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chase agreement or securities lent under a
securities lending agreement.
‘‘(iii) As used in this section, the term
‘contractual right’ includes a right set
forth in a rule or bylaw of a national secu-
rities exchange, a national securities asso-
ciation, or a securities clearing agency, a
right set forth in a bylaw of a clearing or-
ganization or contract market or in a reso-
lution 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.’’.
SEC. 13. ASSET-BACKED SECURITIZATIONS.
Section 541 of title 11, United States Code, is
amended—
(1) in subsection (b)—
(A) by striking ‘‘or’’ at the end of para-
graph (4)(B)(ii);
(B) by redesignating paragraph (5) as
paragraph (6); and
(C) by inserting after paragraph (4) the
following new paragraph:
‘‘(5) any eligible asset (or proceeds thereof), to
the extent that such eligible asset was transferred by
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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)(1); or’’; and
(2) by adding at the end the following new sub-
section:
‘‘(e) For purposes of this section, the following defini-
tions shall apply:
‘‘(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 all securities issued
by governmental units, at least 1 class or tranche of
which is rated investment grade by 1 or more na-
tionally recognized securities rating organizations,
when the securities are initially 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 such assets are in exist-
ence as of the date of the transfer, including
residential and commercial mortgage loans, con-
sumer receivables, trade receivables, assets of
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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
‘‘(C) securities, including all securities
issued by governmental units.
‘‘(3) the term ‘eligible entity’ means—
‘‘(A) an issuer; or
‘‘(B) a trust, corporation, partnership, gov-
ernmental unit, limited liability company (in-
cluding a single member limited liability com-
pany), or other entity engaged exclusively in the
business of acquiring and transferring eligible
assets directly or indirectly to an issuer and
taking actions ancillary thereto;
‘‘(4) the term ‘issuer’ means a trust, corpora-
tion, partnership, governmental unit, limited liability
company (including a single member limited liability
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company), or other entity engaged exclusively in the
business of acquiring and holding eligible assets,
issuing securities backed by eligible assets, and tak-
ing actions ancillary thereto; and
‘‘(5) the term ‘transferred’ means the debtor,
pursuant to a written agreement, represented and
warranted that eligible assets were sold, contributed,
or otherwise conveyed with the intention of removing
them from the estate of the debtor pursuant to sub-
section (b)(5) (whether or not reference is made to
this title or any section of this title), irrespective,
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. APPLICATION OF AMENDMENTS.
The amendments made by this Act shall apply with
respect to cases commenced or appointments made under
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any Federal or State law after the date of the enactment
of this Act, but shall not apply with respect to cases com-
menced or appointments made under any Federal or State
law before the date of the enactment of this Act.
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