with re-
spect to those agreements or transactions that 
are described in any one or more of paragraphs 
(1) through (5) of section 561(a); 
‘‘(38B) ‘master netting agreement participant’ 
means an entity that, at any time before the date of 
the filing of the petition, is a party to an out-
standing master netting agreement with the debt-
or;’’. 
(d) SWAP AGREEMENTS, SECURITIES CONTRACTS, 
COMMODITY CONTRACTS, FORWARD CONTRACTS, REPUR-
CHASE AGREEMENTS, AND MASTER NETTING AGREE-
MENTS UNDER THE AUTOMATIC-STAY.—
399
(1) IN GENERAL.—Section 362(b) of title 11, 
United States Code, as amended by sections 224, 
303, 311, 401, and 718, is amended—
(A) in paragraph (6), by inserting ‘‘, 
pledged to, under the control of,’’ after ‘‘held 
by’’; 
(B) in paragraph (7), by inserting ‘‘, 
pledged to, under the control of,’’ after ‘‘held 
by’’; 
(C) by striking paragraph (17) and insert-
ing the following: 
‘‘(17) under subsection (a), of the setoff by a 
swap participant or financial participant of a mutual 
debt and claim under or in connection with one or 
more swap agreements that constitutes the setoff of 
a claim against the debtor for any payment or other 
transfer of property due from the debtor under or in 
connection with any swap agreement against any 
payment due to the debtor from the swap partici-
pant or financial participant under or in connection 
with any swap agreement or against cash, securities, 
or other property held by, pledged to, under the con-
trol of, or due from such swap participant or finan-
cial participant to margin, guarantee, secure, or set-
tle any swap agreement;’’; and
400
(D) by inserting after paragraph (26) the 
following: 
‘‘(27) under subsection (a), of the setoff by a 
master netting agreement participant of a mutual 
debt and claim under or in connection with one or 
more master netting agreements or any contract or 
agreement subject to such agreements that con-
stitutes the setoff of a claim against the debtor for 
any payment or other transfer of property due from 
the debtor under or in connection with such agree-
ments or any contract or agreement subject to such 
agreements against any payment due to the debtor 
from such master netting agreement participant 
under or in connection with such agreements or any 
contract or agreement subject to such agreements or 
against cash, securities, or other property held by, 
pledged to, under the control of, or due from such 
master netting agreement participant to margin, 
guarantee, secure, or settle such agreements or any 
contract or agreement subject to such agreements, 
to the extent that such participant is eligible to exer-
cise such offset rights under paragraph (6), (7), or 
(17) for each individual contract covered by the mas-
ter netting agreement in issue; and’’.
401
(2) LIMITATION.—Section 362 of title 11, 
United States Code, as amended by sections 106, 
305, 311, and 441, is amended by adding at the end 
the following: 
‘‘(o) The exercise of rights not subject to the stay 
arising under subsection (a) pursuant to paragraph (6), 
(7), (17), or (27) of subsection (b) shall not be stayed 
by any order of a court or administrative agency in any 
proceeding under this title.’’. 
(e) LIMITATION
OF AVOIDANCE POWERS UNDER 
MASTER NETTING AGREEMENT.—Section 546 of title 11, 
United States Code, is amended—
(1) in subsection (g) (as added by section 103 
of Public Law 101–311)—
(A) by striking ‘‘under a swap agreement’’; 
(B) by striking ‘‘in connection with a swap 
agreement’’ and inserting ‘‘under or in connec-
tion with any swap agreement’’; and 
(C) by inserting ‘‘or financial participant’’ 
after ‘‘swap participant’’; and 
(2) by adding at the end the following: 
‘‘(j) Notwithstanding sections 544, 545, 547, 
548(a)(1)(B), and 548(b) the trustee may not avoid a 
transfer made by or to a master netting agreement partici-
pant under or in connection with any master netting
402
agreement or any individual contract covered thereby that 
is made before the commencement of the case, except 
under section 548(a)(1)(A) and except to the extent that 
the trustee could otherwise avoid such a transfer made 
under an individual contract covered by such master net-
ting agreement.’’. 
(f) FRAUDULENT TRANSFERS OF MASTER NETTING 
AGREEMENTS.—Section 548(d)(2) of title 11, United 
States Code, is amended—
(1) in subparagraph (C), by striking ‘‘and’’ at 
the end; 
(2) in subparagraph (D), by striking the period 
and inserting ‘‘; and’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(E) a master netting agreement participant 
that receives a transfer in connection with a master 
netting agreement or any individual contract covered 
thereby takes for value to the extent of such trans-
fer, except that, with respect to a transfer under any 
individual contract covered thereby, to the extent 
that such master netting agreement participant oth-
erwise did not take (or is otherwise not deemed to 
have taken) such transfer for value.’’.
403
(g) TERMINATION OR ACCELERATION OF SECURITIES 
CONTRACTS.—Section 555 of title 11, United States Code, 
is amended—
(1) by amending the section heading to read as 
follows: 
‘‘§ 555. Contractual right to liquidate, terminate, or 
accelerate a securities contract’’; 
and 
(2) in the first sentence, by striking ‘‘liquida-
tion’’ and inserting ‘‘liquidation, termination, or ac-
celeration’’. 
(h) TERMINATION OR ACCELERATION OF COMMOD-
ITIES OR FORWARD CONTRACTS.—Section 556 of title 11, 
United States Code, is amended—
(1) by amending the section heading to read as 
follows: 
‘‘§ 556. Contractual right to liquidate, terminate, or 
accelerate a commodities contract or for-
ward contract’’; 
(2) in the first sentence, by striking ‘‘liquida-
tion’’ and inserting ‘‘liquidation, termination, or ac-
celeration’’; and 
(3) in the second sentence, by striking ‘‘As 
used’’ and all that follows through ‘‘right,’’ and in-
serting ‘‘As used in this section, the term ‘contrac-
404
tual right’ includes a right set forth in a rule or 
bylaw of a derivatives clearing organization (as de-
fined in the Commodity Exchange Act), a multilat-
eral clearing organization (as defined in the Federal 
Deposit Insurance Corporation Improvement Act of 
1991), a national securities exchange, a national se-
curities association, a securities clearing agency, a 
contract market designated under the Commodity 
Exchange Act, a derivatives transaction execution 
facility registered under the Commodity Exchange 
Act, or a board of trade (as defined in the Com-
modity Exchange Act) or in a resolution of the gov-
erning board thereof and a right,’’. 
(i) TERMINATION
OR ACCELERATION
OF REPUR-
CHASE AGREEMENTS.—Section 559 of title 11, United 
States Code, is amended—
(1) by amending the section heading to read as 
follows: 
‘‘§ 559. Contractual right to liquidate, terminate, or 
accelerate a repurchase agreement’’; 
(2) in the first sentence, by striking ‘‘liquida-
tion’’ and inserting ‘‘liquidation, termination, or ac-
celeration’’; and 
(3) in the third sentence, by striking ‘‘As used’’ 
and all that follows through ‘‘right,’’ and inserting
405
‘‘As used in this section, the term ‘contractual right’ 
includes a right set forth in a rule or bylaw of a de-
rivatives clearing organization (as defined in the 
Commodity Exchange Act), a multilateral clearing 
organization (as defined in the Federal Deposit In-
surance Corporation Improvement Act of 1991), a 
national securities exchange, a national securities as-
sociation, a securities clearing agency, a contract 
market designated under the Commodity Exchange 
Act, a derivatives transaction execution facility reg-
istered under the Commodity Exchange Act, or a 
board of trade (as defined in the Commodity Ex-
change Act) or in a resolution of the governing 
board thereof and a right,’’. 
(j) LIQUIDATION, TERMINATION, OR ACCELERATION 
OF SWAP AGREEMENTS.—Section 560 of title 11, United 
States Code, is amended—
(1) by amending the section heading to read as 
follows: 
‘‘§ 560. Contractual right to liquidate, terminate, or 
accelerate a swap agreement’’; 
(2) in the first sentence, by striking ‘‘termi-
nation of a swap agreement’’ and inserting ‘‘liquida-
tion, termination, or acceleration of one or more 
swap agreements’’;
406
(3) by striking ‘‘in connection with any swap 
agreement’’ and inserting ‘‘in connection with the 
termination, liquidation, or acceleration of one or 
more swap agreements’’; and 
(4) in the second sentence, by striking ‘‘As 
used’’ and all that follows through ‘‘right,’’ and in-
serting ‘‘As used in this section, the term ‘contrac-
tual right’ includes a right set forth in a rule or 
bylaw of a derivatives clearing organization (as de-
fined in the Commodity Exchange Act), a multilat-
eral clearing organization (as defined in the Federal 
Deposit Insurance Corporation Improvement Act of 
1991), a national securities exchange, a national se-
curities association, a securities clearing agency, a 
contract market designated under the Commodity 
Exchange Act, a derivatives transaction execution 
facility registered under the Commodity Exchange 
Act, or a board of trade (as defined in the Com-
modity Exchange Act) or in a resolution of the gov-
erning board thereof and a right,’’. 
(k) LIQUIDATION, TERMINATION, ACCELERATION, OR 
OFFSET UNDER A MASTER NETTING AGREEMENT AND 
ACROSS CONTRACTS.—
407
(1) IN
GENERAL.—Title 11, United States 
Code, is amended by inserting after section 560 the 
following: 
‘‘§ 561. Contractual right to terminate, liquidate, ac-
celerate, or offset under a master netting 
agreement and across contracts; pro-
ceedings under chapter 15
‘‘(a) Subject to subsection (b), the exercise of any 
contractual right, because of a condition of the kind speci-
fied in section 365(e)(1), to cause the termination, liquida-
tion, or acceleration of or to offset or net termination val-
ues, payment amounts, or other transfer obligations aris-
ing under or in connection with one or more (or the termi-
nation, liquidation, or acceleration of one or more)—
‘‘(1) securities contracts, as defined in section 
741(7); 
‘‘(2) commodity contracts, as defined in section 
761(4); 
‘‘(3) forward contracts; 
‘‘(4) repurchase agreements; 
‘‘(5) swap agreements; or 
‘‘(6) master netting agreements, 
shall not be stayed, avoided, or otherwise limited by oper-
ation of any provision of this title or by any order of a
408
court or administrative agency in any proceeding under 
this title. 
‘‘(b)(1) A party may exercise a contractual right de-
scribed in subsection (a) to terminate, liquidate, or accel-
erate only to the extent that such party could exercise such 
a right under section 555, 556, 559, or 560 for each indi-
vidual contract covered by the master netting agreement 
in issue. 
‘‘(2) If a debtor is a commodity broker subject to sub-
chapter IV of chapter 7—
‘‘(A) a party may not net or offset an obligation 
to the debtor arising under, or in connection with, 
a commodity contract traded on or subject to the 
rules of a contract market designated under the 
Commodity Exchange Act or a derivatives trans-
action execution facility registered under the Com-
modity Exchange Act against any claim arising 
under, or in connection with, other instruments, con-
tracts, or agreements listed in subsection (a) except 
to the extent that the party has positive net equity 
in the commodity accounts at the debtor, as cal-
culated under such subchapter; and 
‘‘(B) another commodity broker may not net or 
offset an obligation to the debtor arising under, or 
in connection with, a commodity contract entered
409
into or held on behalf of a customer of the debtor 
and traded on or subject to the rules of a contract 
market designated under the Commodity Exchange 
Act or a derivatives transaction execution facility 
registered under the Commodity Exchange Act 
against any claim arising under, or in connection 
with, other instruments, contracts, or agreements 
listed in subsection (a). 
‘‘(3) No provision of subparagraph (A) or (B) of 
paragraph (2) shall prohibit the offset of claims and obli-
gations that arise under—
‘‘(A) a cross-margining agreement or similar 
arrangement that has been approved by the Com-
modity Futures Trading Commission or submitted 
to the Commodity Futures Trading Commission 
under paragraph (1) or (2) of section 5c(c) of the 
Commodity Exchange Act and has not been abro-
gated or rendered ineffective by the Commodity Fu-
tures Trading Commission; or 
‘‘(B) any other netting agreement between a 
clearing organization (as defined in section 761) and 
another entity that has been approved by the Com-
modity Futures Trading Commission. 
‘‘(c) As used in this section, the term ‘contractual 
right’ includes a right set forth in a rule or bylaw of a
410
derivatives clearing organization (as defined in the Com-
modity Exchange Act), a multilateral clearing organiza-
tion (as defined in the Federal Deposit Insurance Cor-
poration Improvement Act of 1991), a national securities 
exchange, a national securities association, a securities 
clearing agency, a contract market designated under the 
Commodity Exchange Act, a derivatives transaction execu-
tion facility registered under the Commodity Exchange 
Act, or a board of trade (as defined in the Commodity 
Exchange Act) or in a resolution of the governing board 
thereof, and a right, whether or not evidenced in writing, 
arising under common law, under law merchant, or by rea-
son of normal business practice. 
‘‘(d) Any provisions of this title relating to securities 
contracts, commodity contracts, forward contracts, repur-
chase agreements, swap agreements, or master netting 
agreements shall apply in a case under chapter 15, so that 
enforcement of contractual provisions of such contracts 
and agreements in accordance with their terms will not 
be stayed or otherwise limited by operation of any provi-
sion of this title or by order of a court in any case under 
this title, and to limit avoidance powers to the same extent 
as in a proceeding under chapter 7 or 11 of this title (such 
enforcement not to be limited based on the presence or 
absence of assets of the debtor in the United States).’’.
411
(2) CONFORMING AMENDMENT.—The table of 
sections for chapter 5 of title 11, United States 
Code, is amended by inserting after the item relating 
to section 560 the following:
‘‘561. Contractual right to terminate, liquidate, accelerate, or offset under a 
master netting agreement and across contracts; proceedings 
under chapter 15.’’.
(l) COMMODITY BROKER LIQUIDATIONS.—Title 11, 
United States Code, is amended by inserting after section 
766 the following: 
‘‘§ 767. Commodity broker liquidation and forward 
contract merchants, commodity brokers, 
stockbrokers, financial institutions, fi-
nancial participants, securities clearing 
agencies, swap participants, repo partici-
pants, and master netting agreement par-
ticipants 
‘‘Notwithstanding any other provision of this title, 
the exercise of rights by a forward contract merchant, 
commodity broker, stockbroker, financial institution, fi-
nancial participant, securities clearing agency, swap par-
ticipant, repo participant, or master netting agreement 
participant under this title shall not affect the priority of 
any unsecured claim it may have after the exercise of such 
rights.’’.
412
(m) 
STOCKBROKER
LIQUIDATIONS.—Title 
11, 
United States Code, is amended by inserting after section 
752 the following: 
‘‘§ 753. Stockbroker liquidation and forward contract 
merchants, commodity brokers, stock-
brokers, financial institutions, financial 
participants, securities clearing agencies, 
swap participants, repo participants, and 
master netting agreement participants 
‘‘Notwithstanding any other provision of this title, 
the exercise of rights by a forward contract merchant, 
commodity broker, stockbroker, financial institution, fi-
nancial participant, securities clearing agency, swap par-
ticipant, repo participant, or master netting agreement 
participant under this title shall not affect the priority of 
any unsecured claim it may have after the exercise of such 
rights.’’. 
(n) SETOFF.—Section 553 of title 11, United States 
Code, is amended—
(1) in subsection (a)(2)(B)(ii), by inserting be-
fore the semicolon the following: ‘‘(except for a 
setoff of a kind described in section 362(b)(6), 
362(b)(7), 362(b)(17), 362(b)(27), 555, 556, 559, 
560, or 561)’’;
413
(2) in subsection (a)(3)(C), by inserting before 
the period the following: ‘‘(except for a setoff of a 
kind described in section 362(b)(6), 362(b)(7), 
362(b)(17), 362(b)(27), 555, 556, 559, 560, or 
561)’’; and 
(3) 
in 
subsection 
(b)(1), 
by 
striking 
‘‘362(b)(14),’’ 
and 
inserting 
‘‘362(b)(17), 
362(b)(27), 555, 556, 559, 560, 561,’’. 
(o) SECURITIES
CONTRACTS, COMMODITY
CON-
TRACTS, AND FORWARD CONTRACTS.—Title 11, United 
States Code, is amended—
(1) in section 362(b)(6), by striking ‘‘financial 
institutions,’’ each place such term appears and in-
serting ‘‘financial institution, financial participant,’’; 
(2) in sections 362(b)(7) and 546(f), by insert-
ing ‘‘or financial participant’’ after ‘‘repo partici-
pant’’ each place such term appears; 
(3) in section 546(e), by inserting ‘‘financial 
participant,’’ after ‘‘financial institution,’’; 
(4) in section 548(d)(2)(B), by inserting ‘‘fi-
nancial participant,’’ after ‘‘financial institution,’’; 
(5) in section 548(d)(2)(C), by inserting ‘‘or fi-
nancial participant’’ after ‘‘repo participant’’; 
(6) in section 548(d)(2)(D), by inserting ‘‘or fi-
nancial participant’’ after ‘‘swap participant’’;
414
(7) in section 555—
(A) by inserting ‘‘financial participant,’’ 
after ‘‘financial institution,’’; and 
(B) by striking the second sentence and in-
serting the following: ‘‘As used in this section, 
the term ‘contractual right’ includes a right set 
forth in a rule or bylaw of a derivatives clearing 
organization (as defined in the Commodity Ex-
change Act), a multilateral clearing organiza-
tion (as defined in the Federal Deposit Insur-
ance Corporation Improvement Act of 1991), a 
national securities exchange, a national securi-
ties association, a securities clearing agency, a 
contract market designated under the Com-
modity Exchange Act, a derivatives transaction 
execution facility registered under the Com-
modity Exchange Act, or a board of trade (as 
defined in the Commodity Exchange Act), or in 
a resolution of the governing board thereof, and 
a right, whether or not in writing, arising under 
common law, under law merchant, or by reason 
of normal business practice.’’; 
(8) in section 556, by inserting ‘‘, financial par-
ticipant,’’ after ‘‘commodity broker’’;
415
(9) in section 559, by inserting ‘‘or financial 
participant’’ after ‘‘repo participant’’ each place 
such term appears; and 
(10) in section 560, by inserting ‘‘or financial 
participant’’ after ‘‘swap participant’’. 
(p) CONFORMING AMENDMENTS.—Title 11, United 
States Code, is amended—
(1) in the table of sections for chapter 5—
(A) by amending the items relating to sec-
tions 555 and 556 to read as follows:
‘‘555. Contractual right to liquidate, terminate, or accelerate a securities con-
tract. 
‘‘556. Contractual right to liquidate, terminate, or accelerate a commodities con-
tract or forward contract.’’;
and 
(B) by amending the items relating to sec-
tions 559 and 560 to read as follows:
‘‘559. Contractual right to liquidate, terminate, or accelerate a repurchase 
agreement. 
‘‘560. Contractual right to liquidate, terminate, or accelerate a swap agree-
ment.’’;
and 
(2) in the table of sections for chapter 7—
(A) by inserting after the item relating to 
section 766 the following:
‘‘767. Commodity broker liquidation and forward contract merchants, com-
modity brokers, stockbrokers, financial institutions, financial 
participants, securities clearing agencies, swap participants, 
repo participants, and master netting agreement participants.’’;
and
416
(B) by inserting after the item relating to 
section 752 the following:
‘‘753. Stockbroker liquidation and forward contract merchants, commodity bro-
kers, stockbrokers, financial institutions, financial participants, 
securities clearing agencies, swap participants, repo partici-
pants, and master netting agreement participants.’’.
SEC. 908. RECORDKEEPING REQUIREMENTS. 
(a) FDIC-INSURED DEPOSITORY INSTITUTIONS.—
Section 11(e)(8) of the Federal Deposit Insurance Act (12 
U.S.C. 1821(e)(8)) is amended by adding at the end the 
following new subparagraph: 
‘‘(H) RECORDKEEPING REQUIREMENTS.—
The Corporation, in consultation with the ap-
propriate Federal banking agencies, may pre-
scribe regulations requiring more detailed rec-
ordkeeping by any insured depository institu-
tion with respect to qualified financial contracts 
(including market valuations) only if such in-
sured depository institution is in a troubled 
condition (as such term is defined by the Cor-
poration pursuant to section 32).’’. 
(b) INSURED CREDIT UNIONS.—Section 207(c)(8) of 
the Federal Credit Union Act (12 U.S.C. 1787(c)(8)) is 
amended by adding at the end the following new subpara-
graph: 
‘‘(H) RECORDKEEPING REQUIREMENTS.—
The Board, in consultation with the appropriate
417
Federal banking agencies, may prescribe regula-
tions requiring more detailed recordkeeping by 
any insured credit union with respect to quali-
fied financial contracts (including market valu-
ations) only if such insured credit union is in 
a troubled condition (as such term is defined by 
the Board pursuant to section 212).’’. 
SEC. 909. EXEMPTIONS FROM CONTEMPORANEOUS EXECU-
TION REQUIREMENT. 
Section 13(e)(2) of the Federal Deposit Insurance 
Act (12 U.S.C. 1823(e)(2)) is amended to read as follows: 
‘‘(2) EXEMPTIONS
FROM
CONTEMPORANEOUS 
EXECUTION REQUIREMENT.—An agreement to pro-
vide for the lawful collateralization of—
‘‘(A) deposits of, or other credit extension 
by, a Federal, State, or local governmental enti-
ty, or of any depositor referred to in section 
11(a)(2), including an agreement to provide col-
lateral in lieu of a surety bond; 
‘‘(B) bankruptcy estate funds pursuant to 
section 345(b)(2) of title 11, United States 
Code; 
‘‘(C) extensions of credit, including any 
overdraft, from a Federal reserve bank or Fed-
eral home loan bank; or
418
‘‘(D) one or more qualified financial con-
tracts, as defined in section 11(e)(8)(D), 
shall not be deemed invalid pursuant to paragraph 
(1)(B) solely because such agreement was not exe-
cuted contemporaneously with the acquisition of the 
collateral or because of pledges, delivery, or substi-
tution of the collateral made in accordance with such 
agreement.’’. 
SEC. 910. DAMAGE MEASURE. 
(a) IN GENERAL.—Title 11, United States Code, is 
amended—
(1) by inserting after section 561, as added by 
section 907, the following: 
‘‘§ 562. Timing of damage measurement in connection 
with swap agreements, securities con-
tracts, forward contracts, commodity con-
tracts, repurchase agreements, and mas-
ter netting agreements 
‘‘(a) If the trustee rejects a swap agreement, securi-
ties contract (as defined in section 741), forward contract, 
commodity contract (as defined in section 761), repur-
chase agreement, or master netting agreement pursuant 
to section 365(a), or if a forward contract merchant, 
stockbroker, financial institution, securities clearing agen-
cy, repo participant, financial participant, master netting
419
agreement participant, or swap participant liquidates, ter-
minates, or accelerates such contract or agreement, dam-
ages shall be measured as of the earlier of—
‘‘(1) the date of such rejection; or 
‘‘(2) the date or dates of such liquidation, ter-
mination, or acceleration. 
‘‘(b) If there are not any commercially reasonable de-
terminants of value as of any date referred to in para-
graph (1) or (2) of subsection (a), damages shall be meas-
ured as of the earliest subsequent date or dates on which 
there are commercially reasonable determinants of value. 
‘‘(c) For the purposes of subsection (b), if damages 
are not measured as of the date or dates of rejection, liq-
uidation, termination, or acceleration, and the forward 
contract merchant, stockbroker, financial institution, secu-
rities clearing agency, repo participant, financial partici-
pant, master netting agreement participant, or swap par-
ticipant or the trustee objects to the timing of the meas-
urement of damages—
‘‘(1) the trustee, in the case of an objection by 
a forward contract merchant, stockbroker, financial 
institution, securities clearing agency, repo partici-
pant, financial participant, master netting agree-
ment participant, or swap participant; or
420
‘‘(2) the forward contract merchant, stock-
broker, financial institution, securities clearing agen-
cy, repo participant, financial participant, master 
netting agreement participant, or swap participant, 
in the case of an objection by the trustee, 
has the burden of proving that there were no commercially 
reasonable determinants of value as of such date or 
dates.’’; and 
(2) in the table of sections for chapter 5, by in-
serting after the item relating to section 561 (as 
added by section 907) the following new item:
‘‘562. Timing of damage measure in connection with swap agreements, securities 
contracts, forward contracts, commodity contracts, repurchase 
agreements, or master netting agreements.’’.
(b) CLAIMS ARISING FROM REJECTION.—Section 
502(g) of title 11, United States Code, is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(g)’’; and 
(2) by adding at the end the following: 
‘‘(2) A claim for damages calculated in accordance 
with section 562 shall be allowed under subsection (a), (b), 
or (c), or disallowed under subsection (d) or (e), as if such 
claim had arisen before the date of the filing of the peti-
tion.’’. 
SEC. 911. SIPC STAY. 
Section 5(b)(2) of the Securities Investor Protection 
Act of 1970 (15 U.S.C. 78eee(b)(2)) is amended by adding 
at the end the following new subparagraph:
421
‘‘(C) EXCEPTION FROM STAY.—
‘‘(i) Notwithstanding section 362 of 
title 11, United States Code, neither the 
filing of an application under subsection 
(a)(3) nor any order or decree obtained by 
SIPC from the court shall operate as a 
stay of any contractual rights of a creditor 
to liquidate, terminate, or accelerate a se-
curities contract, commodity contract, for-
ward contract, repurchase agreement, swap 
agreement, or master netting agreement, 
as those terms are defined in sections 101, 
741, and 761 of title 11, United States 
Code, to offset or net termination values, 
payment amounts, or other transfer obliga-
tions arising under or in connection with 
one or more of such contracts or agree-
ments, or to foreclose on any cash collat-
eral pledged by the debtor, whether or not 
with respect to one or more of such con-
tracts or agreements. 
‘‘(ii) Notwithstanding clause (i), such 
application, order, or decree may operate 
as a stay of the foreclosure on, or disposi-
tion of, securities collateral pledged by the
422
debtor, whether or not with respect to one 
or more of such contracts or agreements, 
securities sold by the debtor under a repur-
chase agreement, or securities lent under a 
securities lending agreement. 
‘‘(iii) As used in this subparagraph, 
the term ‘contractual right’ includes a 
right set forth in a rule or bylaw of a na-
tional securities exchange, a national secu-
rities association, or a securities clearing 
agency, a right set forth in a bylaw of a 
clearing organization or contract market or 
in a resolution of the governing board 
thereof, and a right, whether or not in 
writing, arising under common law, under 
law merchant, or by reason of normal busi-
ness practice.’’. 
TITLE X—PROTECTION OF FAM-
ILY FARMERS AND FAMILY 
FISHERMEN 
SEC. 1001. PERMANENT REENACTMENT OF CHAPTER 12. 
(a) REENACTMENT.—
(1) IN
GENERAL.—Chapter 12 of title 11, 
United States Code, as reenacted by section 149 of 
division C of the Omnibus Consolidated and Emer-
423
gency Supplemental Appropriations Act, 1999 (Pub-
lic Law 105–277), and as in effect on June 30, 
2005, is hereby reenacted. 
(2) EFFECTIVE
DATE
OF
REENACTMENT.—
Paragraph (1) shall take effect on July 1, 2005. 
(b) AMENDMENTS—Chapter 12 of title 11, United 
States Code, as reenacted by subsection (a), is amended 
by this Act. 
(c) CONFORMING AMENDMENT.—Section 302 of the 
Bankruptcy Judges, United States Trustees, and Family 
Farmer Bankruptcy Act of 1986 (28 U.S.C. 581 note) is 
amended by striking subsection (f). 
SEC. 1002. DEBT LIMIT INCREASE. 
Section 104(b) of title 11, United States Code, as 
amended by section 226, is amended by inserting 
‘‘101(18),’’ after ‘‘101(3),’’ each place it appears. 
SEC. 1003. CERTAIN CLAIMS OWED TO GOVERNMENTAL 
UNITS. 
(a) CONTENTS OF PLAN.—Section 1222(a)(2) of title 
11, United States Code, as amended by section 213, is 
amended to read as follows: 
‘‘(2) provide for the full payment, in deferred 
cash payments, of all claims entitled to priority 
under section 507, unless—
424
‘‘(A) the claim is a claim owed to a govern-
mental unit that arises as a result of the sale, 
transfer, exchange, or other disposition of any 
farm asset used in the debtor’s farming oper-
ation, in which case the claim shall be treated 
as an unsecured claim that is not entitled to 
priority under section 507, but the debt shall be 
treated in such manner only if the debtor re-
ceives a discharge; or 
‘‘(B) the holder of a particular claim 
agrees to a different treatment of that claim;’’. 
(b) SPECIAL NOTICE PROVISIONS.—Section 1231(b) 
of title 11, United States Code, as so designated by section 
719, is amended by striking ‘‘a State or local govern-
mental unit’’ and inserting ‘‘any governmental unit’’. 
(c) EFFECTIVE DATE; APPLICATION
OF AMEND-
MENTS.—This section and the amendments made by this 
section shall take effect on the date of the enactment of 
this Act and shall not apply with respect to cases com-
menced under title 11 of the United States Code before 
such date. 
SEC. 1004. DEFINITION OF FAMILY FARMER. 
Section 101(18) of title 11, United States Code, is 
amended—
(1) in subparagraph (A)—
425
(A) by striking ‘‘$1,500,000’’ and inserting 
‘‘$3,237,000’’; and 
(B) by striking ‘‘80’’ and inserting ‘‘50’’; 
and 
(2) in subparagraph (B)(ii)—
(A) by striking ‘‘$1,500,000’’ and inserting 
‘‘$3,237,000’’; and 
(B) by striking ‘‘80’’ and inserting ‘‘50’’. 
SEC. 1005. ELIMINATION OF REQUIREMENT THAT FAMILY 
FARMER AND SPOUSE RECEIVE OVER 50 PER-
CENT OF INCOME FROM FARMING OPER-
ATION IN YEAR PRIOR TO BANKRUPTCY. 
Section 101(18)(A) of title 11, United States Code, 
is amended by striking ‘‘for the taxable year preceding the 
taxable year’’ and inserting the following: 
‘‘for—
‘‘(i) the taxable year preceding; or 
‘‘(ii) each of the 2d and 3d taxable 
years preceding; 
the taxable year’’. 
SEC. 1006. PROHIBITION OF RETROACTIVE ASSESSMENT OF 
DISPOSABLE INCOME. 
(a) CONFIRMATION OF PLAN.—Section 1225(b)(1) of 
title 11, United States Code, is amended—
426
(1) in subparagraph (A) by striking ‘‘or’’ at the 
end; 
(2) in subparagraph (B) by striking the period 
at the end and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
‘‘(C) the value of the property to be distributed 
under the plan in the 3-year period, or such longer 
period as the court may approve under section 
1222(c), beginning on the date that the first dis-
tribution is due under the plan is not less than the 
debtor’s projected disposable income for such pe-
riod.’’. 
(b) MODIFICATION OF PLAN.—Section 1229 of title 
11, United States Code, is amended by adding at the end 
the following: 
‘‘(d) A plan may not be modified under this section—
‘‘(1) to increase the amount of any payment 
due before the plan as modified becomes the plan; 
‘‘(2) by anyone except the debtor, based on an 
increase in the debtor’s disposable income, to in-
crease the amount of payments to unsecured credi-
tors required for a particular month so that the ag-
gregate of such payments exceeds the debtor’s dis-
posable income for such month; or
427
‘‘(3) in the last year of the plan by anyone ex-
cept the debtor, to require payments that would 
leave the debtor with insufficient funds to carry on 
the farming operation after the plan is completed.’’. 
SEC. 1007. FAMILY FISHERMEN. 
(a) DEFINITIONS.—Section 101 of title 11, United 
States Code, is amended—
(1) by inserting after paragraph (7) the fol-
lowing: 
‘‘(7A) ‘commercial fishing operation’ means—
‘‘(A) the catching or harvesting of fish, 
shrimp, lobsters, urchins, seaweed, shellfish, or 
other aquatic species or products of such spe-
cies; or 
‘‘(B) for purposes of section 109 and chap-
ter 12, aquaculture activities consisting of rais-
ing for market any species or product described 
in subparagraph (A); 
‘‘(7B) ‘commercial fishing vessel’ means a ves-
sel used by a family fisherman to carry out a com-
mercial fishing operation;’’; and 
(2) by inserting after paragraph (19) the fol-
lowing: 
‘‘(19A) ‘family fisherman’ means—
428
‘‘(A) an individual or individual and spouse 
engaged in a commercial fishing operation—
‘‘(i) whose aggregate debts do not ex-
ceed $1,500,000 and not less than 80 per-
cent of whose aggregate noncontingent, liq-
uidated debts (excluding a debt for the 
principal residence of such individual or 
such individual and spouse, unless such 
debt arises out of a commercial fishing op-
eration), on the date the case is filed, arise 
out of a commercial fishing operation 
owned or operated by such individual or 
such individual and spouse; and 
‘‘(ii) who receive from such commer-
cial fishing operation more than 50 percent 
of such individual’s or such individual’s 
and spouse’s gross income for the taxable 
year preceding the taxable year in which 
the case concerning such individual or such 
individual and spouse was filed; or 
‘‘(B) a corporation or partnership—
‘‘(i) in which more than 50 percent of 
the outstanding stock or equity is held 
by—
429
‘‘(I) 1 family that conducts the 
commercial fishing operation; or 
‘‘(II) 1 family and the relatives 
of the members of such family, and 
such family or such relatives conduct 
the commercial fishing operation; and 
‘‘(ii)(I) more than 80 percent of the 
value of its assets consists of assets related 
to the commercial fishing operation; 
‘‘(II) its aggregate debts do not ex-
ceed $1,500,000 and not less than 80 per-
cent of its aggregate noncontingent, liq-
uidated debts (excluding a debt for 1 
dwelling which is owned by such corpora-
tion or partnership and which a share-
holder or partner maintains as a principal 
residence, unless such debt arises out of a 
commercial fishing operation), on the date 
the case is filed, arise out of a commercial 
fishing operation owned or operated by 
such corporation or such partnership; and 
‘‘(III) if such corporation issues stock, 
such stock is not publicly traded; 
‘‘(19B) ‘family fisherman with regular annual 
income’ means a family fisherman whose annual in-
430
come is sufficiently stable and regular to enable such 
family fisherman to make payments under a plan 
under chapter 12 of this title;’’. 
(b) WHO MAY BE A DEBTOR.—Section 109(f) of title 
11, United States Code, is amended by inserting ‘‘or fam-
ily fisherman’’ after ‘‘family farmer’’. 
(c) CHAPTER 12.—Chapter 12 of title 11, United 
States Code, is amended—
(1) in the chapter heading, by inserting ‘‘OR 
FISHERMAN’’ after ‘‘FAMILY FARMER’’; 
(2) in section 1203, by inserting ‘‘or commer-
cial fishing operation’’ after ‘‘farm’’; and 
(3) in section 1206, by striking ‘‘if the property 
is farmland or farm equipment’’ and inserting ‘‘if 
the property is farmland, farm equipment, or prop-
erty used to carry out a commercial fishing oper-
ation (including a commercial fishing vessel)’’. 
(d) CLERICAL AMENDMENT.—In the table of chap-
ters for title 11, United States Code, the item relating to 
chapter 12, is amended to read as follows:
‘‘12. Adjustments of Debts of a Family Farmer or Family 
Fisherman with Regular Annual Income ..... 1201’’.
(e) APPLICABILITY.—Nothing in this section shall 
change, affect, or amend the Fishery Conservation and 
Management Act of 1976 (16 U.S.C. 1801 et seq.).
431
TITLE XI—HEALTH CARE AND 
EMPLOYEE BENEFITS 
SEC. 1101. DEFINITIONS. 
(a) HEALTH CARE BUSINESS DEFINED.—Section 
101 of title 11, United States Code, as amended by section 
306, is amended—
(1) by redesignating paragraph (27A) as para-
graph (27B); and 
(2) by inserting after paragraph (27) the fol-
lowing: 
‘‘(27A) ‘health care business’—
‘‘(A) means any public or private entity 
(without regard to whether that entity is orga-
nized for profit or not for profit) that is pri-
marily engaged in offering to the general public 
facilities and services for—
‘‘(i) the diagnosis or treatment of in-
jury, deformity, or disease; and 
‘‘(ii) surgical, drug treatment, psy-
chiatric, or obstetric care; and 
‘‘(B) includes—
‘‘(i) any—
‘‘(I) general or specialized hos-
pital;