such depository institution 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
institution);
‘‘(III) all claims of such deposi-
tory institution 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
contract 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)
(with respect to such person and any affil-
iate of such person).
‘‘(B) TRANSFER TO FOREIGN BANK, FOR-
EIGN FINANCIAL INSTITUTION, OR BRANCH OR
AGENCY OF A FOREIGN BANK OR FINANCIAL IN-
STITUTION.—In transferring any qualified fi-
nancial contracts and related claims and prop-
erty under subparagraph (A)(i), the conservator
or receiver for the depository institution shall
not make such transfer to a foreign bank, fi-
nancial institution organized under the laws of
a foreign country, or a branch or agency of a
foreign bank or financial institution unless,
under the law applicable to such bank, financial
institution, branch or agency, to the qualified
financial contracts, and to any netting contract,
any security agreement or arrangement or other
credit enhancement related to one or more
qualified financial contracts, the contractual
rights of the parties to such qualified financial
contracts, netting contracts, security agree-
ments or arrangements, or other credit en-
hancements are enforceable substantially to the
same extent as permitted under this section.
‘‘(C) TRANSFER OF CONTRACTS SUBJECT
TO
THE
RULES
OF
A
CLEARING
ORGANIZA-
TION.—In the event that a conservator or re-
ceiver transfers any qualified financial contract
and related claims, property, and credit en-
hancements pursuant to subparagraph (A)(i)
and such contract is cleared by or subject to the
rules of a clearing organization, the clearing or-
ganization shall not be required to accept the
transferee as a member by virtue of the trans-
fer.
‘‘(D) DEFINITIONS.—For purposes of this
paragraph, the term ‘financial institution’
means a broker or dealer, a depository institu-
tion, a futures commission merchant, or any
other institution, as determined by the Corpora-
tion by regulation to be a financial institution,
and the term ‘clearing organization’ has the
same meaning as in section 402 of the Federal
Deposit Insurance Corporation Improvement
Act of 1991.’’.
(b) NOTICE TO QUALIFIED FINANCIAL CONTRACT
COUNTERPARTIES.—Section 11(e)(10)(A) of the Federal
Deposit Insurance Act (12 U.S.C. 1821(e)(10)(A)) is
amended in the material immediately following clause (ii)
by striking ‘‘the conservator’’ and all that follows through
the period and inserting the following: ‘‘the conservator
or receiver shall notify any person who is a party to any
such contract of such transfer by 5:00 p.m. (eastern time)
on the business day following the date of the appointment
of the receiver in the case of a receivership, or the business
day following such transfer in the case of a conservator-
ship.’’.
(c) RIGHTS AGAINST RECEIVER AND TREATMENT OF
BRIDGE BANKS.—Section 11(e)(10) of the Federal De-
posit 
Insurance 
Act 
(12 
U.S.C. 
1821(e)(10)) 
is
amended—
(1) by redesignating subparagraph (B) as sub-
paragraph (D); and
(2) by inserting after subparagraph (A) the fol-
lowing new subparagraphs:
‘‘(B) CERTAIN
RIGHTS
NOT
ENFORCE-
ABLE.—
‘‘(i) RECEIVERSHIP.—A person who is
a party to a qualified financial contract
with an insured depository institution may
not exercise any right that such person has
to terminate, liquidate, or net such con-
tract under paragraph (8)(A) of this sub-
section or section 403 or 404 of the Fed-
eral Deposit Insurance Corporation Im-
provement Act of 1991, solely by reason of
or incidental to the appointment of a re-
ceiver for the depository institution (or the
insolvency or financial condition of the de-
pository institution for which the receiver
has been appointed)—
‘‘(I) until 5:00 p.m. (eastern
time) on the business day following
the date of the appointment of the re-
ceiver; or
‘‘(II) after the person has re-
ceived notice that the contract has
been transferred pursuant to para-
graph (9)(A).
‘‘(ii) CONSERVATORSHIP.—A person
who is a party to a qualified financial con-
tract with an insured depository institution
may not exercise any right that such per-
son has to terminate, liquidate, or net such
contract under paragraph (8)(E) of this
subsection or section 403 or 404 of the
Federal Deposit Insurance Corporation
Improvement Act of 1991, solely by reason
of or incidental to the appointment of a
conservator for the depository institution
(or the insolvency or financial condition of
the depository institution for which the
conservator has been appointed).
‘‘(iii) NOTICE.—For purposes of this
paragraph, the Corporation as receiver or
conservator of an insured depository insti-
tution shall be deemed to have notified a
person who is a party to a qualified finan-
cial contract with such depository institu-
tion if the Corporation has taken steps
reasonably calculated to provide notice to
such person by the time specified in sub-
paragraph (A).
‘‘(C) TREATMENT
OF
BRIDGE
BANKS.—
The following institutions shall not be consid-
ered to be 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 proceeding for purposes of para-
graph (9):
‘‘(i) A bridge bank.
‘‘(ii) A depository institution orga-
nized by the Corporation, for which a con-
servator is appointed either—
‘‘(I) immediately upon the orga-
nization of the institution; or
‘‘(II) at the time of a purchase
and assumption transaction between
the depository institution and the Cor-
poration as receiver for a depository
institution in default.’’.
SEC. 5. AMENDMENTS RELATING TO DISAFFIRMANCE OR
REPUDIATION 
OF 
QUALIFIED 
FINANCIAL
CONTRACTS.
Section 11(e) of the Federal Deposit Insurance Act
(12 U.S.C. 1821(e)) is amended—
(1) by redesignating paragraphs (11) through
(15) as paragraphs (12) through (16), respectively;
(2) by inserting after paragraph (10) the fol-
lowing new paragraph:
‘‘(11) DISAFFIRMANCE
OR
REPUDIATION
OF
QUALIFIED
FINANCIAL
CONTRACTS.—In exercising
the rights of disaffirmance or repudiation of a con-
servator or receiver with respect to any qualified fi-
nancial contract to which an insured depository in-
stitution is a party, the conservator or receiver for
such institution shall either—
‘‘(A) disaffirm or repudiate all qualified fi-
nancial contracts between—
‘‘(i) any person or any affiliate of
such person; and
‘‘(ii) the depository institution in de-
fault; or
‘‘(B) disaffirm or repudiate none of the
qualified financial contracts referred to in sub-
paragraph (A) (with respect to such person or
any affiliate of such person).’’; and
(3) by adding at the end the following new
paragraph:
‘‘(17) SAVINGS
CLAUSE.—The meanings of
terms used in this subsection are applicable for pur-
poses of this subsection only, and shall not be con-
strued or applied so as to challenge or affect the
characterization, definition, or treatment of any
similar terms under any other statute, regulation, or
rule, including the Gramm-Leach-Bliley Act, the
Legal Certainty for Bank Products Act of 2000, the
securities laws (as that term is defined in section
3(a)(47) of the Securities Exchange Act of 1934),
and the Commodity Exchange Act.’’.
SEC. 6. CLARIFYING AMENDMENT RELATING TO MASTER
AGREEMENTS.
Section 11(e)(8)(D)(vii) of the Federal Deposit In-
surance Act (12 U.S.C. 1821(e)(8)(D)(vii)) is amended to
read as follows:
‘‘(vii) 
TREATMENT
OF
MASTER
AGREEMENT
AS
ONE
AGREEMENT.—Any
master agreement for any contract or
agreement described in any preceding
clause of this subparagraph (or any master
agreement for such master agreement or
agreements), together with all supplements
to such master agreement, shall be treated
as a single agreement and a single quali-
fied financial contract. If a master agree-
ment contains provisions relating to agree-
ments or transactions that are not them-
selves qualified financial contracts, the
master agreement shall be deemed to be a
qualified financial contract only with re-
spect to those transactions that are them-
selves qualified financial contracts.’’.
SEC. 7. FEDERAL DEPOSIT INSURANCE CORPORATION IM-
PROVEMENT ACT OF 1991.
(a) DEFINITIONS.—Section 402 of the Federal De-
posit Insurance Corporation Improvement Act of 1991 (12
U.S.C. 4402) is amended—
(1) in paragraph (2)—
(A) in subparagraph (A)(ii), by inserting
before the semicolon ‘‘, or is exempt from such
registration by order of the Securities and Ex-
change Commission’’; and
(B) in subparagraph (B), by inserting be-
fore the period ‘‘, that has been granted an ex-
emption under section 4(c)(1) of the Com-
modity Exchange Act, or that is a multilateral
clearing organization (as defined in section 408
of this Act)’’;
(2) in paragraph (6)—
(A) by redesignating subparagraphs (B)
through (D) as subparagraphs (C) through (E),
respectively;
(B) by inserting after subparagraph (A)
the following new subparagraph:
‘‘(B) an uninsured national bank or an un-
insured State bank that is a member of the
Federal Reserve System, if the national bank or
State member bank is not eligible to make ap-
plication to become an insured bank under sec-
tion 5 of the Federal Deposit Insurance Act;’’;
and
(C) by amending subparagraph (C) (as re-
designated) to read as follows:
‘‘(C) a branch or agency of a foreign bank,
a foreign bank and any branch or agency of the
foreign bank, or the foreign bank that estab-
lished the branch or agency, as those terms are
defined in section 1(b) of the International
Banking Act of 1978;’’;
(3) in paragraph (11), by inserting before the
period ‘‘and any other clearing organization with
which such clearing organization has a netting con-
tract’’;
(4) by amending paragraph (14)(A)(i) to read
as follows:
‘‘(i) means a contract or agreement
between 2 or more financial institutions,
clearing organizations, or members that
provides for netting present or future pay-
ment obligations or payment entitlements
(including liquidation or close out values
relating to such obligations or entitle-
ments) among the parties to the agree-
ment; and’’; and
(5) by adding at the end the following new
paragraph:
‘‘(15) PAYMENT.—The term ‘payment’ means a
payment of United States dollars, another currency,
or a composite currency, and a noncash delivery, in-
cluding a payment or delivery to liquidate an
unmatured obligation.’’.
(b) ENFORCEABILITY OF BILATERAL NETTING CON-
TRACTS.—Section 403 of the Federal Deposit Insurance
Corporation Improvement Act of 1991 (12 U.S.C. 4403)
is amended—
(1) by striking subsection (a) and inserting the
following:
‘‘(a) GENERAL RULE.—Notwithstanding any other
provision of State or Federal law (other than paragraphs
(8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal
Deposit Insurance Act or any order authorized under sec-
tion 5(b)(2) of the Securities Investor Protection Act of
1970), the covered contractual payment obligations and
the covered contractual payment entitlements between any
2 financial institutions shall be netted in accordance with,
and subject to the conditions of, the terms of any applica-
ble netting contract (except as provided in section
561(b)(2) of title 11, United States Code).’’; and
(2) by adding at the end the following new sub-
section:
‘‘(f) 
ENFORCEABILITY
OF
SECURITY
AGREE-
MENTS.—The provisions of any security agreement or ar-
rangement or other credit enhancement related to one or
more netting contracts between any 2 financial institu-
tions shall be enforceable in accordance with their terms
(except as provided in section 561(b)(2) of title 11, United
‘‘(h) 
ENFORCEABILITY
OF
SECURITY
AGREE-
MENTS.—The provisions of any security agreement or ar-
rangement or other credit enhancement related to one or
more netting contracts between any 2 members of a clear-
ing organization shall be enforceable in accordance with
their terms (except as provided in section 561(b)(2) of
title 11, United States Code), and shall not be stayed,
avoided, or otherwise limited by any State or Federal law
(other than paragraphs (8)(E), (8)(F), and (10)(B) of sec-
tion 11(e) of the Federal Deposit Insurance Act and sec-
tion 5(b)(2) of the Securities Investor Protection Act of
1970).’’.
(d) ENFORCEABILITY OF CONTRACTS WITH UNIN-
SURED
NATIONAL
BANKS, 
UNINSURED
FEDERAL
BRANCHES AND AGENCIES, CERTAIN UNINSURED STATE
MEMBER BANKS, AND EDGE ACT CORPORATIONS.—The
Federal Deposit Insurance Corporation Improvement Act
of 1991 (12 U.S.C. 4401 et seq.) is amended—
(1) by redesignating section 407 as section
407A; and
(2) by inserting after section 406 the following
new section:
‘‘SEC. 407. TREATMENT OF CONTRACTS WITH UNINSURED
NATIONAL 
BANKS, 
UNINSURED 
FEDERAL
BRANCHES AND AGENCIES, CERTAIN UNIN-
SURED STATE MEMBER BANKS, AND EDGE
ACT CORPORATIONS.
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of law, paragraphs (8), (9), (10), and (11) of section
11(e) of the Federal Deposit Insurance Act shall apply
to an uninsured national bank or uninsured Federal
branch or Federal agency, a corporation chartered under
section 25A of the Federal Reserve Act, or an uninsured
State member bank which operates, or operates as, a mul-
tilateral clearing organization pursuant to section 409 of
this Act, except that for such purpose—
‘‘(1) any reference to the ‘Corporation as re-
ceiver’ or ‘the receiver or the Corporation’ shall refer
to the receiver appointed by the Comptroller of the
Currency in the case of an uninsured national bank
or uninsured Federal branch or agency, or to the
receiver appointed by the Board of Governors of the
Federal Reserve System in the case of a corporation
chartered under section 25A of the Federal Reserve
Act or an uninsured State member bank;
‘‘(2) any reference to the ‘Corporation’ (other
than in section 11(e)(8)(D) of such Act), the ‘Cor-
poration, whether acting as such or as conservator
or receiver’, a ‘receiver’, or a ‘conservator’ shall refer
to the receiver or conservator appointed by the
Comptroller of the Currency in the case of an unin-
sured national bank or uninsured Federal branch or
agency, or to the receiver or conservator appointed
by the Board of Governors of the Federal Reserve
System in the case of a corporation chartered under
section 25A of the Federal Reserve Act or an unin-
sured State member bank; and
‘‘(3) any reference to an ‘insured depository in-
stitution’ or ‘depository institution’ shall refer to an
uninsured national bank, an uninsured Federal
branch or Federal agency, a corporation chartered
under section 25A of the Federal Reserve Act, or an
uninsured State member bank which operates, or op-
erates as, a multilateral clearing organization pursu-
ant to section 409 of this Act.
‘‘(b) LIABILITY.—The liability of a receiver or conser-
vator of an uninsured national bank, uninsured Federal
branch or agency, a corporation chartered under section
25A of the Federal Reserve Act, or an uninsured State
member bank which operates, or operates as, a multilat-
eral clearing organization pursuant to section 409 of this
Act, shall be determined in the same manner and subject
to the same limitations that apply to receivers and con-
servators of insured depository institutions under section
11(e) of the Federal Deposit Insurance Act.
‘‘(c) REGULATORY AUTHORITY.—
‘‘(1) IN
GENERAL.—The Comptroller of the
Currency in the case of an uninsured national bank
or uninsured Federal branch or agency and the
Board of Governors of the Federal Reserve System
in the case of a corporation chartered under section
25A of the Federal Reserve Act, or an uninsured
State member bank that operates, or operates as, a
multilateral clearing organization pursuant to sec-
tion 409 of this Act, in consultation with the Fed-
eral Deposit Insurance Corporation, may each pro-
mulgate regulations solely to implement this section.
‘‘(2) SPECIFIC
REQUIREMENT.—In promul-
gating regulations, limited solely to implementing
paragraphs (8), (9), (10), and (11) of section 11(e)
of the Federal Deposit Insurance Act, the Comp-
troller of the Currency and the Board of Governors
of the Federal Reserve System each shall ensure
that the regulations generally are consistent with the
regulations and policies of the Federal Deposit In-
surance Corporation adopted pursuant to the Fed-
eral Deposit Insurance Act.
‘‘(d) DEFINITIONS.—For purposes of this section, the
terms ‘Federal branch’, ‘Federal agency’, and ‘foreign
bank’ have the same meanings as in section 1(b) of the
International Banking Act of 1978.’’.
SEC. 8. BANKRUPTCY CODE AMENDMENTS.
(a) DEFINITIONS OF FORWARD CONTRACT, REPUR-
CHASE AGREEMENT, SECURITIES CLEARING AGENCY,
SWAP AGREEMENT, COMMODITY CONTRACT, AND SECU-
RITIES CONTRACT.—Title 11, United States Code, is
amended—
(1) in section 101—
(A) in paragraph (25)—
(i) by striking ‘‘means a contract’’
and inserting ‘‘means—
‘‘(A) a contract’’;
(ii) by striking ‘‘, or any combination
thereof or option thereon;’’ and inserting
‘‘, or any other similar agreement;’’; and
(iii) by adding at the end the fol-
lowing:
‘‘(B) any combination of agreements or
transactions referred to in subparagraphs (A)
and (C);
‘‘(C) any option to enter into an agreement
or transaction referred to in subparagraph (A)
or (B);
‘‘(D) a master agreement that provides for
an agreement or transaction referred to in sub-
paragraph (A), (B), or (C), together with all
supplements to any such master agreement,
without regard to whether such master agree-
ment provides for an agreement or transaction
that is not a forward contract under this para-
graph, except that such master agreement shall
be considered to be a forward contract under
this paragraph only with respect to each agree-
ment or transaction under such master agree-
ment that is referred to in subparagraph (A),
(B), or (C); or
‘‘(E) any security agreement or arrange-
ment, or other credit enhancement related to
any agreement or transaction referred to in
subparagraph (A), (B), (C), or (D), including
any guarantee or reimbursement obligation by
or to a forward contract merchant or financial
participant in connection with any agreement or
transaction referred to in any such subpara-
graph, but not to exceed the damages in con-
nection with any such agreement or transaction,
measured in accordance with section 562 of this
title;’’;
(B) in paragraph (46), by striking ‘‘on any
day during the period beginning 90 days before
the date of’’ and inserting ‘‘at any time before’’;
(C) by amending paragraph (47) to read
as follows:
‘‘(47) ‘repurchase agreement’ (which definition
also applies to a reverse repurchase agreement)—
‘‘(A) means—
‘‘(i) an agreement, including related
terms, which provides for the transfer of
one or more certificates of deposit, mort-
gage related securities (as defined in sec-
tion 3 of the Securities Exchange Act of
1934), mortgage loans, interests in mort-
gage related securities or mortgage loans,
eligible bankers’ acceptances, qualified for-
eign government securities (defined as a
security that is a direct obligation of, or
that is fully guaranteed by, the central
government of a member of the Organiza-
tion for Economic Cooperation and Devel-
opment), or securities that are direct obli-
gations of, or that are fully guaranteed by,
the United States or any agency of the
United States against the transfer of funds
by the transferee of such certificates of de-
posit, eligible bankers’ acceptances, securi-
ties, mortgage loans, or interests, with a
simultaneous agreement by such transferee
to transfer to the transferor thereof certifi-
cates of deposit, eligible bankers’ accept-
ance, securities, mortgage loans, or inter-
ests of the kind described in this clause,
at a date certain not later than 1 year
after such transfer or on demand, against
the transfer of funds;
‘‘(ii) any combination of agreements
or transactions referred to in clauses (i)
and (iii);
‘‘(iii) an option to enter into an agree-
ment or transaction referred to in clause
(i) or (ii);
‘‘(iv) a master agreement that pro-
vides for an agreement or transaction re-
ferred to in clause (i), (ii), or (iii), together
with all supplements to any such master
agreement, without regard to whether such
master agreement provides for an agree-
ment or transaction that is not a repur-
chase agreement under this paragraph, ex-
cept that such master agreement shall be
considered to be a repurchase agreement
under this paragraph only with respect to
each agreement or transaction under the
master agreement that is referred to in
clause (i), (ii), or (iii); or
‘‘(v) any security agreement or ar-
rangement or other credit enhancement re-
lated to any agreement or transaction re-
ferred to in clause (i), (ii), (iii), or (iv), in-
cluding any guarantee or reimbursement
obligation by or to a repo participant or fi-
nancial participant in connection with any
agreement or transaction referred to in
any such clause, but not to exceed the
damages in connection with any such
agreement or transaction, measured in ac-
cordance with section 562 of this title; and
‘‘(B) does not include a repurchase obliga-
tion under a participation in a commercial
mortgage loan;’’;
(D) in paragraph (48), by inserting ‘‘, or
exempt from such registration under such sec-
tion pursuant to an order of the Securities and
Exchange Commission,’’ after ‘‘1934’’; and
(E) by amending paragraph (53B) to read
as follows:
‘‘(53B) ‘swap agreement’—
‘‘(A) means—
‘‘(i) any agreement, including the
terms and conditions incorporated by ref-
erence in such agreement, which is—
‘‘(I) an interest rate swap, op-
tion, future, or forward agreement, in-
cluding a rate floor, rate cap, rate col-
lar, cross-currency rate swap, and
basis swap;
‘‘(II) a spot, same day-tomorrow,
tomorrow-next, forward, or other for-
eign exchange or precious metals
agreement;
‘‘(III) a currency swap, option,
future, or forward agreement;
‘‘(IV) an equity index or equity
swap, option, future, or forward
agreement;
‘‘(V) a debt index or debt swap,
option, future, or forward agreement;
‘‘(VI) a total return, credit
spread or credit swap, option, future,
or forward agreement;
‘‘(VII) a commodity index or a
commodity swap, option, future, or
forward agreement; or
‘‘(VIII) a weather swap, weather
derivative, or weather option;
‘‘(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;
‘‘(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
any such clause, but not to exceed the
damages in connection with any such
agreement or transaction, measured in ac-
cordance with section 562 of this title; 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
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-
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
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 of this title; 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:
‘‘(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
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 of this title;’’.
(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, or receiver
or conservator for such entity and, when any
such Federal reserve bank, receiver, conservator
or entity is acting as agent or custodian for a
customer in connection with a securities con-
tract (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 filing of the
petition, has one or more agreements or trans-
actions 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 during the pre-
vious 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 entity (other than an affil-
iate) 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
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 filing
of the petition, is a party to an outstanding master
netting agreement with the debtor;’’.
(d) SWAP AGREEMENTS, SECURITIES CONTRACTS,
COMMODITY CONTRACTS, FORWARD CONTRACTS, REPUR-
CHASE AGREEMENTS, AND MASTER NETTING AGREE-
MENTS UNDER THE AUTOMATIC-STAY.—
(1) IN GENERAL.—Section 362(b) of title 11,
United States Code, 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;’’;
(D) in paragraph (18) by striking the pe-
riod at the end and inserting ‘‘; or’’; and
(E) by inserting after paragraph (18) the
following new paragraph:
‘‘(19) 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.’’.
(2) LIMITATION.—Section 362 of title 11,
United States Code, is amended by adding at the
end the following:
‘‘(i) The exercise of rights not subject to the stay
arising under subsection (a) pursuant to paragraph (6),
(7), (17), or (19) 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’’ each place such term
appears; 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
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.’’.
(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-
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
‘‘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’’;
(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.—
(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 section 304
‘‘(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
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
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
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 section 304, so
that enforcement of contractual provisions of such con-
tracts and agreements in accordance with their terms will
not be stayed or otherwise limited by operation of any pro-
vision 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).’’.
(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 section 304.’’.
(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.’’.
(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, secu-
rities clearing agency, swap participant, repo participant,
financial participant, or master netting agreement partici-
pant 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)(19), 555, 556, 559,
560, or 561)’’;
(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)(19), 555, 556, 559, 560, or 561
of this title)’’; and
(3) 
in 
subsection 
(b)(1), 
by 
striking
‘‘362(b)(14),’’ 
and 
inserting 
‘‘362(b)(17),
362(b)(19), 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’’;
(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’’;
(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
(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. 9. RECORDKEEPING REQUIREMENTS.
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).’’.
SEC. 10. 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
‘‘(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. 11. DAMAGE MEASURE.
(a) IN GENERAL.—Title 11, United States Code, is
amended—
(1) by inserting after section 561, as added by
section 8(k) of this Act, 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
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
‘‘(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 8(k)(2) of this Act) 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 of this title shall be allowed under sub-
section (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 petition.’’.
SEC. 12. 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:
‘‘(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
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.’’.
SEC. 13. ASSET-BACKED SECURITIZATIONS.
Section 541 of title 11, United States Code, is
amended—
(1) in subsection (b), by inserting after para-
graph (5) the following:
‘‘(6) any eligible asset (or proceeds thereof), to
the extent that such eligible asset was transferred by
the debtor, before the date of commencement of the
case, to an eligible entity in connection with an
asset-backed securitization, except to the extent such
asset (or proceeds or value thereof) may be recov-
ered by the trustee under section 550 by virtue of
avoidance under section 548(a);’’; and
(2) by adding at the end the following new sub-
section:
‘‘(e) For purposes of this section—
‘‘(1) the term ‘asset-backed securitization’
means a transaction in which eligible assets trans-
ferred to an eligible entity are used as the source of
payment on securities, including, without limitation,
all securities issued by governmental units, at least
one class or tranche of which was rated investment
grade by one or more nationally recognized securities
rating organizations, when the securities were ini-
tially issued by an issuer;
‘‘(2) the term ‘eligible asset’ means—
‘‘(A) financial assets (including interests
therein and proceeds thereof), either fixed or re-
volving, whether or not the same are in exist-
ence as of the date of the transfer, including
residential and commercial mortgage loans, con-
sumer receivables, trade receivables, assets of
governmental units, including payment obliga-
tions relating to taxes, receipts, fines, tickets,
and other sources of revenue, and lease receiv-
ables, that, by their terms, convert into cash
within a finite time period, plus any residual in-
terest in property subject to receivables in-
cluded in such financial assets plus any rights
or other assets designed to assure the servicing
or timely distribution of proceeds to security
holders;
‘‘(B) cash; and
this title or any section hereof), irrespective and
without limitation of—
‘‘(A) whether the debtor directly or indi-
rectly obtained or held an interest in the issuer
or in any securities issued by the issuer;
‘‘(B) whether the debtor had an obligation
to repurchase or to service or supervise the
servicing of all or any portion of such eligible
assets; or
‘‘(C) the characterization of such sale, con-
tribution, or other conveyance for tax, account-
ing, regulatory reporting, or other purposes.’’.
SEC. 
14. 
APPLICABILITY 
OF 
OTHER 
SECTIONS 
TO
CHAPTER 9.
Section 901(a) of title 11, United States Code, is
amended—
(1) by inserting ‘‘555, 556,’’ after ‘‘553,’’; and
(2) by inserting ‘‘559, 560, 561, 562’’ after
‘‘557,’’.
SEC. 15. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.
(a) EFFECTIVE DATE.—This Act shall take effect on
the date of enactment of this Act.
(b) APPLICATION OF AMENDMENTS.—The amend-
ments made by this Act shall apply with respect to cases
commenced or appointments made under any Federal or
State law on or after the date of enactment of this Act,
but shall not apply with respect to cases commenced or
appointments made under any Federal or State law before
the date of enactment of this Act.
SEC. 16. SAVINGS CLAUSE.
The meanings of terms used in this Act are applicable
for purposes of this Act only, and shall not be construed
or applied so as to challenge or affect the characterization,
definition, or treatment of any similar terms under any
other statute, regulation, or rule, including the Gramm-
Leach-Bliley Act, the Legal Certainty for Bank Products
Act of 2000, the securities laws (as that term is defined
in section 3(a)(47) of the Securities Exchange Act of
1934), and the Commodity Exchange Act.
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