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the Securities Exchange Act of 1934),
mortgage loans, interests in mortgage-
related securities or mortgage loans,
eligible bankers’ acceptances, qualified
foreign government securities or secu-
rities that are direct obligations 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 certifi-
cates of deposit, eligible bankers’ ac-
ceptances, securities, loans, or inter-
ests with a simultaneous agreement
by such transferee to transfer to the
transferor thereof certificates of de-
posit, eligible bankers’ acceptances,
securities, loans, or interests as de-
scribed above, at a date certain not
later than 1 year after such transfers
or on demand, against the transfer of
funds, or any other similar agreement;
‘‘(II) does not include any repur-
chase obligation under a participation
in a commercial mortgage loan unless
the Corporation determines by regula-
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tion, resolution, or order to include
any such participation within the
meaning of such term;
‘‘(III) means any combination of
agreements or transactions referred to
in subclauses (I) and (IV);
‘‘(IV) means any option to enter
into any agreement or transaction re-
ferred to in subclause (I) or (III);
‘‘(V) means a master agreement
that provides for an agreement or
transaction referred to in subclause
(I), (III), or (IV), together with all
supplements to any such master
agreement, without regard to whether
the master agreement provides for an
agreement or transaction that is not a
repurchase 
agreement 
under 
this
clause, except that the master agree-
ment shall be considered to be a re-
purchase agreement under this sub-
clause only with respect to each agree-
ment or transaction under the master
agreement that is referred to in sub-
clause (I), (III), or (IV); and
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‘‘(VI) means a security agree-
ment or arrangement or other credit
enhancement related to any agree-
ment or transaction referred to in
subclause (I), (III), (IV), or (V).
For purposes of this clause, the term
‘qualified foreign government security’
means a security that is a direct obligation
of, or that is fully guaranteed by, the cen-
tral government of a member of the Orga-
nization for Economic Cooperation and
Development (as determined by regulation
or order adopted by the appropriate Fed-
eral banking authority).’’.
(f) DEFINITION
OF SWAP AGREEMENT.—Section
11(e)(8)(D)(iv) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(8)(D)(vi)) is amended to read as follows:
‘‘(vi) SWAP
AGREEMENT.—The term
‘swap agreement’ means—
‘‘(I) any agreement, including the
terms and conditions incorporated by
reference in any such agreement,
which is an interest rate swap, option,
future, or forward agreement, includ-
ing a rate floor, rate cap, rate collar,
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cross-currency rate swap, and basis
swap; a spot, same day-tomorrow, to-
morrow-next, forward, or other for-
eign exchange or precious metals
agreement; a currency swap, option,
future, or forward agreement; an eq-
uity index or equity swap, option, fu-
ture, or forward agreement; a debt
index or debt swap, option, future, or
forward agreement; a credit spread or
credit swap, option, future, or forward
agreement; a commodity index or
commodity swap, option, future, or
forward agreement;
‘‘(II) any agreement or trans-
action similar to any other agreement
or transaction referred to in this
clause that is presently, or in the fu-
ture becomes, regularly entered into
in the swap market (including terms
and conditions incorporated by ref-
erence in such agreement) and that is
a forward, swap, future, or option on
one or more rates, currencies, com-
modities, equity securities or other eq-
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uity instruments, debt securities or
other debt instruments, or economic
indices or measures of economic risk
or value;
‘‘(III) any combination of agree-
ments or transactions referred to in
this clause;
‘‘(IV) any option to enter into
any agreement or transaction referred
to in this clause;
‘‘(V) a master agreement that
provides for an agreement or trans-
action referred to in subclause (I),
(II), (III), or (IV), together with all
supplements to any such master
agreement, without regard to whether
the master agreement contains an
agreement or transaction that is not a
swap agreement under this clause, ex-
cept that the master agreement shall
be considered to be a swap agreement
under this clause only with respect to
each agreement or transaction under
the master agreement that is referred
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to in subclause (I), (II), (III), or (IV);
and
‘‘(VI) any security agreement or
arrangement or other credit enhance-
ment related to any agreements or
transactions referred to in subpara-
graph (I), (II), (III), or (IV).
Such term 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 stat-
ute, regulation, or rule, including the Secu-
rities Act of 1933, the Securities Exchange
Act of 1934, the Public Utility Holding
Company Act of 1935, the Trust Indenture
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, and the regulations promulgated by
the Securities and Exchange Commission
or the Commodity Futures Trading Com-
mission.’’.
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(g) 
DEFINITION
OF
TRANSFER.—Section
11(e)(8)(D)(viii) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(8)(D)(viii)) is amended to read as follows:
‘‘(viii) TRANSFER.—The term ‘trans-
fer’ means every mode, direct or indirect,
absolute or conditional, voluntary or invol-
untary, of disposing of or parting with
property or with an interest in property,
including retention of title as a security in-
terest and foreclosure of the depository
institutions’s equity of redemption.’’.
(h) TREATMENT
OF QUALIFIED FINANCIAL CON-
TRACTS.—Section 11(e)(8) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1821(e)(8)) is amended—
(1) in subparagraph (A), by striking ‘‘para-
graph (10)’’ and inserting ‘‘paragraphs (9) and
(10)’’;
(2) in subparagraph (A)(i), by striking ‘‘to
cause the termination or liquidation’’ and inserting
‘‘such person has to cause the termination, liquida-
tion, or acceleration’’;
(3) by amending subparagraph (A)(ii) to read
as follows:
‘‘(ii) any right under any security
agreement or arrangement or other credit
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enhancement related to one or more quali-
fied financial contracts described in clause
(i);’’; and
(4) by amending subparagraph (E)(ii) to read
as follows:
‘‘(ii) any right under any security
agreement or arrangement or other credit
enhancement related to one or more quali-
fied financial contracts described in clause
(i);’’.
(i) 
AVOIDANCE
OF
TRANSFERS.—Section
11(e)(8)(C)(i) of the Federal Deposit Insurance Act (12
U.S.C. 1821(e)(8)(C)(i)) is amended by inserting ‘‘section
5242 of the Revised Statutes of the United States (12
U.S.C. 91) or any other Federal or State law relating to
the avoidance of preferential or fraudulent transfers,’’ be-
fore ‘‘the Corporation’’.
SEC. 1002. AUTHORITY OF THE CORPORATION WITH RE-
SPECT TO FAILED AND FAILING INSTITU-
TIONS.
(a) IN GENERAL.—Section 11(e)(8) of the Federal
Deposit Insurance Act (12 U.S.C. 1821(e)(8)) is
amended—
(1) in subparagraph (E), by striking ‘‘other
than paragraph (12) of this subsection, subsection
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(d)(9)’’ and inserting ‘‘other than subsections (d)(9)
and (e)(10)’’; and
(2) by adding at the end the following new sub-
paragraphs:
‘‘(F) CLARIFICATION.—No provision of law
shall be construed as limiting the right or
power of the Corporation, or authorizing any
court or agency to limit or delay, in any man-
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 (e)(1) of
this section.
‘‘(G) WALKAWAY
CLAUSES
NOT
EFFEC-
TIVE.—
‘‘(i) IN
GENERAL.—Notwithstanding
the provisions of subparagraphs (A) and
(E), and sections 403 and 404 of the Fed-
eral Deposit Insurance Corporation Im-
provement Act of 1991, no walkaway
clause shall be enforceable in a qualified fi-
nancial contract of an insured depository
institution in default.
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‘‘(ii) WALKAWAY CLAUSE DEFINED.—
For purposes of this subparagraph, the
term ‘walkaway clause’ means a provision
in a qualified financial contract that, after
calculation of a value of a party’s position
or an amount due to or from 1 of the par-
ties in accordance with its terms upon ter-
mination, liquidation, or acceleration of the
qualified financial contract, either does not
create a payment obligation of a party or
extinguishes a payment obligation of a
party in whole or in part solely because of
such party’s status as a nondefaulting
party.’’.
(b) TECHNICAL AND CONFORMING AMENDMENT.—
Section 11(e)(12)(A) of the Federal Deposit Insurance
Act (12 U.S.C. 1821(e)(12)(A)) is amended by inserting
‘‘or the exercise of rights or powers’’ after ‘‘the appoint-
ment’’.
SEC. 1003. AMENDMENTS RELATING TO TRANSFERS OF
QUALIFIED FINANCIAL CONTRACTS.
(a) TRANSFERS
OF QUALIFIED FINANCIAL CON-
TRACTS TO FINANCIAL INSTITUTIONS.—Section 11(e)(9)
of the Federal Deposit Insurance Act (12 U.S.C.
1821(e)(9)) is amended to read as follows:
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‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CON-
TRACTS.—
‘‘(A) IN GENERAL.—In making any trans-
fer of assets or liabilities of a depository institu-
tion in default which includes any qualified fi-
nancial contract, the conservator or receiver for
such depository institution 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
proceeding—
‘‘(I) all qualified financial con-
tracts between any person or any af-
filiate of such person and the deposi-
tory institution in default;
‘‘(II) all claims of such person or
any affiliate of such person against
such depository institution under any
such contract (other than any claim
which, under the terms of any such
contract, is subordinated to the claims
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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 pursuant to subparagraph (A)(i), the con-
servator or receiver for such depository institu-
tion shall not make such transfer to a foreign
bank, financial institution organized under the
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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 subject to the rules of a
clearing organization, the clearing organization
shall not be required to accept the transferee as
a member by virtue of the transfer.
‘‘(D) DEFINITION.—For purposes of this
section, the term ‘financial institution’ means a
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broker or dealer, a depository institution, a fu-
tures commission merchant, or any other insti-
tution as determined by the Corporation by reg-
ulation to be a financial institution.’’.
(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 by amending the flush material following clause
(ii) to read as follows: ‘‘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 conservatorship.’’.
(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 further
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.—
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‘‘(i) RECEIVERSHIP.—A person who is
a party to a qualified financial contract
with an insured depository institution may
not exercise any right such person has to
terminate, liquidate, or net such contract
under paragraph (8)(A) or section 403 or
404 of the Federal Deposit Insurance Cor-
poration Improvement Act of 1991 solely
by reason of or incidental to the appoint-
ment of a receiver for the depository insti-
tution (or the insolvency or financial condi-
tion of the depository 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 such person has
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to terminate, liquidate, or net such con-
tract under paragraph (8)(E) or sections
403 or 404 of the Federal Deposit Insur-
ance 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 insti-
tution for which the conservator has been
appointed).
‘‘(iii) NOTICE.—For purposes of this
subsection, 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) of this subsection.
‘‘(C) TREATMENT
OF
BRIDGE
BANKS.—
The following institutions shall not be consid-
ered a financial institution for which a conser-
vator, receiver, trustee in bankruptcy, or other
legal custodian has been appointed or which is
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otherwise the subject of a bankruptcy or insol-
vency proceeding for purposes of subsection
(e)(9)—
‘‘(i) a bridge bank; or
‘‘(ii) a depository institution organized
by the Corporation, for which a conser-
vator is appointed either—
‘‘(I) immediately upon the orga-
nization of the institution; or
‘‘(II) at the time of a purchase
and assumption transaction between
such institution and the Corporation
as receiver for a depository institution
in default.’’.
SEC. 1004. 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 further amended—
(1) by redesignating paragraphs (11) through
(15) as paragraphs (12) through (16), respectively;
and
(2) by inserting after paragraph (10) the fol-
lowing new paragraph:
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‘‘(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).’’.
SEC. 1005. CLARIFYING AMENDMENT RELATING TO MAS-
TER 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
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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. 1006. FEDERAL DEPOSIT INSURANCE CORPORATION
IMPROVEMENT 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 (6)—
(A) by redesignating subparagraphs (B)
through (D) as subparagraphs (C) through (E),
respectively;
(B) by inserting after subparagraph (A)
the following new subparagraph:
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‘‘(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;’’;
(2) in paragraph (11), by adding before the pe-
riod ‘‘and any other clearing organization with which
such clearing organization has a netting contract’’;
(3) by amending paragraph (14)(A)(i) to read
as follows:
‘‘(i) means a contract or agreement
between two or more financial institutions,
clearing organizations, or members that
provides for netting present or future pay-
ment obligations or payment entitlements
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(including liquidation or closeout values re-
lating to such obligations or entitlements)
among the parties to the agreement; and’’;
and
(4) 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 amending subsection (a) to read as fol-
lows:
‘‘(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 two
financial institutions shall be netted in accordance with,
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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 two financial institu-
tions 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 para-
graphs (8)(E), (8)(F), and (10)(B) of section 11(e) of the
Federal Deposit Insurance Act and section 5(b)(2) of the
Securities Investor Protection Act of 1970).’’.
(c) ENFORCEABILITY OF CLEARING ORGANIZATION
NETTING CONTRACTS.—Section 404 of the Federal De-
posit Insurance Corporation Improvement Act of 1991 (12
U.S.C. 4404) is amended—
(1) by amending subsection (a) to read as fol-
lows:
‘‘(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
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Deposit Insurance Act and any order authorized under
section 5(b)(2) of the Securities Investor Protection Act
of 1970, the covered contractual payment obligations and
the covered contractual payment entitlements of a member
of a clearing organization to and from all other members
of a clearing organization shall be netted in accordance
with and subject to the conditions of any applicable net-
ting 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:
‘‘(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 two members of a
clearing 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
AND UNINSURED FEDERAL
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BRANCHES AND AGENCIES.—The Federal Deposit Insur-
ance Corporation Improvement Act of 1991 (12 U.S.C.
4401 et seq.) is amended—
(1) by redesignating section 407 as section 408;
and
(2) by adding after section 406 the following
new section:
‘‘SEC. 407. TREATMENT OF CONTRACTS WITH UNINSURED
NATIONAL BANKS AND UNINSURED FEDERAL
BRANCHES AND AGENCIES.
‘‘(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 except—
‘‘(1) any reference to the ‘Corporation as re-
ceiver’ or ‘the receiver or the Corporation’ shall refer
to the receiver of an uninsured national bank or un-
insured Federal branch or Federal agency appointed
by the Comptroller of the Currency;
‘‘(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 of an uninsured na-
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tional bank or uninsured Federal branch or Federal
agency appointed by the Comptroller of the Cur-
rency; and
‘‘(3) any reference to an ‘insured depository in-
stitution’ or ‘depository institution’ shall refer to an
uninsured national bank or an uninsured Federal
branch or Federal agency.
‘‘(b) LIABILITY.—The liability of a receiver or conser-
vator of an uninsured national bank or uninsured Federal
branch or agency shall be determined in the same manner
and subject to the same limitations that apply to receivers
and conservators 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 consultation with the Federal Deposit
Insurance Corporation, may promulgate regulations
to implement this section.
‘‘(2) SPECIFIC
REQUIREMENT.—In promul-
gating regulations to implement this section, the
Comptroller of the Currency shall ensure that the
regulations generally are consistent with the regula-
tions and policies of the Federal Deposit Insurance
Corporation adopted pursuant to the Federal De-
posit Insurance Act.
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‘‘(d) DEFINITIONS.—For purposes of this section, the
terms ‘Federal branch’, ‘Federal agency’, and ‘foreign
bank’ have the same meaning as in section 1(b) of the
International Banking Act.’’.
SEC. 1007. 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);
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‘‘(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) a security agreement or arrangement,
or other credit enhancement related to any
agreement or transaction referred to in sub-
paragraph (A), (B), (C), or (D), but not to ex-
ceed the actual value of such contract, option,
agreement, or transaction on the date of the fil-
ing of the petition;’’;
(B) in paragraph (46), by striking ‘‘on any
day during the period beginning 90 days before
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the date of’’ and replacing it with ‘‘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)
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 the
Securities Exchange Act of 1934), mort-
gage loans, interests in mortgage-related
securities or mortgage loans, eligible bank-
ers’ acceptances, qualified foreign govern-
ment securities; or securities that are di-
rect obligations of, or that are fully guar-
anteed by, the United States or any agency
of the United States against the transfer
of funds by the transferee of such certifi-
cates of deposit, eligible bankers’ accept-
ances, securities, loans, or interests; with a
simultaneous agreement by such transferee
to transfer to the transferor thereof certifi-
cates of deposit, eligible bankers’ accept-
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ance, securities, loans, or interests of the
kind described above, 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
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‘‘(v) a security agreement or arrange-
ment or other credit enhancement related
to any agreement or transaction referred
to in clause (i), (ii), (iii), or (iv), but not
to exceed the actual value of such contract
on the date of the filing of the petition;
and
‘‘(B) does not include a repurchase obliga-
tion under a participation in a commercial
mortgage loan,
and, for purposes of this paragraph, the term ‘quali-
fied foreign government security’ means a security
that is a direct obligation of, or that is fully guaran-
teed by, the central government of a member of the
Organization for Economic Cooperation and Devel-
opment;’’;
(D) in paragraph (48) by inserting ‘‘or ex-
empt from such registration under such section
pursuant to an order of the Securities and Ex-
change Commission’’ after ‘‘1934’’; and
(E) by amending paragraph (53B) to read
as follows:
‘‘(53B) ‘swap agreement’—
‘‘(A) means—
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‘‘(i) any agreement, including the
terms and conditions incorporated by ref-
erence in such agreement, which is an in-
terest rate swap, option, future, or forward
agreement, including a rate floor, rate cap,
rate collar, cross-currency rate swap, and
basis swap; a spot, same day-tomorrow, to-
morrow-next, forward, or other foreign ex-
change or precious metals agreement; a
currency swap, option, future, or forward
agreement; an equity index or an equity
swap, option, future, or forward agree-
ment; a debt index or a debt swap, option,
future, or forward agreement; a credit
spread or a credit swap, option, future, or
forward agreement; or a commodity index
or a commodity swap, option, future, or
forward agreement;
‘‘(ii) any agreement or transaction
similar to any other agreement or trans-
action referred to in this paragraph that—
‘‘(I) is presently, or in the future
becomes, regularly entered into in the
swap market (including terms and
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conditions incorporated by reference
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, or
on an economic index or measure of
economic risk or value;
‘‘(iii) any combination of agreements
or transactions referred to in this para-
graph;
‘‘(iv) any option to enter into an
agreement or transaction referred to in
this paragraph;
‘‘(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
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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
‘‘(B) any security agreement or arrange-
ment or other credit enhancement related to
any agreements or transactions referred to in
subparagraph (A); and
‘‘(C) is applicable for purposes of this title
only and shall not be construed or applied so as
to challenge or affect the characterization, defi-
nition, 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, and the
regulations prescribed by the Securities and Ex-
change Commission or the Commodity Futures
Trading Commission.’’;
(2) by amending section 741(7) to read as fol-
lows:
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‘‘(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, 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-
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curity certificate of deposit, 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 paragraph;
‘‘(vi) any combination of the agree-
ments or transactions referred to in this
paragraph;
‘‘(vii) any option to enter into any
agreement or transaction referred to in
this paragraph;
‘‘(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
paragraph, except that such master agree-
ment shall be considered to be a securities
contract under this paragraph only with
respect to each agreement or transaction
under such master agreement that is re-
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ferred to in clause (i), (ii), (iii), (iv), (v),
(vi), or (vii); or
‘‘(ix) any security agreement or ar-
rangement, or other credit enhancement,
related to any agreement or transaction re-
ferred to in this paragraph, but not to ex-
ceed the actual value of such contract on
the date of the filing of the petition; 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-
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paragraph (A), (B), (C), (D), (E), (F), (G), or
(H), together with all supplements to such mas-
ter netting agreement, without regard to wheth-
er the master netting agreement provides for an
agreement or transaction that is not a com-
modity contract under this paragraph, except
that the master agreement shall be considered
to be a commodity contract under this para-
graph only with respect to each agreement or
transaction under the master agreement that is
referred to in subparagraph (A), (B), (C), (D),
(E), (F), (G), or (H); or
‘‘(J) a security agreement or arrangement,
or other credit enhancement related to any
agreement or transaction referred to in this
paragraph, but not to exceed the actual value of
such contract on the date of the filing of the pe-
tition;’’.
(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 amending paragraph (22) to read as fol-
lows:
‘‘(22) ‘financial institution’ means—
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‘‘(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 of this title,
such customer; or
‘‘(B) in connection with a securities con-
tract, as defined in section 741 of this title, an
investment company registered under the In-
vestment Company Act of 1940;’’;
(2) by inserting after paragraph (22) the fol-
lowing:
‘‘(22A) ‘financial participant’ means an entity
that, at the time it enters into a securities contract,
commodity contract or forward contract, or at the
time of the filing of the petition, has one or more
agreements or transactions described in paragraph
(1), (2), (3), (4), or (5) of section 561(a) with the
debtor or any other entity (other than an affiliate)
of 
a 
total 
gross 
dollar 
value 
of 
at 
least
$1,000,000,000 in notional or actual principal
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amount outstanding on any day during the previous
15-month period, or has gross mark-to-market posi-
tions of at least $100,000,000 (aggregated across
counterparties) in one or more such agreement or
transaction with the debtor or any other entity
(other than an affiliate) on any day during the pre-
vious 15-month period;’’; and
(3) by amending paragraph (26) to read as fol-
lows:
‘‘(26) ‘forward contract merchant’ means a
Federal reserve bank, or an entity whose business
consists in whole or in part of entering into forward
contracts as or with merchants or in a commodity,
as defined or in section 761 of this title, or any simi-
lar good, article, service, right, or interest which is
presently or in the future becomes the subject of
dealing or 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’ means an
agreement providing for the exercise of rights, in-
cluding rights of netting, setoff, liquidation, termi-
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nation, acceleration, or closeout, under or in connec-
tion 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. If a master netting
agreement contains provisions relating to agree-
ments or transactions that are not contracts de-
scribed in paragraphs (1) through (5) of section
561(a), the master netting agreement shall be
deemed to be a master netting agreement only with
respect to those agreements or transactions that are
described in any one or more of the 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, as amended by sections 118,
132, 136, 142, 203, and 818, is amended—
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(A) in paragraph (6), by inserting ‘‘,
pledged to, and under the control of,’’ after
‘‘held by’’;
(B) in paragraph (7), by inserting ‘‘,
pledged to, and under the control of,’’ after
‘‘held by’’;
(C) by amending paragraph (17) to read
as follows:
‘‘(17) under subsection (a), of the setoff by a
swap 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 participant under or in con-
nection with any swap agreement or against cash,
securities, or other property held by, pledged to, and
under the control of, or due from such swap partici-
pant to margin guarantee, secure, or settle a swap
agreement;’’;
(D) in paragraph (30) by striking ‘‘or’’ at
the end;
(E) in paragraph (31) by striking the pe-
riod at the end and inserting ‘‘; or’’; and
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(F) by inserting after paragraph (31) the
following new paragraph:
‘‘(32) 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 or and under the control of, or due from
such master netting agreement participant to mar-
gin, guarantee, secure, or settle such agreements or
any contract or agreement subject to such agree-
ments, to the extent such participant is eligible to
exercise such offset rights under paragraph (6), (7),
or (17) for each individual contract covered by the
master netting agreement in issue.’’.
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(2) LIMITATION.—Section 362 of title 11,
United States Code, as amended by sections 120,
302, and 412, is amended by adding at the end the
following:
‘‘(l) LIMITATION.—The exercise of rights not subject
to the stay arising under subsection (a) pursuant to para-
graph (6), (7), or (17), or (31) 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, as amended by sections 207 and 302,
is amended—
(1) in subsection (g) (as added by section 103
of Public Law 101–311)—
(A) by striking ‘‘under a swap agreement’’;
and
(B) by striking ‘‘in connection with a swap
agreement’’ and inserting ‘‘under or in connec-
tion with any swap agreement’’; and
(2) by adding at the end the following:
‘‘(j) Notwithstanding sections 544, 545, 547,
548(a)(2)(B), and 548(b) of this title, the trustee may not
avoid a transfer made by or to a master netting agreement
participant under or in connection with any master netting
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agreement or any individual contract covered thereby that
is made before the commencement of the case, except
under section 548(a)(1)(A) of this title, and except to the
extent the trustee could otherwise avoid such a transfer
made under an individual contract covered by such master
netting 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’’;
(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, with respect to a transfer under any in-
dividual contract covered thereby, to the extent such
master netting agreement participant otherwise did
not take (or is otherwise not deemed to have taken)
such transfer for value.’’.
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(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’’;
and
(2) in the first sentence, by striking ‘‘liquida-
tion’’ and inserting ‘‘liquidation, termination, or ac-
celeration’’.
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(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’’;
and
(2) in the first sentence, by striking ‘‘liquida-
tion’’ and inserting ‘‘liquidation, termination, or ac-
celeration’’.
(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’’;
and
(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’’; and
(3) by striking ‘‘in connection with any swap
agreement’’ and inserting ‘‘in connection with the
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termination, liquidation, or acceleration of one or
more swap agreements’’.
(k) LIQUIDATION, TERMINATION, ACCELERATION, OR
OFFSET UNDER A MASTER NETTING AGREEMENT AND
ACROSS CONTRACTS.—(1) 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
‘‘(a) IN GENERAL.—Subject to subsection (b), the ex-
ercise of any contractual right, because of a condition of
the kind specified in section 365(e)(1), to cause the termi-
nation, liquidation, or acceleration of or to offset or net
termination values, payment amounts or other transfer ob-
ligations arising under or in connection with one or more
(or the termination, 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,
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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) EXCEPTION.—
‘‘(1) A party may exercise a contractual right
described in subsection (a) to terminate, liquidate, or
accelerate only to the extent that such party could
exercise such a right under section 555, 556, 559,
or 560 for each individual contract covered by the
master netting agreement in issue.
‘‘(2) If a debtor is a commodity broker subject
to subchapter IV of chapter 7 of this title—
‘‘(A) a party may not net or offset an obli-
gation to the debtor arising under, or in con-
nection with, a commodity contract against any
claim arising under, or in connection with,
other instruments, contracts, or agreements
listed in subsection (a) except to the extent the
party has positive net equity in the commodity
accounts at the debtor, as calculated under sub-
chapter IV; and
‘‘(B) another commodity broker may not
net or offset an obligation to the debtor arising
under, or in connection with, a commodity con-
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tract entered into or held on behalf of a cus-
tomer of the debtor against any claim arising
under, or in connection with, other instruments,
contracts, or agreements listed in subsection
(a).
‘‘(c) DEFINITION.—As used in this section, the term
‘contractual right’ includes a right set forth in a rule or
bylaw of a national securities exchange, a national securi-
ties 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 evidenced in writing, arising
under common law, under law merchant, or by reason of
normal business practice.’’.
(2) CONFORMING AMENDMENT.—The table of sec-
tions of chapter 9 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.
(l) ANCILLARY PROCEEDINGS.—Section 304 of title
11, United States Code, is amended by adding at the end
the following:
‘‘(d) Any provisions of this title relating to securities
contracts, commodity contracts, forward contracts, repur-
chase agreements, swap agreements, or master netting
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agreements shall apply in a case ancillary to a foreign pro-
ceeding under this section or any other section of this title,
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).’’.
(m) 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, secu-
rities clearing agencies, swap partici-
pants, repo participants, and master net-
ting 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,
or master netting agreement participant under this title
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shall not affect the priority of any unsecured claim it may
have after the exercise of such rights.’’.
(n) 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, 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.’’.
(o) SETOFF.—Section 553 of title 11, United States
Code, is amended—
(1) in subsection (a)(3)(C), by inserting ‘‘(ex-
cept for a setoff of a kind described in section
362(b)(6), 362(b)(7), 362(b)(17), 362(b)(19), 555,
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(5) in section 556, by inserting ‘‘, financial par-
ticipant’’ after ‘‘commodity broker’’.
(q) CONFORMING AMENDMENTS.—Title 11, United
States Code, is amended—
(1) in the table of sections of 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 of 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, 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, securities clearing
agencies, swap participants, repo participants, and master net-
ting agreement participants.’’.
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SEC. 1008. 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 with respect to qualified financial
contracts (including market valuations) by in-
sured depository institutions.’’.
SEC. 1009. EXEMPTIONS FROM CONTEMPORANEOUS EXE-
CUTION 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;
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‘‘(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. 1010. DAMAGE MEASURE.
(a) Title 11, United States Code, as amended by sec-
tion 1007, is amended—
(1) by inserting after section 561 the following:
‘‘§ 562. Damage measure in connection with swap
agreements, securities contracts, forward
contracts, commodity contracts, repur-
chase agreements, or master netting
agreements
‘‘If the trustee rejects a swap agreement, securities
contract as defined in section 741 of this title, forward
contract, commodity contract (as defined in section 761
of this title) repurchase agreement, or master netting
agreement pursuant to section 365(a) of this title, or if
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a forward contract merchant, stockbroker, financial insti-
tution, securities clearing agency, repo participant, finan-
cial participant, master netting agreement participant, or
swap participant liquidates, terminates, or accelerates
such contract or agreement, damages shall be measured
as of the earlier of—
‘‘(1) the date of such rejection; or
‘‘(2) the date of such liquidation, termination,
or acceleration.’’; and
(2) in the table of sections of chapter 5 by in-
serting after the item relating to section 561 the fol-
lowing:
‘‘562. Damage measure in connection with swap agreements, securities con-
tracts, 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 designating the existing text as para-
graph (1); and
(2) by adding at the end the following:
‘‘(2) A claim for damages calculated in accordance
with section 561 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.’’.
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SEC. 1011. 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
after subparagraph (B) 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
Securities Investor Protection Corporation
from the court shall operate as a stay of
any contractual rights of a creditor to liq-
uidate, terminate, or accelerate a securities
contract, commodity contract, forward con-
tract, repurchase agreement, swap agree-
ment, or master netting agreement, each
as defined in title 11, to offset or net ter-
mination values, payment amounts, or
other transfer obligations arising under or
in connection with one or more of such
contracts or agreements, or to foreclose on
any cash collateral pledged by the debtor
whether or not with respect to one or more
of such contracts or agreements.
‘‘(ii) Notwithstanding clause (i), such
application, order, or decree may operate
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as a stay of the foreclosure on 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 repurchase 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. 1012. ASSET-BACKED SECURITIZATIONS.
Section 541 of title 11, United States Code, as
amended by section 150, is amended—
(1) by redesignating paragraph (5) of sub-
section (b) as paragraph (6);
(2) by inserting after paragraph (4) of sub-
section (b) the following new paragraph:
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‘‘(5) 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
(3) 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, the most senior of which are
rated investment grade by one or more nationally
recognized securities rating organizations, issued by
an issuer;
‘‘(2) the term ‘eligible asset’ means—
‘‘(A) financial assets (including interests
therein and proceeds thereof), either fixed or re-
volving, including residential and commercial
mortgage loans, consumer receivables, trade re-
ceivables, and lease receivables, that, by their
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terms, convert into cash within a finite time pe-
riod, plus any residual interest in property sub-
ject to receivables included in such financial as-
sets plus any rights or other assets designed to
assure the servicing or timely distribution of
proceeds to security holders;
‘‘(B) cash; and
‘‘(C) securities.
‘‘(3) the term ‘eligible entity’ means—
‘‘(A) an issuer; or
‘‘(B) a trust, corporation, partnership, or
other entity engaged exclusively in the business
of acquiring and transferring eligible assets di-
rectly or indirectly to an issuer and taking ac-
tions ancillary thereto;
‘‘(4) the term ‘issuer’ means a trust, corpora-
tion, partnership, or other entity engaged exclusively
in the business of acquiring and holding eligible as-
sets, issuing securities backed by eligible assets, and
taking 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
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them from the estate of the debtor pursuant to sub-
section (b)(5), 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. 1013. FEDERAL RESERVE COLLATERAL REQUIRE-
MENTS.
The third sentence of the third undesignated para-
graph of section 16 of the Federal Reserve Act (12 U.S.C.
412) is amended by striking ‘‘acceptances acquired under
the provisions of section 13 of this Act’’ and inserting ‘‘ac-
ceptances acquired under section 10A, 10B, 13, or 13A
of this Act’’.
SEC. 1014. EFFECTIVE DATE; APPLICATION OF AMEND-
MENTS.
(a) EFFECTIVE DATE.—This title shall take effect on
the date of the enactment of this Act.
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(b) APPLICATION OF AMENDMENTS.—The amend-
ments made by this title shall apply with respect to cases
commenced or appointments made under any Federal or
State law after the date of the enactment of this Act, but
shall not apply with respect to cases commenced or ap-
pointments made under any Federal or State law before
the date of the enactment of this Act.
TITLE XI—TECHNICAL
CORRECTIONS
SEC. 1101. DEFINITIONS.
Section 101 of title 11, United States Code, as
amended by sections 102, 105, 132, 138, 301, 302, 402,
902, and 1007, is amended—
(1) by striking ‘‘In this title—’’ and inserting
‘‘In this title:’’;
(2) in each paragraph, by inserting ‘‘The term’’
after the paragraph designation;
(3) in paragraph (35)(B), by striking ‘‘para-
graphs (21B) and (33)(A)’’ and inserting ‘‘para-
graphs (23) and (35)’’;
(4) in each of paragraphs (35A) and (38), by
striking ‘‘; and’’ at the end and inserting a period;
(5) in paragraph (51B)—
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(A) by inserting ‘‘who is not a family farm-
er’’ after ‘‘debtor’’ the first place it appears;
and
(B) by striking ‘‘thereto having aggregate’’
and all that follows through the end of the
paragraph;
(6) by amending paragraph (54) to read as fol-
lows:
‘‘(54) The term ‘transfer’ means—
‘‘(A) the creation of a lien;
‘‘(B) the retention of title as a security in-
terest;
‘‘(C) the foreclosure of a debtor’s equity of
redemption; or
‘‘(D) each mode, direct or indirect, abso-
lute or conditional, voluntary or involuntary, of
disposing of or parting with—
‘‘(i) property; or
‘‘(ii) an interest in property;’’;
(7) in each of paragraphs (1) through (35), in
each of paragraphs (36) and (37), and in each of
paragraphs (40) through (55) (including paragraph
(54), as amended by paragraph (6) of this section),
by striking the semicolon at the end and inserting a
period; and
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(8) by redesignating paragraphs (4) through
(55), including paragraph (54), as amended by para-
graph (6) of this section, in entirely numerical se-
quence.
SEC. 1102. ADJUSTMENT OF DOLLAR AMOUNTS.
Section 104 of title 11, United States Code, is
amended by inserting ‘‘522(f)(3), 707(b)(5),’’ after
‘‘522(d),’’ each place it appears.
SEC. 1103. EXTENSION OF TIME.
Section 108(c)(2) of title 11, United States Code, is
amended by striking ‘‘922’’ and all that follows through
‘‘or’’, and inserting ‘‘922, 1201, or’’.
SEC. 1104. TECHNICAL AMENDMENTS.
Title 11, United States Code, is amended—
(1) in section 109(b)(2) by striking ‘‘subsection
(c) or (d) of’’; and
(2) in section 552(b)(1) by striking ‘‘product’’
each place it appears and inserting ‘‘products’’.
SEC. 1105. PENALTY FOR PERSONS WHO NEGLIGENTLY OR
FRAUDULENTLY PREPARE BANKRUPTCY PE-
TITIONS.
Section 110(j)(3) of title 11, United States Code, is
amended by striking ‘‘attorney’s’’ and inserting ‘‘attor-
neys’ ’’.
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SEC. 1106. LIMITATION ON COMPENSATION OF PROFES-
SIONAL PERSONS.
Section 328(a) of title 11, United States Code, is
amended by inserting ‘‘on a fixed or percentage fee basis,’’
after ‘‘hourly basis,’’.
SEC. 1107. SPECIAL TAX PROVISIONS.
Section 346(g)(1)(C) of title 11, United States Code,
is amended by striking ‘‘, except’’ and all that follows
through ‘‘1986’’.
SEC. 1108. EFFECT OF CONVERSION.
Section 348(f)(2) of title 11, United States Code, is
amended by inserting ‘‘of the estate’’ after ‘‘property’’ the
first place it appears.
SEC. 1109. ALLOWANCE OF ADMINISTRATIVE EXPENSES.
Section 503(b)(4) of title 11, United States Code, is
amended by inserting ‘‘subparagraph (A), (B), (C), (D),
or (E) of’’ before ‘‘paragraph (3)’’.
SEC. 1110. PRIORITIES.
Section 507(a) of title 11, United States Code, as
amended by section 323, is amended in paragraph (4), as
so redesignated by section 142, by striking the semicolon
at the end and inserting a period.
SEC. 1111. EXEMPTIONS.
Section 522(g)(2) of title 11, United States Code, is
amended by striking ‘‘subsection (f)(2)’’ and inserting
‘‘subsection (f)(1)(B)’’.
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SEC. 1112. EXCEPTIONS TO DISCHARGE.
Section 523 of title 11, United States Code, as
amended by section 146, is amended—
(1) in subsection (a)(3), by striking ‘‘or (6)’’
each place it appears and inserting ‘‘(6), or (15)’’;
(2) as amended by section 304(e) of Public Law
103–394 (108 Stat. 4133), in paragraph (15), by
transferring such paragraph so as to insert it after
paragraph (14A) of subsection (a);
(3) in subsection (a)(9), by inserting ‘‘,
watercraft, or aircraft’’ after ‘‘motor vehicle’’;
(4) in subsection (a)(15), as so redesignated by
paragraph (2) of this subsection, by inserting ‘‘to a
spouse, former spouse, or child of the debtor and’’
after ‘‘(15)’’; and
(5) in subsection (e), by striking ‘‘a insured’’
and inserting ‘‘an insured’’.
SEC. 1113. EFFECT OF DISCHARGE.
Section 524(a)(3) of title 11, United States Code, is
amended by striking ‘‘section 523’’ and all that follows
through ‘‘or that’’ and inserting ‘‘section 523, 1228(a)(1),
or 1328(a)(1) of this title, or that’’.
SEC. 1114. PROTECTION AGAINST DISCRIMINATORY TREAT-
MENT.
Section 525(c) of title 11, United States Code, is
amended—
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(1) in paragraph (1), by inserting ‘‘student’’ be-
fore ‘‘grant’’ the second place it appears; and
(2) in paragraph (2), by striking ‘‘the program
operated under part B, D, or E of’’ and inserting
‘‘any program operated under’’.
SEC. 1115. PROPERTY OF THE ESTATE.
Section 541(b)(4)(B)(ii) of title 11, United States
Code, is amended by inserting ‘‘365 or’’ before ‘‘542’’.
SEC. 1116. PREFERENCES.
(a) IN GENERAL.—Section 547 of title 11, United
States Code, is amended—
(1) in subsection (b), by striking ‘‘subsection
(c)’’ and inserting ‘‘subsections (c) and (i)’’; and
(2) by adding at the end the following:
‘‘(i) If the trustee avoids under subsection (b) a
transfer made between 90 days and 1 year before the date
of the filing of the petition, by the debtor to an entity
that is not an insider for the benefit of a creditor that
is an insider, such transfer may be avoided under this sec-
tion only with respect to the creditor that is an insider.’’.
(b) APPLICABILITY.—The amendments made by this
section shall apply to any case that is pending or com-
menced on or after the date of the enactment of this Act.
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SEC. 1117. POSTPETITION TRANSACTIONS.
Section 549(c) of title 11, United States Code, is
amended—
(1) by inserting ‘‘an interest in’’ after ‘‘transfer
of’’;
(2) by striking ‘‘such property’’ and inserting
‘‘such real property’’; and
(3) by striking ‘‘the interest’’ and inserting
‘‘such interest’’.
SEC. 1118. DISPOSITION OF PROPERTY OF THE ESTATE.
Section 726(b) of title 11, United States Code, is
amended by striking ‘‘1009,’’.
SEC. 1119. GENERAL PROVISIONS.
Section 901(a) of title 11, United States Code, is
amended by inserting ‘‘1123(d),’’ after ‘‘1123(b),’’.
SEC. 1120. APPOINTMENT OF ELECTED TRUSTEE.
Section 1104(b) of title 11, United States Code, is
amended—
(1) by inserting ‘‘(1)’’ after ‘‘(b)’’; and
(2) by adding at the end the following:
‘‘(2)(A) If an eligible, disinterested trustee is elected
at a meeting of creditors under paragraph (1), the United
States trustee shall file a report certifying that election.
Upon the filing of a report under the preceding sentence—
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‘‘(i) the trustee elected under paragraph (1)
shall be considered to have been selected and ap-
pointed for purposes of this section; and
‘‘(ii) the service of any trustee appointed under
subsection (d) shall terminate.
‘‘(B) In the case of any dispute arising out of an elec-
tion under subparagraph (A), the court shall resolve the
dispute.’’.
SEC. 1121. ABANDONMENT OF RAILROAD LINE.
Section 1170(e)(1) of title 11, United States Code,
is amended by striking ‘‘section 11347’’ and inserting
‘‘section 11326(a)’’.
SEC. 1122. CONTENTS OF PLAN.
Section 1172(c)(1) of title 11, United States Code,
is amended by striking ‘‘section 11347’’ and inserting
‘‘section 11326(a)’’.
SEC. 1123. DISCHARGE UNDER CHAPTER 12.
Subsections (a) and (c) of section 1228 of title 11,
United 
States 
Code, 
are 
amended 
by 
striking
‘‘1222(b)(10)’’ each place it appears and inserting
‘‘1222(b)(9)’’.
SEC. 1124. BANKRUPTCY CASES AND PROCEEDINGS.
Section 1334(d) of title 28, United States Code, is
amended—