419 
ner, the right or power of the Corporation to 
transfer any qualified financial contract in ac-
cordance with paragraphs (9) and (10) of this 
subsection or to disaffirm or repudiate any such 
contract in accordance with subsection (c)(1) of 
this section. 
(F) WALKAWAY
CLAUSES
NOT
EFFEC-
TIVE.— 
(i) IN
GENERAL.—Notwithstanding 
the provisions of subparagraph (A) and 
sections 403 and 404 of the Federal De-
posit Insurance Corporation Improvement 
Act of 1991, no walkaway clause shall be 
enforceable in a qualified financial contract 
of a covered financial company in default. 
(ii) LIMITED SUSPENSION OF CERTAIN 
OBLIGATIONS.—In the case of a qualified 
financial contract referred to in clause (i), 
any payment or delivery obligations other-
wise due from a party pursuant to the 
qualified financial contract shall be sus-
pended from the time the receiver is ap-
pointed until the earlier of— 
(I) the time such party receives 
notice that such contract has been
420 
transferred pursuant to paragraph 
(10)(A); or 
(II) 5:00 p.m. (eastern time) on 
the business day following the date of 
the appointment of the receiver. 
(iii) WALKAWAY CLAUSE DEFINED.— 
For purposes of this subparagraph, the 
term ‘‘walkaway clause’’ means any provi-
sion in a qualified financial contract that 
suspends, conditions, or extinguishes a 
payment obligation of a party, in whole or 
in part, or does not create a payment obli-
gation of a party that would otherwise 
exist, solely because of such party’s status 
as a nondefaulting party in connection 
with the insolvency of a covered financial 
company that is a party to the contract or 
the appointment of or the exercise of rights 
or powers by a receiver of such covered fi-
nancial company, and not as a result of a 
party’s exercise of any right to offset, 
setoff, or net obligations that exist under 
the contract, any other contract between 
those parties, or applicable law.
421 
(G) RECORDKEEPING.—The Corporation, 
in consultation with the Federal Reserve Board, 
may prescribe regulations requiring that the 
covered 
financial 
company 
maintain 
such 
records with respect to qualified financial con-
tracts (including market valuations) as the Cor-
poration determines to be necessary or appro-
priate in order to assist the receiver of the cov-
ered financial company in being able to exercise 
its rights and fulfill its obligations under this 
paragraph or paragraph (9) or (10). 
(9) TRANSFER OF QUALIFIED FINANCIAL CON-
TRACTS.— 
(A) IN GENERAL.—In making any transfer 
of assets or liabilities of a covered financial 
company in default which includes any qualified 
financial contract, the receiver for such covered 
financial company shall either— 
(i) transfer to one financial institu-
tion, other than a financial institution for 
which a conservator, receiver, trustee in 
bankruptcy, or other legal custodian has 
been appointed or which is otherwise the 
subject of a bankruptcy or insolvency pro-
ceeding—
422 
(I) all qualified financial con-
tracts between any person or any af-
filiate of such person and the covered 
financial company in default; 
(II) all claims of such person or 
any affiliate of such person against 
such covered financial company under 
any such contract (other than any 
claim which, under the terms of any 
such contract, is subordinated to the 
claims of general unsecured creditors 
of such company); 
(III) all claims of such covered fi-
nancial company against such person 
or any affiliate of such person under 
any such contract; and 
(IV) all property securing or any 
other credit enhancement for any con-
tract described in subclause (I) or any 
claim described in subclause (II) or 
(III) under any such contract; or 
(ii) transfer none of the qualified fi-
nancial contracts, claims, property or other 
credit enhancement referred to in clause (i)
423 
(with respect to such person and any affil-
iate of such person). 
(B) TRANSFER TO FOREIGN BANK, FINAN-
CIAL
INSTITUTION, OR
BRANCH
OR
AGENCY 
THEREOF.—In transferring any qualified finan-
cial contracts and related claims and property 
under subparagraph (A)(i), the receiver for the 
covered financial company shall not make such 
transfer to a foreign bank, financial institution 
organized under the laws of a foreign country, 
or a branch or agency of a foreign bank or fi-
nancial institution unless, under the law appli-
cable to such bank, financial institution, branch 
or agency, to the qualified financial contracts, 
and to any netting contract, any security agree-
ment or arrangement or other credit enhance-
ment related to one or more qualified financial 
contracts, the contractual rights of the parties 
to such qualified financial contracts, netting 
contracts, security agreements or arrangements, 
or other credit enhancements are enforceable 
substantially to the same extent as permitted 
under this section. 
(C) TRANSFER
OF
CONTRACTS
SUBJECT 
TO
THE
RULES
OF
A
CLEARING
ORGANIZA-
424 
TION.—In the event that a receiver transfers 
any qualified financial contract and related 
claims, property, and credit enhancements pur-
suant to subparagraph (A)(i) and such contract 
is cleared by or subject to the rules of a clear-
ing organization, the clearing organization shall 
not be required to accept the transferee as a 
member by virtue of the transfer. 
(D) DEFINITIONS.—For purposes of this 
paragraph, the term ‘‘financial institution’’ 
means a broker or dealer, a depository institu-
tion, a futures commission merchant, a bridge 
financial company, or any other institution de-
termined by the Corporation by regulation to be 
a financial institution, and the term ‘‘clearing 
organization’’ has the same meaning as in sec-
tion 402 of the Federal Deposit Insurance Cor-
poration Improvement Act of 1991. 
(10) NOTIFICATION OF TRANSFER.— 
(A) IN GENERAL.—If— 
(i) the receiver for a covered financial 
company in default or in danger of default 
transfers any assets and liabilities of the 
covered financial company; and