I 
108TH CONGRESS 
1ST SESSION H. R. 2120
To revise the banking and bankruptcy insolvency laws with respect to the 
termination and netting of financial contracts, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 15, 2003
Mr. TOOMEY (for himself, Mr. OXLEY, Mr. KANJORSKI, Mr. LEACH, Mr. 
BAKER, Mr. BACHUS, Mr. SHERMAN, Mrs. MALONEY, Mr. SHAYS, Mrs. 
BIGGERT, Ms. HART, Mrs. KELLY, Mr. NEY, Mr. ACKERMAN, Mr. CROW-
LEY, Mr. MURPHY, Mr. SESSIONS, Mr. FOSSELLA, Mr. EMANUEL, and 
Mr. ISRAEL) introduced the following bill; which was referred to the Com-
mittee on Financial Services, and in addition to the Committee on the 
Judiciary, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned 
A BILL 
To revise the banking and bankruptcy insolvency laws with 
respect to the termination and netting of financial con-
tracts, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Financial Contracts Bankruptcy Reform Act of 2003’’.
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows:
Sec. 1. Short title; table of contents. 
Sec. 2. Treatment of certain agreements by conservators or receivers of insured 
depository institutions. 
Sec. 3. Authority of the corporation with respect to failed and failing institu-
tions. 
Sec. 4. Amendments relating to transfers of qualified financial contracts. 
Sec. 5. Amendments relating to disaffirmance or repudiation of qualified finan-
cial contracts. 
Sec. 6. Clarifying amendment relating to master agreements. 
Sec. 7. Federal Deposit Insurance Corporation Improvement Act of 1991. 
Sec. 8. Bankruptcy code amendments. 
Sec. 9. Recordkeeping requirements. 
Sec. 10. Exemptions from contemporaneous execution requirement. 
Sec. 11. Damage measure. 
Sec. 12. SIPC stay. 
Sec. 13. Applicability of other sections to chapter 9. 
Sec. 14. Effective date; application of amendments. 
Sec. 15. Savings clause.
SEC. 2. TREATMENT OF CERTAIN AGREEMENTS BY CON-
SERVATORS OR RECEIVERS OF INSURED DE-
POSITORY INSTITUTIONS. 
(a) DEFINITION
OF QUALIFIED FINANCIAL CON-
TRACT.—
(1) 
FDIC-INSURED
DEPOSITORY
INSTITU-
TIONS.—Section 11(e)(8)(D) of the Federal Deposit 
Insurance Act (12 U.S.C. 1821(e)(8)(D)) is amend-
ed— 
(A) by striking ‘‘subsection—’’ and insert-
ing ‘‘subsection, the following definitions shall 
apply:’’; and 
(B) in clause (i), by inserting ‘‘, resolution, 
or order’’ after ‘‘any similar agreement that the 
Corporation determines by regulation’’.
(2) 
INSURED
CREDIT
UNIONS.—Section 
207(c)(8)(D) of the Federal Credit Union Act (12 
U.S.C. 1787(c)(8)(D)) is amended—
(A) by striking ‘‘subsection—’’ and insert-
ing ‘‘subsection, the following definitions shall 
apply:’’; and 
(B) in clause (i), by inserting ‘‘, resolution, 
or order’’ after ‘‘any similar agreement that the 
Board determines by regulation’’. 
(b) DEFINITION OF SECURITIES CONTRACT.—
(1) 
FDIC-INSURED
DEPOSITORY
INSTITU-
TIONS.—Section 11(e)(8)(D)(ii) of the Federal De-
posit Insurance Act (12 U.S.C. 1821(e)(8)(D)(ii)) is 
amended to read as follows: 
‘‘(ii) SECURITIES
CONTRACT.—The 
term ‘securities contract’—
‘‘(I) means a contract for the 
purchase, sale, or loan of a security, a 
certificate of deposit, a mortgage loan, 
or any interest in a mortgage loan, a 
group or index of securities, certifi-
cates of deposit, or mortgage loans or 
interests therein (including any inter-
est therein or based on the value 
thereof) or any option on any of the
foregoing, including any option to 
purchase or sell any such security, 
certificate of deposit, mortgage loan, 
interest, group or index, or option, 
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) does not include any pur-
chase, sale, or repurchase obligation 
under a participation in a commercial 
mortgage loan unless the Corporation 
determines by regulation, resolution, 
or order to include any such agree-
ment within the meaning of such 
term; 
‘‘(III) means any option entered 
into on a national securities exchange 
relating to foreign currencies; 
‘‘(IV) means the guarantee by or 
to any securities clearing agency of 
any settlement of cash, securities, cer-
tificates of deposit, mortgage loans or 
interests therein, group or index of se-
curities, certificates of deposit, or 
mortgage loans or interests therein 
(including any interest therein or 
based on the value thereof) or option 
on any of the foregoing, including any 
option to purchase or sell any such se-
curity, certificate of deposit, mortgage 
loan, interest, group or index, or op-
tion; 
‘‘(V) means any margin loan; 
‘‘(VI) means any other agree-
ment or transaction that is similar to 
any agreement or transaction referred 
to in this clause; 
‘‘(VII) means any combination of 
the agreements or transactions re-
ferred to in this clause; 
‘‘(VIII) means any option to 
enter into any agreement or trans-
action referred to in this clause; 
‘‘(IX) means a master agreement 
that provides for an agreement or 
transaction referred to in subclause 
(I), (III), (IV), (V), (VI), (VII), or 
(VIII), together with all supplements
to any such master agreement, with-
out regard to whether the master 
agreement provides for an agreement 
or transaction that is not a securities 
contract under this clause, except that 
the master agreement shall be consid-
ered to be a securities contract under 
this clause only with respect to each 
agreement or transaction under the 
master agreement that is referred to 
in subclause (I), (III), (IV), (V), (VI), 
(VII), or (VIII); and 
‘‘(X) means any security agree-
ment or arrangement or other credit 
enhancement related to any agree-
ment or transaction referred to in this 
clause, including any guarantee or re-
imbursement obligation in connection 
with any agreement or transaction re-
ferred to in this clause.’’. 
(2) 
INSURED
CREDIT
UNIONS.—Section 
207(c)(8)(D)(ii) of the Federal Credit Union Act 
(12 U.S.C. 1787(c)(8)(D)(ii)) is amended to read as 
follows:
‘‘(ii) SECURITIES
CONTRACT.—The 
term ‘securities contract’—
‘‘(I) means a contract for the 
purchase, sale, or loan of a security, a 
certificate of deposit, a mortgage loan, 
or any interest in a mortgage loan, a 
group or index of securities, certifi-
cates of deposit, or mortgage loans or 
interests therein (including any inter-
est therein or based on the value 
thereof) or any option on any of the 
foregoing, including any option to 
purchase or sell any such security, 
certificate of deposit, mortgage loan, 
interest, group or index, or option, 
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) does not include any pur-
chase, sale, or repurchase obligation 
under a participation in a commercial 
mortgage loan unless the Board deter-
mines by regulation, resolution, or
order to include any such agreement 
within the meaning of such term; 
‘‘(III) means any option entered 
into on a national securities exchange 
relating to foreign currencies; 
‘‘(IV) means the guarantee by or 
to any securities clearing agency of 
any settlement of cash, securities, cer-
tificates of deposit, mortgage loans or 
interests therein, group or index of se-
curities, certificates of deposit, or 
mortgage loans or interests therein 
(including any interest therein or 
based on the value thereof) or option 
on any of the foregoing, including any 
option to purchase or sell any such se-
curity, certificate of deposit, mortgage 
loan, interest, group or index, or op-
tion; 
‘‘(V) means any margin loan; 
‘‘(VI) means any other agree-
ment or transaction that is similar to 
any agreement or transaction referred 
to in this clause;
‘‘(VII) means any combination of 
the agreements or transactions re-
ferred to in this clause; 
‘‘(VIII) means any option to 
enter into any agreement or trans-
action referred to in this clause; 
‘‘(IX) means a master agreement 
that provides for an agreement or 
transaction referred to in subclause 
(I), (III), (IV), (V), (VI), (VII), or 
(VIII), together with all supplements 
to any such master agreement, with-
out regard to whether the master 
agreement provides for an agreement 
or transaction that is not a securities 
contract under this clause, except that 
the master agreement shall be consid-
ered to be a securities contract under 
this clause only with respect to each 
agreement or transaction under the 
master agreement that is referred to 
in subclause (I), (III), (IV), (V), (VI), 
(VII), or (VIII); and 
‘‘(X) means any security agree-
ment or arrangement or other credit
enhancement related to any agree-
ment or transaction referred to in this 
clause, including any guarantee or re-
imbursement obligation in connection 
with any agreement or transaction re-
ferred to in this clause.’’. 
(c) DEFINITION OF COMMODITY CONTRACT.—
(1) 
FDIC-INSURED
DEPOSITORY
INSTITU-
TIONS.—Section 11(e)(8)(D)(iii) of the Federal De-
posit Insurance Act (12 U.S.C. 1821(e)(8)(D)(iii)) is 
amended to read as follows: 
‘‘(iii) COMMODITY
CONTRACT.—The 
term ‘commodity contract’ means—
‘‘(I) with respect to a futures 
commission merchant, a contract for 
the purchase or sale of a commodity 
for future delivery on, or subject to 
the rules of, a contract market or 
board of trade; 
‘‘(II) with respect to a foreign fu-
tures commission merchant, a foreign 
future; 
‘‘(III) with respect to a leverage 
transaction 
merchant, 
a 
leverage 
transaction;
‘‘(IV) with respect to a clearing 
organization, a contract for the pur-
chase or sale of a commodity for fu-
ture delivery on, or subject to the 
rules of, a contract market or board 
of trade that is cleared by such clear-
ing organization, or commodity option 
traded on, or subject to the rules of, 
a contract market or board of trade 
that is cleared by such clearing orga-
nization; 
‘‘(V) with respect to a commodity 
options dealer, a commodity option; 
‘‘(VI) any other agreement or 
transaction that is similar to any 
agreement or transaction referred to 
in this clause; 
‘‘(VII) any combination of the 
agreements or transactions referred to 
in this clause; 
‘‘(VIII) any option to enter into 
any agreement or transaction referred 
to in this clause; 
‘‘(IX) a master agreement that 
provides for an agreement or trans-
action referred to in subclause (I), 
(II), (III), (IV), (V), (VI), (VII), or 
(VIII), together with all supplements 
to any such master agreement, with-
out regard to whether the master 
agreement provides for an agreement 
or transaction that is not a com-
modity contract under this clause, ex-
cept that the master agreement shall 
be considered to be a commodity con-
tract under this clause only with re-
spect to each agreement or trans-
action under the master agreement 
that is referred to in subclause (I), 
(II), (III), (IV), (V), (VI), (VII), or 
(VIII); or 
‘‘(X) any security agreement or 
arrangement or other credit enhance-
ment related to any agreement or 
transaction referred to in this clause, 
including any guarantee or reimburse-
ment obligation in connection with 
any agreement or transaction referred 
to in this clause.’’.
(2) 
INSURED
CREDIT
UNIONS.—Section 
207(c)(8)(D)(iii) of the Federal Credit Union Act 
(12 U.S.C. 1787(c)(8)(D)(iii)) is amended to read as 
follows: 
‘‘(iii) COMMODITY
CONTRACT.—The 
term ‘commodity contract’ means—
‘‘(I) with respect to a futures 
commission merchant, a contract for 
the purchase or sale of a commodity 
for future delivery on, or subject to 
the rules of, a contract market or 
board of trade; 
‘‘(II) with respect to a foreign fu-
tures commission merchant, a foreign 
future; 
‘‘(III) with respect to a leverage 
transaction 
merchant, 
a 
leverage 
transaction; 
‘‘(IV) with respect to a clearing 
organization, a contract for the pur-
chase or sale of a commodity for fu-
ture delivery on, or subject to the 
rules of, a contract market or board 
of trade that is cleared by such clear-
ing organization, or commodity option
traded on, or subject to the rules of, 
a contract market or board of trade 
that is cleared by such clearing orga-
nization; 
‘‘(V) with respect to a commodity 
options dealer, a commodity option; 
‘‘(VI) any other agreement or 
transaction that is similar to any 
agreement or transaction referred to 
in this clause; 
‘‘(VII) any combination of the 
agreements or transactions referred to 
in this clause; 
‘‘(VIII) any option to enter into 
any agreement or transaction referred 
to in this clause; 
‘‘(IX) a master agreement that 
provides for an agreement or trans-
action referred to in subclause (I), 
(II), (III), (IV), (V), (VI), (VII), or 
(VIII), together with all supplements 
to any such master agreement, with-
out regard to whether the master 
agreement provides for an agreement 
or transaction that is not a com-
modity contract under this clause, ex-
cept that the master agreement shall 
be considered to be a commodity con-
tract under this clause only with re-
spect to each agreement or trans-
action under the master agreement 
that is referred to in subclause (I), 
(II), (III), (IV), (V), (VI), (VII), or 
(VIII); or 
‘‘(X) any security agreement or 
arrangement or other credit enhance-
ment related to any agreement or 
transaction referred to in this clause, 
including any guarantee or reimburse-
ment obligation in connection with 
any agreement or transaction referred 
to in this clause.’’. 
(d) DEFINITION OF FORWARD CONTRACT.—
(1) 
FDIC-INSURED
DEPOSITORY
INSTITU-
TIONS.—Section 11(e)(8)(D)(iv) of the Federal De-
posit Insurance Act (12 U.S.C. 1821(e)(8)(D)(iv)) is 
amended to read as follows: 
‘‘(iv) 
FORWARD
CONTRACT.—The 
term ‘forward contract’ means—
‘‘(I) a contract (other than a 
commodity contract) for the purchase, 
sale, or transfer of a commodity or 
any similar good, article, service, 
right, or interest which is presently or 
in the future becomes the subject of 
dealing in the forward contract trade, 
or product or byproduct thereof, with 
a maturity date more than 2 days 
after the date the contract is entered 
into, including, a repurchase trans-
action, reverse repurchase transaction, 
consignment, 
lease, 
swap, 
hedge 
transaction, deposit, loan, option, allo-
cated transaction, unallocated trans-
action, or any other similar agree-
ment; 
‘‘(II) any combination of agree-
ments or transactions referred to in 
subclauses (I) and (III); 
‘‘(III) any option to enter into 
any agreement or transaction referred 
to in subclause (I) or (II); 
‘‘(IV) a master agreement that 
provides for an agreement or trans-
action referred to in subclauses (I), 
(II), or (III), together with all supple-
ments to any such master agreement, 
without regard to whether the master 
agreement provides for an agreement 
or transaction that is not a forward 
contract under this clause, except that 
the master agreement shall be consid-
ered to be a forward contract under 
this clause only with respect to each 
agreement or transaction under the 
master agreement that is referred to 
in subclause (I), (II), or (III); or 
‘‘(V) any security agreement or 
arrangement or other credit enhance-
ment related to any agreement or 
transaction referred to in subclause 
(I), (II), (III), or (IV), including any 
guarantee or reimbursement obliga-
tion in connection with any agreement 
or transaction referred to in any such 
subclause.’’. 
(2) 
INSURED
CREDIT
UNIONS.—Section 
207(c)(8)(D)(iv) of the Federal Credit Union Act
(12 U.S.C. 1787(c)(8)(D)(iv)) is amended to read as 
follows: 
‘‘(iv) 
FORWARD
CONTRACT.—The 
term ‘forward contract’ means—
‘‘(I) a contract (other than a 
commodity contract) for the purchase, 
sale, or transfer of a commodity or 
any similar good, article, service, 
right, or interest which is presently or 
in the future becomes the subject of 
dealing in the forward contract trade, 
or product or byproduct thereof, with 
a maturity date more than 2 days 
after the date the contract is entered 
into, including, a repurchase trans-
action, reverse repurchase transaction, 
consignment, 
lease, 
swap, 
hedge 
transaction, deposit, loan, option, allo-
cated transaction, unallocated trans-
action, or any other similar agree-
ment; 
‘‘(II) any combination of agree-
ments or transactions referred to in 
subclauses (I) and (III);
‘‘(III) any option to enter into 
any agreement or transaction referred 
to in subclause (I) or (II); 
‘‘(IV) a master agreement that 
provides for an agreement or trans-
action referred to in subclauses (I), 
(II), or (III), together with all supple-
ments to any such master agreement, 
without regard to whether the master 
agreement provides for an agreement 
or transaction that is not a forward 
contract under this clause, except that 
the master agreement shall be consid-
ered to be a forward contract under 
this clause only with respect to each 
agreement or transaction under the 
master agreement that is referred to 
in subclause (I), (II), or (III); or 
‘‘(V) any security agreement or 
arrangement or other credit enhance-
ment related to any agreement or 
transaction referred to in subclause 
(I), (II), (III), or (IV), including any 
guarantee or reimbursement obliga-
tion in connection with any agreement
or transaction referred to in any such 
subclause.’’. 
(e) DEFINITION OF REPURCHASE AGREEMENT.—
(1) 
FDIC-INSURED
DEPOSITORY
INSTITU-
TIONS.—Section 11(e)(8)(D)(v) of the Federal De-
posit Insurance Act (12 U.S.C. 1821(e)(8)(D)(v)) is 
amended to read as follows: 
‘‘(v) REPURCHASE AGREEMENT.—The 
term ‘repurchase agreement’ (which defini-
tion also applies to a reverse repurchase 
agreement)—
‘‘(I) means an agreement, includ-
ing related terms, which provides for 
the transfer of one or more certifi-
cates of deposit, mortgage-related se-
curities (as such term is defined in 
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, mortgage loans, 
or interests with a simultaneous 
agreement by such transferee to 
transfer to the transferor thereof cer-
tificates of deposit, eligible bankers’ 
acceptances, 
securities, 
mortgage 
loans, or interests as described 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-
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 
‘‘(VI) means any 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), in-
cluding any guarantee or reimburse-
ment obligation in connection with 
any agreement or transaction referred 
to in any such subclause. 
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).’’. 
(2) 
INSURED
CREDIT
UNIONS.—Section 
207(c)(8)(D)(v) of the Federal Credit Union Act (12 
U.S.C. 1787(c)(8)(D)(v)) is amended to read as fol-
lows: 
‘‘(v) REPURCHASE AGREEMENT.—The 
term ‘repurchase agreement’ (which defini-
tion also applies to a reverse repurchase 
agreement)—
‘‘(I) means an agreement, includ-
ing related terms, which provides for 
the transfer of one or more certifi-
cates of deposit, mortgage-related se-
curities (as such term is defined in
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, mortgage loans, 
or interests with a simultaneous 
agreement by such transferee to 
transfer to the transferor thereof cer-
tificates of deposit, eligible bankers’ 
acceptances, 
securities, 
mortgage 
loans, or interests as described 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 Board determines by regulation, 
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 
‘‘(VI) means any 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), in-
cluding any guarantee or reimburse-
ment obligation in connection with 
any agreement or transaction referred 
to in any such subclause. 
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.—
(1) 
FDIC-INSURED
DEPOSITORY
INSTITU-
TIONS.—Section 11(e)(8)(D)(vi) of the Federal De-
posit 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, 
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 total return, 
credit spread or credit swap, option, 
future, or forward agreement; a com-
modity index or commodity swap, op-
tion, future, or forward agreement; or 
a weather swap, weather derivative, or 
weather option;
‘‘(II) any agreement or trans-
action that is similar to any other 
agreement or transaction referred to 
in this clause and that is of a type 
that has been, is presently, or in the 
future becomes, the subject of recur-
rent dealings in the swap markets (in-
cluding terms and conditions incor-
porated by reference in such agree-
ment) and that is a forward, swap, fu-
ture, or option on one or more rates, 
currencies, commodities, equity securi-
ties or other equity instruments, debt 
securities 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 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 
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 subclause 
(I), (II), (III), (IV), or (V), including 
any guarantee or reimbursement obli-
gation in connection with any agree-
ment or transaction referred to in any 
such subclause. 
Such term is applicable for purposes of 
this subsection only and shall not be con-
strued or applied so as to challenge or af-
fect the characterization, definition, or 
treatment of any swap agreement under 
any other statute, regulation, or rule, in-
cluding the Securities Act of 1933, the Se-
curities Exchange Act of 1934, the Public 
Utility Holding Company Act of 1935, the 
Trust Indenture Act of 1939, the Invest-
ment Company Act of 1940, the Invest-
ment Advisers Act of 1940, the Securities 
Investor Protection Act of 1970, the Com-
modity Exchange Act, the Gramm-Leach-
Bliley Act, and the Legal Certainty for 
Bank Products Act of 2000.’’. 
(2) 
INSURED
CREDIT
UNIONS.—Section 
207(c)(8)(D) of the Federal Credit Union Act (12 
U.S.C. 1787(c)(8)(D)) is amended by adding at the 
end the following new clause: 
‘‘(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, 
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 total return, 
credit spread or credit swap, option, 
future, or forward agreement; a com-
modity index or commodity swap, op-
tion, future, or forward agreement; or 
a weather swap, weather derivative, or 
weather option; 
‘‘(II) any agreement or trans-
action that is similar to any other 
agreement or transaction referred to
in this clause and that is of a type 
that has been, is presently, or in the 
future becomes, the subject of recur-
rent dealings in the swap markets (in-
cluding terms and conditions incor-
porated by reference in such agree-
ment) and that is a forward, swap, fu-
ture, or option on one or more rates, 
currencies, commodities, equity securi-
ties or other equity instruments, debt 
securities 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 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 
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 subclause 
(I), (II), (III), (IV), or (V), including 
any guarantee or reimbursement obli-
gation in connection with any agree-
ment or transaction referred to in any 
such subclause.
Such term is applicable for purposes of 
this subsection only and shall not be con-
strued or applied so as to challenge or af-
fect the characterization, definition, or 
treatment of any swap agreement under 
any other statute, regulation, or rule, in-
cluding the Securities Act of 1933, the Se-
curities Exchange Act of 1934, the Public 
Utility Holding Company Act of 1935, the 
Trust Indenture Act of 1939, the Invest-
ment Company Act of 1940, the Invest-
ment Advisers Act of 1940, the Securities 
Investor Protection Act of 1970, the Com-
modity Exchange Act, the Gramm-Leach-
Bliley Act, and the Legal Certainty for 
Bank Products Act of 2000.’’. 
(g) DEFINITION OF TRANSFER.—
(1) 
FDIC-INSURED
DEPOSITORY
INSTITU-
TIONS.—Section 11(e)(8)(D)(viii) of the Federal De-
posit 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 in-
stitution’s equity of redemption.’’. 
(2) 
INSURED
CREDIT
UNIONS.—Section 
207(c)(8)(D) of the Federal Credit Union Act (12 
U.S.C. 1787(c)(8)(D)) (as amended by subsection 
(f) of this section) is amended by adding at the end 
the following new clause: 
‘‘(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 in-
stitution’s equity of redemption.’’. 
(h) TREATMENT
OF QUALIFIED FINANCIAL CON-
TRACTS.—
(1) 
FDIC-INSURED
DEPOSITORY
INSTITU-
TIONS.—Section 11(e)(8) of the Federal Deposit In-
surance Act (12 U.S.C. 1821(e)(8)) is amended—
(A) in subparagraph (A)—
(i) by striking ‘‘paragraph (10)’’ and 
inserting ‘‘paragraphs (9) and (10)’’;
(ii) in clause (i), by striking ‘‘to cause 
the termination or liquidation’’ and insert-
ing ‘‘such person has to cause the termi-
nation, liquidation, or acceleration’’; and 
(iii) by striking clause (ii) and insert-
ing the following new clause: 
‘‘(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);’’; and 
(B) in subparagraph (E), by striking 
clause (ii) and inserting the following: 
‘‘(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);’’. 
(2) 
INSURED
CREDIT
UNIONS.—Section 
207(c)(8) of the Federal Credit Union Act (12 
U.S.C. 1787(c)(8)) is amended—
(A) in subparagraph (A)—
(i) by striking ‘‘paragraph (12)’’ and 
inserting ‘‘paragraphs (9) and (10)’’;
(ii) in clause (i), by striking ‘‘to cause 
the termination or liquidation’’ and insert-
ing ‘‘such person has to cause the termi-
nation, liquidation, or acceleration’’; and 
(iii) by striking clause (ii) and insert-
ing the following new clause: 
‘‘(ii) any right under any security 
agreement or arrangement or other credit 
enhancement related to 1 or more qualified 
financial contracts described in clause 
(i);’’; and 
(B) in subparagraph (E), by striking 
clause (ii) and inserting the following new 
clause: 
‘‘(ii) any right under any security 
agreement or arrangement or other credit 
enhancement related to 1 or more qualified 
financial contracts described in clause 
(i);’’. 
(i) AVOIDANCE OF TRANSFERS.—
(1) 
FDIC-INSURED
DEPOSITORY
INSTITU-
TIONS.—Section 11(e)(8)(C)(i) of the Federal De-
posit 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 or any other Federal
or State law relating to the avoidance of preferential 
or fraudulent transfers,’’ before ‘‘the Corporation’’. 
(2) 
INSURED
CREDIT
UNIONS.—Section 
207(c)(8)(C)(i) of the Federal Credit Union Act (12 
U.S.C. 1787(c)(8)(C)(i)) is amended by inserting 
‘‘section 5242 of the Revised Statutes of the United 
States or any other Federal or State law relating to 
the avoidance of preferential or fraudulent trans-
fers,’’ before ‘‘the Board’’. 
SEC. 3. AUTHORITY OF THE FDIC AND NCUAB WITH RE-
SPECT TO FAILED AND FAILING INSTITU-
TIONS. 
(a) FEDERAL DEPOSIT INSURANCE CORPORATION.—
(1) IN GENERAL.—Section 11(e)(8) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 1821(e)(8)) 
is amended—
(A) in subparagraph (E), by striking 
‘‘other than paragraph (12) of this subsection, 
subsection (d)(9)’’ and inserting ‘‘other than 
subsections (d)(9) and (e)(10)’’; and 
(B) by adding at the end the following new 
subparagraphs: 
‘‘(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. 
‘‘(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.’’. 
(2) TECHNICAL
AND
CONFORMING
AMEND-
MENT.—Section 11(e)(12)(A) of the Federal Deposit 
Insurance Act (12 U.S.C. 1821(e)(12)(A)) is amend-
ed by inserting ‘‘or the exercise of rights or powers 
by’’ after ‘‘the appointment of’’. 
(b) NATIONAL
CREDIT
UNION
ADMINISTRATION 
BOARD.—
(1) IN
GENERAL.—Section 207(c)(8) of the 
Federal Credit Union Act (12 U.S.C. 1787(c)(8)) is 
amended—
(A) in subparagraph (E) (as amended by 
section 2(h)), by striking ‘‘other than para-
graph (12) of this subsection, subsection 
(b)(9)’’ and inserting ‘‘other than subsections 
(b)(9) and (c)(10)’’; and 
(B) by adding at the end the following new 
subparagraphs: 
‘‘(F) CLARIFICATION.—No provision of law 
shall be construed as limiting the right or
power of the Board, or authorizing any court or 
agency to limit or delay, in any manner, the 
right or power of the Board to transfer any 
qualified financial contract in accordance with 
paragraphs (9) and (10) of this subsection or to 
disaffirm or repudiate any such contract in ac-
cordance with subsection (c)(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 credit union 
in default. 
‘‘(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.’’. 
(2) TECHNICAL
AND
CONFORMING
AMEND-
MENT.—Section 207(c)(12)(A) of the Federal Credit 
Union Act (12 U.S.C. 1787(c)(12)(A)) is amended 
by inserting ‘‘or the exercise of rights or powers by’’ 
after ‘‘the appointment of’’. 
SEC. 4. AMENDMENTS RELATING TO TRANSFERS OF QUALI-
FIED FINANCIAL CONTRACTS. 
(a) FDIC-INSURED DEPOSITORY INSTITUTIONS.—
(1) TRANSFERS
OF
QUALIFIED
FINANCIAL 
CONTRACTS 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: 
‘‘(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 pro-
ceeding—
‘‘(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 
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.’’. 
(2) NOTICE
TO
QUALIFIED
FINANCIAL
CON-
TRACT 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 imme-
diately following clause (ii) by striking ‘‘the conser-
vator’’ 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 ap-
pointment of the receiver in the case of a receiver-
ship, or the business day following such transfer in 
the case of a conservatorship.’’. 
(3) RIGHTS AGAINST RECEIVER AND CONSER-
VATOR AND TREATMENT OF BRIDGE BANKS.—Sec-
tion 11(e)(10) of the Federal Deposit Insurance Act 
(12 U.S.C. 1821(e)(10)) is amended—
(A) by redesignating subparagraph (B) as 
subparagraph (D); and 
(B) by inserting after subparagraph (A) 
the following 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.’’. 
(b) INSURED CREDIT UNIONS.—
(1) TRANSFERS OF QUALIFIED FINANCIAL CON-
TRACTS
TO
FINANCIAL
INSTITUTIONS.—Section 
207(c)(9) of the Federal Credit Union Act (12 
U.S.C. 1787(c)(9)) is amended to read as follows: 
‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CON-
TRACTS.—
‘‘(A) IN GENERAL.—In making any trans-
fer of assets or liabilities of a credit union in 
default which includes any qualified financial
contract, the conservator or liquidating agent 
for such credit union shall either—
‘‘(i) transfer to 1 financial institution, 
other than a financial institution for which 
a conservator, receiver, trustee in bank-
ruptcy, 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 credit 
union in default; 
‘‘(II) all claims of such person or 
any affiliate of such person against 
such credit union under any such con-
tract (other than any claim which, 
under the terms of any such contract, 
is subordinated to the claims of gen-
eral unsecured creditors of such credit 
union); 
‘‘(III) all claims of such credit 
union against such person or any af-
filiate 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 liquidating agent for the credit union 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 1 or more quali-
fied financial contracts, the contractual rights 
of the parties to such qualified financial con-
tracts, netting contracts, security agreements or 
arrangements, or other credit enhancements are 
enforceable substantially to the same extent as 
permitted under this section. 
‘‘(C) TRANSFER OF CONTRACTS SUBJECT 
TO
THE
RULES
OF
A
CLEARING
ORGANIZA-
TION.—In the event that a conservator or liqui-
dating agent transfers any qualified financial 
contract and related claims, property, and cred-
it enhancements pursuant to subparagraph 
(A)(i) and such contract is cleared by or 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) DEFINITIONS.—For purposes of this 
paragraph—
‘‘(i) the term ‘financial institution’ 
means a broker or dealer, a depository in-
stitution, a futures commission merchant, 
a credit union, or any other institution, as
determined by the Board by regulation to 
be a financial institution; and 
‘‘(ii) the term ‘clearing organization’ 
has the same meaning as in section 402 of 
the Federal Deposit Insurance Corporation 
Improvement Act of 1991.’’. 
(2) NOTICE
TO
QUALIFIED
FINANCIAL
CON-
TRACT COUNTERPARTIES.—Section 207(c)(10)(A) of 
the 
Federal 
Credit 
Union 
Act 
(12 
U.S.C. 
1787(c)(10)(A)) is amended in the material imme-
diately following clause (ii) by striking ‘‘the conser-
vator’’ and all that follows through the period and 
inserting the following: ‘‘the conservator or liqui-
dating agent 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 liquidating agent in the 
case of a liquidation, or the business day following 
such transfer in the case of a conservatorship.’’. 
(3) RIGHTS AGAINST LIQUIDATING AGENT AND 
CONSERVATOR
AND
TREATMENT
OF
BRIDGE 
BANKS.—Section 207(c)(10) of the Federal Credit 
Union Act (12 U.S.C. 1787(c)(10)) is amended—
(A) by redesignating subparagraph (B) as 
subparagraph (D); and
(B) by inserting after subparagraph (A) 
the following new subparagraphs: 
‘‘(B) CERTAIN
RIGHTS
NOT
ENFORCE-
ABLE.—
‘‘(i) LIQUIDATION.—A person who is 
a party to a qualified financial contract 
with an insured credit union may not exer-
cise any right that such person has to ter-
minate, liquidate, or net such contract 
under paragraph (8)(A) of this subsection 
or section 403 or 404 of the Federal De-
posit Insurance Corporation Improvement 
Act of 1991, solely by reason of or inci-
dental to the appointment of a liquidating 
agent for the credit union institution (or 
the insolvency or financial condition of the 
credit union for which the liquidating 
agent has been appointed)—
‘‘(I) until 5:00 p.m. (eastern 
time) on the business day following 
the date of the appointment of the liq-
uidating agent; 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 credit union may not 
exercise any right that such person has to 
terminate, liquidate, or net such contract 
under paragraph (8)(E) of this subsection 
or section 403 or 404 of the Federal De-
posit Insurance Corporation Improvement 
Act of 1991, solely by reason of or inci-
dental to the appointment of a conservator 
for the credit union or the insolvency or fi-
nancial condition of the credit union for 
which the conservator has been appointed). 
‘‘(iii) NOTICE.—For purposes of this 
paragraph, the Board as conservator or 
liquidating agent of an insured credit 
union shall be deemed to have notified a 
person who is a party to a qualified finan-
cial contract with such credit union if the 
Board has taken steps reasonably cal-
culated to provide notice to such person by 
the time specified in subparagraph (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 credit union organized by the 
Board, for which a conservator is ap-
pointed either—
‘‘(I) immediately upon the orga-
nization of the credit union; or 
‘‘(II) at the time of a purchase 
and assumption transaction between 
the credit union and the Board as re-
ceiver for a credit union in default.’’. 
SEC. 5. AMENDMENTS RELATING TO DISAFFIRMANCE OR 
REPUDIATION 
OF 
QUALIFIED 
FINANCIAL 
CONTRACTS. 
(a) FDIC-INSURED DEPOSITORY INSTITUTIONS.—
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.’’. 
(b) INSURED CREDIT UNIONS.—Section 207(c) of 
the Federal Credit Union Act (12 U.S.C. 1787(c)) is 
amended—
(1) by redesignating paragraphs (11), (12), and 
(13) as paragraphs (12), (13), and (14), respec-
tively; 
(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 liquidating agent with respect to any 
qualified financial contract to which an insured cred-
it union is a party, the conservator or liquidating 
agent for such credit union shall either—
‘‘(A) disaffirm or repudiate all qualified fi-
nancial contracts between—
‘‘(i) any person or any affiliate of 
such person; and 
‘‘(ii) the credit union in default; 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: 
‘‘(15) 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 
(a)(47) of the Securities Exchange Act of 1934), 
and the Commodity Exchange Act.’’.
SEC. 6. CLARIFYING AMENDMENT RELATING TO MASTER 
AGREEMENTS. 
(a) FDIC-INSURED DEPOSITORY INSTITUTIONS.—
Section 11(e)(8)(D)(vii) of the Federal Deposit Insurance 
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.’’. 
(b) 
INSURED
CREDIT
UNIONS.—Section 
207(c)(8)(D) of the Federal Credit Union Act (12 U.S.C.
1787(c)(8)(D)) is amended by inserting after clause (vi) 
(as added by section 2(f)) the following new clause: 
‘‘(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, paragraphs (8)(E), (8)(F), and 
(10)(B) of section 207(c) of the Federal Credit Union Act, 
or any order authorized under section 5(b)(2) of the Secu-
rities Investor Protection Act of 1970), the covered con-
tractual payment obligations and the covered contractual 
payment entitlements between any 2 financial institutions 
shall be netted in accordance with, and subject to the con-
ditions of, the terms of any applicable netting contract (ex-
cept 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 
States Code), and shall not be stayed, avoided, or other-
wise 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, paragraphs (8)(E), 
(8)(F), and (10)(B) of section 207(c) of the Federal Cred-
it Union 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 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, paragraphs (8)(E), (8)(F), and 
(10)(B) of section 207(c) of the Federal Credit Union Act, 
and any order authorized under section 5(b)(2) of the Se-
curities Investor Protection Act of 1970), the covered con-
tractual payment obligations and the covered contractual 
payment entitlements of a member of a clearing organiza-
tion to and from all other members of a clearing organiza-
tion shall be netted in accordance with and subject to the 
conditions of any applicable 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: 
‘‘(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, para-
graphs (8)(E), (8)(F), and (10)(B) of section 207(c) of 
the Federal Credit Union Act, and section 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 
financial 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;
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