[House Report 109-648]
[From the U.S. Government Publishing Office]
109th Congress Rept. 109-648
HOUSE OF REPRESENTATIVES
2d Session Part 1
======================================================================
FINANCIAL NETTING IMPROVEMENTS ACT OF 2006
_______
September 12, 2006.--Ordered to be printed
_______
Mr. Oxley, from the Committee on Financial Services, submitted the
following
R E P O R T
[To accompany H.R. 5585]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred
the bill (H.R. 5585) to improve the netting process for
financial contracts, and for other purposes, having considered
the same, report favorably thereon without amendment and
recommend that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 1
Background and Need for Legislation.............................. 2
Hearings......................................................... 2
Committee Consideration.......................................... 2
Committee Votes.................................................. 2
Committee Oversight Findings..................................... 2
Performance Goals and Objectives................................. 2
New Budget Authority, Entitlement Authority, and Tax Expenditures 3
Committee Cost Estimate.......................................... 3
Congressional Budget Office Estimate............................. 3
Federal Mandates Statement....................................... 4
Advisory Committee Statement..................................... 4
Constitutional Authority Statement............................... 4
Applicability to Legislative Branch.............................. 4
Section-by-Section Analysis of the Legislation................... 4
Changes in Existing Law Made by the Bill, as Reported............ 9
Purpose and Summary
H.R. 5585 makes technical changes to the netting and
financial contract provisions incorporated by Title IX of the
Bankruptcy Abuse Prevention and Consumer Protection Act of
2005, Pub. L. No. 109-8, to update the language to reflect
current market and regulatory practices, and help reduce
systemic risk in the financial markets by clarifying the
treatment of certain financial products in cases of bankruptcy
or insolvency.
Background and Need for Legislation
H.R. 5585 makes technical changes to the Bankruptcy Abuse
Prevention and Consumer Protection Act of 2005, Pub. L. No.
109-8, by strengthening and clarifying the enforceability of
early termination and close-out netting provisions and related
collateral arrangements in U.S. insolvency proceedings. This
bill will also help improve harmonization between U.S.
insolvency laws and other jurisdictions. The netting provisions
incorporated by Title IX of Pub. L. No. 109-8, as well as these
technical changes, reflect years of work by the President's
Working Group on Financial Markets.
Hearings
There were no hearings on H.R. 5585 in the 109th Congress.
Committee Consideration
The Committee on Financial Services met in open session on
June 14, 2006, and ordered H.R. 5585, the Financial Netting
Improvements Act of 2006, reported to the House by a voice
vote.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. No
record votes were taken during the consideration of this
legislation. A motion by Mr. Oxley to report the bill to the
House with a favorable recommendation was agreed to by a voice
vote. During the consideration of the bill, the following
amendment was offered:
An amendment by Mr. Watt, No. 1, striking section 7, had a
point of order sustained against its consideration.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee has held hearings and
made findings that are reflected in this report.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee establishes the
following performance related goals and objectives for this
legislation:
H.R. 5585 makes technical changes to the netting and
financial contract provisions incorporated by Title IX of the
Bankruptcy Abuse Prevention and Consumer Protection Act of
2005, Pub. L. No. 109-8, to update the language to reflect
current market and regulatory practices, and help reduce
systemic risk in the financial markets by clarifying the
treatment of certain financial products in cases of bankruptcy
or insolvency.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues prepared by the
Director of the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
H.R. 5585--Financial Netting Improvements Act of 2006
Summary: H.R. 5585 would amend banking, bankruptcy, and
securities laws related to the disposition of financial
contracts in the event of insolvency. In such cases, certain
types of financial contracts are processed on a net basis to
reduce the risk--especially the systemic risk associated with
activities in derivatives markets--that the failure of one
entity will disrupt and endanger financial markets. That
process, known as financial netting, involves settling mutual
obligations at their net value as opposed to each obligation's
gross dollar value. H.R. 5585 would update existing laws
regarding netting to ensure that some of the newer forms of
contractual arrangements are resolved in the same manner as
other similar contracts. The bill also would increase the
statutory filing fee paid by those filing for bankruptcy under
Chapter 7 of the bankruptcy code in order to raise the
compensation paid to private trustees appointed to manage a
debtor's estate under such bankruptcy relief.
Enacting H.R. 5585 could affect direct spending, but CBO
estimates that any such changes would not be significant. H.R.
5585 contains no intergovernmental or private-sector mandates
as defined in the Unfunded Mandates Reform Act (UMRA) and would
impose no costs on state, local, or tribal governments.
Estimated cost to the Federal Government: Most financial
experts believe that the practice of netting financial
transactions reduces the systemic risk that could result from
the failure of banks, thrifts, or credit unions that hold
derivative or other similar contracts. Thus, it is possible
that clarifying the applicability of the netting requirement to
some of the newer types of financial contracts could reduce the
potential cost of some failures in the future. Based on
information from federal regulatory agencies, CBO estimates
that the impact of H.R. 5585 on the cost or resolving failed
banks, thrifts, or credit unions would likely be small because
the provisions in current law would cover most of the contracts
used by insured institutions.
Increasing filing fees and trustee compensation under
Chapter 7 of the bankruptcy code would have no budgetary
impact. Under current law, $45 of the $245 fee paid by those
filing for Chapter 7 relief is collected by the government on
behalf of a private trustee, placed in a (nonbudgetary) deposit
account, and paid to the private trustee. Those amounts are not
owned by the Federal Government and are not recorded on the
budget. H.R. 5585 would increase the Chapter 7 filing fee by
$55 and increase the trustee's compensation by a corresponding
amount.
Intergovernmental and private-sector impact: H.R. 5585
contains no intergovernmental or private-sector mandates as
defined in UMRA and would impose no costs on state, local, or
tribal governments.
Estimate prepared by: Federal Costs: Kathleen Gramp and
Gregory Waring; Impact on state, local, and tribal governments:
Sarah Puro; Impact on the private sector: Fatimot Ladipo and
Judy Ruud.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional Authority of Congress to enact this legislation
is provided by Article 1, section 8, clause 1 (relating to the
general welfare of the United States), clause 3 (relating to
the power to regulate interstate commerce), and clause 4
(relating to the power to establish uniform laws on the subject
of Bankruptcies).
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Section 1. Short title
This section sets forth the short title of this
legislation--the ``Financial Netting Improvements Act of
2006''.
Section 2. Treatment of certain agreements by conservators or receivers
or depository institutions
This section amends the Federal Deposit Insurance Act's
(FDIA) and Federal Credit Union Act's (FCUA) definitions of
``securities contract'', ``forward contract'' and ``swap
agreement'' to make a number of technical and clarifying
changes. It is intended that the legislative history and case
law surrounding those terms, to the date of this amendment, be
incorporated into the legislative history of the FDIA and FCUA.
The definition of ``securities contract'' and ``forward
contract''
The reference to ``repurchase or reverse repurchase''
transactions in section 2(a)(1)(A)(ii) is intended to confirm
that a repurchase or reverse repurchase transaction included
within the definitions of ``securities contract'' or ``forward
contract'' is not limited by the definition of ``repurchase
agreement'' contained in 12 U.S.C. section 1821(e)(8)(D)(v).
The definition of ``securities contract''
The reference in sections 2(a)(1)(B) and 2(a)(2)(B) to
guarantees ``(including by novation)'' by or to any securities
clearing agency, together with the reference in the definition
of ``securities contract'' (as amended by Pub. L. No. 109-8) to
``any other agreement or transaction that is similar'' is
intended to confirm that the language covers other arrangements
that have an effect similar to a guarantee or a novation.
The reference in sections 2(a)(1)(E) and 2(a)(2)(E) to the
inclusion of ``any extension of credit for the clearance or
settlement of securities transactions'' is intended to confirm
that the definition encompasses credit extended for the
execution, clearance and settlement of securities transactions,
which provide important liquidity to the securities markets.
Also, the inclusion of ``any loan transaction coupled with a
securities collar transaction, any prepaid securities forward
transaction, or any total return swap transaction coupled with
a securities sale transaction'' is intended to confirm that
similar agreements covered by the definition of securities
contract include these transactionswhich are functionally
similar to other enumerated transactions in the definition, even though
their form might differ. The common thread of these transactions is
that they involve financial intermediaries--stockbrokers, financial
institutions, financial participants or securities clearing agencies--
that often hedge their risk on these transactions through other market
transactions, repledge securities collateral received under these
transactions, or both. As such these transactions implicate the
systemic risk concerns that are addressed by the safe harbors.
The definition of ``swap agreement''
Section 2(c) amends the definition of ``swap agreement'' to
include ``weather swap, option, future, or forward agreement;
an emissions swap, option, future, or forward agreement; or an
inflation swap, option, future, or forward agreement.'' The
inclusion of ``weather swap, option, future, or forward
agreement; an emissions swap, option, future, or forward
agreement; or an inflation swap, option, future, or forward
agreement'' is intended to confirm that ``similar agreements''
covered by the definition of ``swap agreement'' include these
transactions.
Section 2(c) expands the definition of ``swap agreement''
to include ``any agreement or transaction that is similar to
any other agreement or transaction referred to in [section
11(e)(8)(D)(vi) of the FDIA/section 207(c)(8)(D)(vi) of the
FCUA] and is of a type that has been, is presently, or in the
future becomes, the subject of recurrent dealings in the swap
or other derivatives markets * * * and that is a forward, swap,
future, option, or spot transaction on one or more rates,
currencies, commodities, equity securities or other equity
instruments, debt securities or other debt instruments,
quantitative measures associated with an occurrence, extent of
an occurrence, or contingency associated with a financial,
commercial, or economic consequence, or economic or financial
indices or measures of economic or financial risk or value.''
The proposed amendments would change the reference to ``swap
markets'' to ``swap or other derivatives markets'' in order to
avoid any suggestion that new developments are limited to
transactions that are technically swaps as opposed to other
types of derivatives, such as options. The addition of ``or
spot transaction'' in the provision regarding ``similar
agreements'' is a technical correction intended to refer to
spot transactions that are similar to the spot transactions
already enumerated in the definition of ``swap agreement.''
However, the reference in the definition of ``swap agreement''
to spot transactions in commodities is not intended to
encompass ordinary sales of goods contracts, but rather
financial market transactions in commodities.
The term ``swap agreement'' includes transactions
documented as ``contracts for differences,'' which is another
way to document the enumerated transactions.
Section 3. Clarifying amendments relating to definition of person
This section expands the FDIA's and FCUA's definition of
``person'' for purposes of determining who is eligible for
termination, netting and close out rights in the event of
insolvency. The revised definition would include any
governmental entity in addition to any entity included in the
definition of ``person'' under Section 1 of Title 1 of the
United States Code.
Section 4. Federal Deposit Insurance Corporation Improvement Act of
1991
This section amends sections 403 and 404 of the Federal
Deposit Insurance Corporation Improvement Act of 1991 to
clarify that both financial institutions and clearing
organizations are subject to the limitations of the entire
section 11(e) of the FDIA and section 207 of FCUA.
Section 5. Conforming amendments
This section amends the Federal Bankruptcy Code's
definitions of ``swap agreement'', ``forward contract'' and
``securities contract'' to make a number of technical and
clarifying changes. This section also makes certain changes to
the automatic stay provisions of the Bankruptcy Code and to the
avoidance powers of a trustee under the Bankruptcy Code. This
section also amends the Securities Investor Protection Act and
amends the savings clause included in Pub. L. No. 109-8.
The definition of ``swap agreement''
Section 5(a)(1)(D) amends the definition of ``swap
agreement'' to include a weather swap, option, future, or
forward agreement; an emissions swap, option, future, or
forward agreement; or an inflation swap, option, future, or
forward agreement. The inclusion of ``weather swap, option,
future, or forward agreement; an emissions swap, option,
future, or forward agreement; or an inflation swap, option,
future, or forward agreement'' is intended to confirm that
``similar agreements'' covered by the definition of ``swap
agreement'' include these transactions.
Section 5(a)(1)(D) expands the definition of ``swap
agreement'' to include ``any agreement or transaction that is
similar to any other agreement or transaction referred to in
[section 101(53B) of the Bankruptcy Code] and that is of a type
that has been, is presently, or in the future becomes, the
subject of recurrent dealings in the swap or other derivatives
markets * * * and is a forward, swap, future, option, or spot
transaction on one or more rates, currencies, commodities,
equity securities or other equity instruments, debt securities
or other debt instruments, quantitative measures associated
with an occurrence, extent of an occurrence, or contingency
associated with a financial, commercial, or economic
consequence, or economic or financial indices or measures of
economic or financial risk or value.'' The proposed amendments
would change the reference to ``swap markets'' to ``swap or
other derivatives markets'' in order to avoid any suggestion
that new developments are limited to transactions that are
technically swaps as opposed to other types of derivatives,
such as options. The addition of ``or spot transaction'' in the
provision regarding ``similar agreements'' is a technical
correction intended to refer to spot transactions that are
similar to the spot transactions already enumerated in the
definition of ``swap agreement.'' However, the reference in the
definition of ``swap agreement'' to spot transactions in
commodities is not intended to encompass ordinary sales of
goods contracts, but rather financial market transactions in
commodities.
The term ``swap agreement'' includes transactions
documented as ``contracts for differences,'' which is another
way to document the enumerated transactions.
The automatic stay
Section 5(a)(2) amends section 362(b) of the Bankruptcy
Code to protect enforcement, free from the automatic stay, of
collateral, setoff or netting provisions in commodity
contracts, forward contracts, securities contracts, repurchase
agreements or swap agreements and in master netting agreements
and security agreements or arrangements or other credit
enhancements related to one or more swap agreements or master
netting agreements. These changes conform the provisions of the
Bankruptcy Code to the parallel provisions of the FDIA and FCUA
to confirm that Sections 362(b)(6), (7) and (17) protect, free
from the automatic stay, all rights previously protected by
Sections 362(b)(6), (7) and (17), including self-help
foreclosure-on-collateral rights, setoff rights and netting
rights (including foreclosure on, and setoff against, cash and
securities held to margin or secure claims for margin payments
and settlement payments, title transfer arrangements and the
right to offset obligations owed against collateral pledged to
the debtor). The provisions protect the exercise of
``contractual rights'' as defined in Sections 555, 556, 559, or
560, as appropriate, which include not only rights evidenced by
agreements between the parties, but other rights as set forth
in those definitions.
The definition of ``securities contract''
The reference in section 5(a)(3)(B) to guarantees
``(including by novation)'' by or to any securities clearing
agency, together with the reference in the definition of
``securities contract'' (as amended by Pub. L. No. 109-8) to
``any other agreement or transaction that is similar,'' is
intended to confirm that the language covers other arrangements
that have an effect similar to a guarantee or a novation.
Under section 5(a)(3)(E), the inclusion of ``any extension
of credit for the clearance or settlement of securities
transactions'' is intended to confirm that the definition
encompasses credit extended for the execution, clearance and
settlement of securities transactions, which provide important
liquidity to the securities markets. Also, the inclusion of
``any loan transaction coupled with a securities collar
transaction, any prepaid securities forward transaction, or any
total return swap transaction coupled with a securities sale
transaction'' is intended to confirm that transactions which
are functionally similar to other enumerated transactions in
the definition are covered by the definition of ``securities
contract'', even though their form might differ.The common
thread of these transactions is that they involve financial
intermediaries--stockbrokers, financial institutions, financial
participants or securities clearing agencies--that often hedge their
risk on these transactions through other market transactions, repledge
securities collateral received under these transactions, or both.
Trustee avoidance powers
Section 5(b) amends Sections 546(e) and 546(f) of the
Bankruptcy Code, which protect margin payments and settlement
payments, to also protect transfers made by or to a commodity
broker, forward contract merchant, stockbroker, financial
institution, financial participant, securities clearing agency,
or repo participant, in connection with a securities contract,
commodity contract, forward contract, or repurchase agreement.
This amendment conforms the language of Sections 546(e) and
546(f) to the language in 546(g), regarding the protection of
transfers in connection with swap agreements.
Section 6. Walkaway clauses
Section 5 amends the ``walkaway clause'' provision of the
FDIA (Section 11(e)(8)(G) of the FDIA) and the FCUA (Section
207(c)(8)(G)), both of which were added by Title IX of S. 256,
to clarify the ability of the receiver, to enforce contracts.
Section 7. Bankruptcy trustee compensation
Section 7 amends titles 11 and 28 of the United States Code
to increase the compensation paid to a case trustee for
administering a chapter 7 bankruptcy case from $60 to $100.
Under current law, the trustee's $60 fee is paid out of the
statutory and miscellaneous fees that a debtor must pay to
commence a chapter 7 bankruptcy case, which currently total
$299. The provision effectuates the increase by: (1)
reclassifying the trustee's compensation to be entirely derived
from the statutory filing fee; (2) increasing the statutory
filing fee by $40; and (3) adjusting the percentage of the
statutory filing fee allocated to the United States Trustee
System Fund and the fund established pursuant to 28 U.S.C.
Sec. 1931 to ensure that the respective amounts these funds and
the Treasury receive remain the same. In addition, section 7
deletes section 10101(a)(2) of the Deficit Reduction Act of
2005, Pub. L. No. 109-171, which was intended to increase the
statutory chapter 11 filing fee, but was incorrectly drafted.
In recognition of the fact that the statutory filing fees
have been raised recently on two prior occasions, the Committee
on the Judiciary urges the Judicial Conference of the United
States to be sensitive to the impact these increases have on
chapter 7 debtors should the Conference consider prescribing
additional fees pursuant to 28 U.S.C. Sec. 1930(b).
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
FEDERAL DEPOSIT INSURANCE ACT
* * * * * * *
Sec. 11. (a) * * *
* * * * * * *
(e) Provisions Relating to Contracts Entered Into Before
Appointment of Conservator or Receiver.--
(1) * * *
* * * * * * *
(8) Certain qualified financial contracts.--
(A) * * *
* * * * * * *
(D) Certain contracts and agreements
defined.--For purposes of this subsection, the
following definitions shall apply:
(i) * * *
(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, certificates of
deposit, or mortgage loans or
interests therein (including
any interest 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 reverse
repurchase transaction on any
such security, certificate of
deposit, mortgage loan,
interest, group or index, or
option (whether or not such
repurchase or reverse
repurchase transaction is a
``repurchase agreement'', as
defined in clause (v));
* * * * * * *
(IV) means the guarantee
(including by novation) by or
to any securities clearing
agency of any settlement of
cash, securities, certificates
of deposit, mortgage loans or
interests therein, group or
index of securities,
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 security, certificate of
deposit, mortgage loan,
interest, group or index, or
option (whether or not such
settlement is in connection
with any agreement or
transaction referred to in
subclauses (I) through (XII)
(other than subclause (II));
* * * * * * *
(VI) means any extension of
credit for the clearance or
settlement of securities
transactions;
(VII) means any loan
transaction coupled with a
securities collar transaction,
any prepaid securities forward
transaction, or any total
return swap transaction coupled
with a securities sale
transaction;
[(VI)] (VIII) means any other
agreement or transaction that
is similar to any agreement or
transaction referred to in this
clause;
[(VII)] (IX) means any
combination of the agreements
or transactions referred to in
this clause;
[(VIII)] (X) means any option
to enter into any agreement or
transaction referred to in this
clause;
[(IX)] (XI) means a master
agreement that provides for an
agreement or transaction
referred to in subclause (I),
(III), (IV), (V), (VI), (VII),
[or (VIII)] (VIII), (IX), or
(X), 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
securities contract under this
clause, except that the master
agreement shall be considered
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)]
(VIII), (IX), or (X); and
[(X)] (XII) means any
security agreement or
arrangement or other credit
enhancement related to any
agreement or transaction
referred to in this clause,
including any guarantee or
reimbursement obligation in
connection with any agreement
or transaction referred to in
this clause.
* * * * * * *
(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
[transaction, reverse
repurchase transaction] or
reverse repurchase transaction
(whether or not such repurchase
or reverse repurchase
transaction is a ``repurchase
agreement'', as defined in
clause (v)), consignment,
lease, swap, hedge transaction,
deposit, loan, option,
allocated transaction,
unallocated transaction, or any
other similar agreement;
* * * * * * *
(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,
including a rate floor, rate
cap, rate collar, cross-
currency rate swap, and basis
swap; a spot, same day-
tomorrow, tomorrow-next,
forward, or other foreign
exchange [or precious metals,
precious metals, or other
commodity agreement; a currency
swap, option, future, or
forward agreement; an equity
index or equity swap, option,
future, 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 commodity index or
commodity swap, option, future,
or forward agreement; [or a
weather swap, weather
derivative, or weather option]
weather swap, option, future,
or forward agreement; an
emissions swap, option, future,
or forward agreement; or an
inflation swap, option, future,
or forward agreement;
(II) any agreement or
transaction 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 recurrent dealings
in the swap or other
derivatives markets (including
terms and conditions
incorporated by reference in
such agreement) and that is a
forward, swap, [future, or
option] future, option, or spot
transaction on one or more
rates, currencies, commodities,
equity securities or other
equity instruments, debt
securities or other debt
instruments, quantitative
measures associated with an
occurrence, extent of an
occurrence, or contingency
associated with a financial,
commercial, or economic
consequence, or economic or
financial indices or measures
of economic or financial risk
or value;
* * * * * * *
Such term is applicable for purposes of
this subsection only and shall not be
construed or applied so as to challenge
or affect the characterization,
definition, or treatment of any swap
agreement under any other statute,
regulation, or rule, including [the
Securities 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, the
Gramm-Leach-Bliley Act, and the Legal
Certainty for Bank Products Act of
2000] the Gramm-Leach-Bliley Act, the
Legal Certainty for Bank Products Act
of 2000, the securities laws (as such
term is defined in section 3(a)(47) of
the Securities Exchange Act of 1934)
and the Commodity Exchange Act.
* * * * * * *
(ix) Person.--The term ``person''
includes any governmental entity in
addition to any entity included in the
definition of such term in section 1 of
title 1, United States Code.
* * * * * * *
(G) Walkaway clauses not effective.--
(i) * * *
[(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 parties in accordance
with its terms upon termination,
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.]
(ii) Limited suspension of certain
obligations.--In the case of a
qualified financial contract referred
to in clause (i), any payment or
delivery obligations otherwise due from
a party pursuant to the qualified
financial contract shall be suspended
from the time the receiver is appointed
until the earlier of--
(I) the time such party
receives notice that such
contract has been transferred
pursuant to subparagraph (A);
or
(II) 5:00 p.m. (eastern time)
on the business day following
the date of the appointment of
the receiver.
(iii) Walkaway clause defined.--For
purposes of this subparagraph, the term
``walkaway clause'' means any provision
in a qualified financial contract that
suspends, conditions, or extinguishes a
payment obligation of a party, in whole
or in part, or does not create a
payment obligation of a party that
would otherwise exist, solely because
of such party's status as a
nondefaulting party in connection with
the insolvency of an insured depository
institution that is a party to the
contract or the appointment of or the
exercise of rights or powers by a
conservator or receiver of such
depository institution, and not as a
result of a party's exercise of any
right to offset, setoff, or net
obligations that exist under the
contract, any other contract between
those parties, or applicable law.
* * * * * * *
----------
SECTION 207 OF THE FEDERAL CREDIT UNION ACT
payment of insurance
Sec. 207. (a) * * *
* * * * * * *
(c) Provisions Relating to Contracts Entered Into Before
Appointment of Conservator or Liquidating Agent.--
(1) * * *
* * * * * * *
(8) Certain qualified financial contracts.--
(A) * * *
* * * * * * *
(D) Certain contracts and agreements
defined.--For purposes of this subsection, the
following definitions shall apply:
(i) * * *
(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, certificates of
deposit, or mortgage loans or
interests therein (including
any interest 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 reverse
repurchase transaction on any
such security, certificate of
deposit, mortgage loan,
interest, group or index, or
option (whether or not such
repurchase or reverse
repurchase transaction is a
``repurchase agreement'', as
defined in clause (v));
* * * * * * *
(IV) means the guarantee
(including by novation) by or
to any securities clearing
agency of any settlement of
cash, securities, certificates
of deposit, mortgage loans or
interests therein, group or
index of securities,
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 security, certificate of
deposit, mortgage loan,
interest, group or index, or
option (whether or not such
settlement is in connection
with any agreement or
transaction referred to in
subclauses (I) through (XII)
(other than subclause (II));
* * * * * * *
(VI) means any extension of
credit for the clearance or
settlement of securities
transactions;
(VII) means any loan
transaction coupled with a
securities collar transaction,
any prepaid securities forward
transaction, or any total
return swap transaction coupled
with a securities sale
transaction;
[(VI)] (VIII) means any other
agreement or transaction that
is similar to any agreement or
transaction referred to in this
clause;
[(VII)] (IX) means any
combination of the agreements
or transactions referred to in
this clause;
[(VIII)] (X) means any option
to enter into any agreement or
transaction referred to in this
clause;
[(IX)] (XI) means a master
agreement that provides for an
agreement or transaction
referred to in subclause (I),
(III), (IV), (V), (VI), (VII),
[or (VIII)] (VIII), (IX), or
(X), 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
securities contract under this
clause, except that the master
agreement shall be considered
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)]
(VIII), (IX), or (X); and
[(X)] (XII) means any
security agreement or
arrangement or other credit
enhancement related to any
agreement or transaction
referred to in this clause,
including any guarantee or
reimbursement obligation in
connection with any agreement
or transaction referred to in
this clause.
* * * * * * *
(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
[transaction, reverse
repurchase transaction] or
reverse repurchase transaction
(whether or not such repurchase
or reverse repurchase
transaction is a ``repurchase
agreement'', as defined in
clause (v)), consignment,
lease, swap, hedge transaction,
deposit, loan, option,
allocated transaction,
unallocated transaction, or any
other similar agreement;
* * * * * * *
(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,
including a rate floor, rate
cap, rate collar, cross-
currency rate swap, and basis
swap; a spot, same day-
tomorrow, tomorrow-next,
forward, or other foreign
exchange [or precious metals],
precious metals, or other
commodity agreement; a currency
swap, option, future, or
forward agreement; an equity
index or equity swap, option,
future, 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 commodity index or
commodity swap, option, future,
or forward agreement; [or a
weather swap, weather
derivative, or weather option]
weather swap, option, future,
or forward agreement; an
emissions swap, option, future,
or forward agreement; or an
inflation swap, option, future,
or forward agreement;
(II) any agreement or
transaction 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 recurrent dealings
in the swap or other
derivatives markets (including
terms and conditions
incorporated by reference in
such agreement) and that is a
forward, swap, [future, or
option] future, option, or spot
transaction on one or more
rates, currencies, commodities,
equity securities or other
equity instruments, debt
securities or other debt
instruments, quantitative
measures associated with an
occurrence, extent of an
occurrence, or contingency
associated with a financial,
commercial, or economic
consequence, or economic or
financial indices or measures
of economic or financial risk
or value;
* * * * * * *
Such term is applicable for purposes of
this subsection only and shall not be
construed or applied so as to challenge
or affect the characterization,
definition, or treatment of any swap
agreement under any other statute,
regulation, or rule, including [the
Securities 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, the
Gramm-Leach-Bliley Act, and the Legal
Certainty for Bank Products Act of
2000] the Gramm-Leach-Bliley Act, the
Legal Certainty for Bank Products Act
of 2000, the securities laws (as such
term is defined in section 3(a)(47) of
the Securities Exchange Act of 1934)
and the Commodity Exchange Act.
* * * * * * *
(ix) Person.--The term ``person''
includes any governmental entity in
addition to any entity included in the
definition of such term in section 1 of
title 1, United States Code.
* * * * * * *
(G) Walkaway clauses not effective.--
(i) * * *
[(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 parties in accordance
with its terms upon termination,
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.]
(ii) Limited suspension of certain
obligations.--In the case of a
qualified financial contract referred
to in clause (i), any payment or
delivery obligations otherwise due from
a party pursuant to the qualified
financial contract shall be suspended
from the time the liquidating agent is
appointed until the earlier of--
(I) the time such party
receives notice that such
contract has been transferred
pursuant to subparagraph (A);
or
(II) 5:00 p.m. (eastern time)
on the business day following
the date of the appointment of
the liquidating agent.
(iii) Walkaway clause defined.--For
purposes of this subparagraph, the term
``walkaway clause'' means any provision
in a qualified financial contract that
suspends, conditions, or extinguishes a
payment obligation of a party, in whole
or in part, or does not create a
payment obligation of a party that
would otherwise exist, solely because
of such party's status as a
nondefaulting party in connection with
the insolvency of an insured credit
union or the appointment of or the
exercise of rights or powers by a
conservator or liquidating agent of
such credit union, and not as a result
of a party's exercise of any right to
offset, setoff, or net obligations that
exist under the contract, any other
contract between those parties, or
applicable law.
* * * * * * *
----------
FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991
* * * * * * *
TITLE IV--MISCELLANEOUS PROVISIONS
Subtitle A--Payment System Risk Reduction
CHAPTER 1--BILATERAL AND CLEARING ORGANIZATION NETTING
* * * * * * *
SEC. 403. BILATERAL NETTING.
(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 Securities Investor Protection Act of
1970), the covered contractual payment obligations and the
covered contractual payment entitlements between any 2
financial institutions shall be terminated, liquidated,
accelerated, and netted in accordance with, and subject to the
conditions of, the terms of any applicable netting contract
(except as provided in section 561(b)(2) of title 11, United
States Code).
* * * * * * *
(f) Enforceability of Security Agreements.--The provisions of
any security agreement or arrangement or other credit
enhancement related to one or more netting contracts between
any 2 financial institutions 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] 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 section 5(b)(2) of the Securities Investor
Protection Act of 1970).
SEC. 404. CLEARING ORGANIZATION NETTING.
(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 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 terminated, liquidated,
accelerated, and 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).
* * * * * * *
(h) Enforceability of Security Agreements.--The provisions of
any security agreement or arrangement or other credit
enhancement related to one or more netting contracts between
any 2 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]
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 section 5(b)(2) of the Securities
Investor Protection Act of 1970).
* * * * * * *
----------
TITLE 11, UNITED STATES CODE
* * * * * * *
CHAPTER 1--GENERAL PROVISIONS
* * * * * * *
Sec. 101. Definitions
In this title the following definitions shall apply:
(1) * * *
* * * * * * *
(22) The term ``financial institution'' means--
(A) a Federal reserve bank, or an entity
[(domestic or foreign)] that is a commercial or
savings bank, industrial savings bank, savings
and loan association, trust company, federally-
insured credit union, or receiver, liquidating
agent, or conservator for such entity and, when
any such Federal reserve bank, receiver,
liquidating agent, conservator or entity is
acting as agent or custodian for a customer
(whether or not a ``customer'', as defined in
section 741) in connection with a securities
contract (as defined in section 741) such
customer; or
* * * * * * *
(22A) The term ``financial participant'' means--
(A) an entity that, at the time it enters
into a securities contract, commodity contract,
swap agreement, repurchase agreement, or
forward contract, or at the time of the date of
the filing of the petition, has one or more
agreements or transactions described in
paragraph (1), (2), (3), (4), (5), or (6) of
section 561(a) with the debtor or any other
entity (other than an affiliate) of a total
gross dollar value of not less than
$1,000,000,000 in notional or actual principal
amount outstanding [on any day during the
previous 15-month period](aggregated across
counterparties) at such time or on any day
during the 15-month period preceding the date
of the filing of the petition, or has gross
mark-to-market positions of not less than
$100,000,000 (aggregated across counterparties)
in one or more such agreements or transactions
with the debtor or any other entity (other than
an affiliate) [on any day during the previous
15-month period] at such time or on any day
during the 15-month period preceding the date
of the filing of the petition; or
* * * * * * *
(25) The term ``forward contract'' means--
(A) a contract (other than a commodity
contract, as defined in section 761) for the
purchase, sale, or transfer of a commodity, as
defined in section 761(8) of this title, 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 two
days after the date the contract is entered
into, including, but not limited to, a
[repurchase transaction, reverse repurchase
transaction,] repurchase or reverse repurchase
transaction (whether or not such repurchase or
reverse repurchase transaction is a
``repurchase agreement'', as defined in this
section) consignment, lease, swap, hedge
transaction, deposit, loan, option, allocated
transaction, unallocated transaction, or any
other similar agreement;
* * * * * * *
(53B) The term ``swap agreement''--
(A) means--
(i) any agreement, including the
terms and conditions incorporated by
reference in such agreement, which is--
(I) * * *
* * * * * * *
(II) a spot, same day-
tomorrow, tomorrow-next,
forward, or other foreign
exchange [or precious metals],
precious metals, or other
commodity agreement;
* * * * * * *
(VII) a commodity index or a
commodity swap, option, future,
or forward agreement; [or]
(VIII) a weather swap,
[weather derivative, or weather
option] option, future, or
forward agreement;
(IX) an emissions swap,
option, future, or forward
agreement; or
(X) an inflation swap,
option, future, or forward
agreement;
(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
or other derivatives markets
(including terms and conditions
incorporated by reference
therein); and
(II) is a forward, swap,
[future, or option] future,
option, or spot transaction on
one or more rates, currencies,
commodities, equity securities,
or other equity instruments,
debt securities or other debt
instruments, quantitative
measures associated with an
occurrence, extent of an
occurrence, or contingency
associated with a financial,
commercial, or economic
consequence, or economic or
financial indices or measures
of economic or financial risk
or value;
* * * * * * *
(B) is applicable for purposes of this title
only, and shall not be construed or applied so
as to challenge or affect the characterization,
definition, or treatment of any swap agreement
under any other statute, regulation, or rule,
including [the Securities 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, the Gramm-
Leach-Bliley Act, and the Legal Certainty for
Bank Products Act of 2000] the Gramm-Leach-
Bliley Act, the Legal Certainty for Bank
Products Act of 2000, the securities laws (as
such term is defined in section 3(a)(47) of the
Securities Exchange Act of 1934) and the
Commodity Exchange Act.
* * * * * * *
CHAPTER 3--CASE ADMINISTRATION
* * * * * * *
SUBCHAPTER II--OFFICERS
* * * * * * *
Sec. 330. Compensation of officers
(a) * * *
(b)[(1)] There shall be paid from the filing fee in a case
under chapter 7 of this title [$45] $100 to the trustee serving
in such case, after such trustee's services are rendered.
[(2) The Judicial Conference of the United States--
[(A) shall prescribe additional fees of the same kind
as prescribed under section 1914(b) of title 28; and
[(B) may prescribe notice of appearance fees and fees
charged against distributions in cases under this
title;
to pay $15 to trustees serving in cases after such trustees'
services are rendered. Beginning 1 year after the date of the
enactment of the Bankruptcy Reform Act of 1994, such $15 shall
be paid in addition to the amount paid under paragraph (1).]
* * * * * * *
SUBCHAPTER IV--ADMINISTRATIVE POWERS
* * * * * * *
Sec. 362. Automatic stay
(a) * * *
(b) The filing of a petition under section 301, 302, or 303
of this title, or of an application under section 5(a)(3) of
the Securities Investor Protection Act of 1970, does not
operate as a stay--
(1) * * *
* * * * * * *
[(6) under subsection (a) of this section, of the
setoff by a commodity broker, forward contract
merchant, stockbroker, financial institution, financial
participant, or securities clearing agency of any
mutual debt and claim under or in connection with
commodity contracts, as defined in section 761 of this
title, forward contracts, or securities contracts, as
defined in section 741 of this title, that constitutes
the setoff of a claim against the debtor for a margin
payment, as defined in section 101, 741, or 761 of this
title, or settlement payment, as defined in section 101
or 741 of this title, arising out of commodity
contracts, forward contracts, or securities contracts
against cash, securities, or other property held by,
pledged to, under the control of, or due from such
commodity broker, forward contract merchant,
stockbroker, financial institution, financial
participant, or securities clearing agency to margin,
guarantee, secure, or settle commodity contracts,
forward contracts, or securities contracts;
[(7) under subsection (a) of this section, of the
setoff by a repo participant or financial participant,
of any mutual debt and claim under or in connection
with repurchase agreements that constitutes the setoff
of a claim against the debtor for a margin payment, as
defined in section 741 or 761 of this title, or
settlement payment, as defined in section 741 of this
title, arising out of repurchase agreements against
cash, securities, or other property held by, pledged
to, under the control of, or due from such repo
participant or financial participant to margin,
guarantee, secure or settle repurchase agreements;]
(6) under subsection (a) of this section, of the
exercise by a commodity broker, forward contract
merchant, stockbroker,financial institution, financial
participant, or securities clearing agency of any contractual right (as
defined in section 555 or 556) under any security agreement or
arrangement or other credit enhancement forming a part of or related to
any commodity contract, forward contract or securities contract, or of
any contractual right (as defined in section 555 or 556) to offset or
net out any termination value, payment amount, or other transfer
obligation arising under or in connection with 1 or more such
contracts, including any master agreement for such contracts;
(7) under subsection (a) of this section, of the
exercise by a repo participant or financial participant
of any contractual right (as defined in section 559)
under any security agreement or arrangement or other
credit enhancement forming a part of or related to any
repurchase agreement, or of any contractual right (as
defined in section 559) to offset or net out any
termination value, payment amount, or other transfer
obligation arising under or in connection with 1 or
more such agreements, including any master agreement
for such agreements;
* * * * * * *
[(17) under subsection (a), of the setoff by a swap
participant or financial participant of a mutual debt
and claim under or in connection with one or more swap
agreements that constitutes the setoff of a claim
against the debtor for any payment or other transfer of
property due from the debtor under or in connection
with any swap agreement against any payment due to the
debtor from the swap participant or financial
participant under or in connection with any swap
agreement or against cash, securities, or other
property held by, pledged to, under the control of, or
due from such swap participant or financial participant
to margin, guarantee, secure, or settle any swap
agreement;]
(17) under subsection (a) of this section, of the
exercise by a swap participant or financial participant
of any contractual right (as defined in section 560)
under any security agreement or arrangement or other
credit enhancement forming a part of or related to any
swap agreement, or of any contractual right (as defined
in section 560) to offset or net out any termination
value, payment amount, or other transfer obligation
arising under or in connection with 1 or more such
agreements, including any master agreement for such
agreements;
* * * * * * *
[(27) 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 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 such agreements or any contract or
agreement subject to such agreements against any
payment due to the debtor from such master netting
agreement participant under or in connection with such
agreements or any contract or agreement subject to such
agreements or against cash,securities, or other
property held by, pledged to, under the control of, or due from such
master netting agreement participant to margin, guarantee, secure, or
settle such agreements or any contract or agreement subject to such
agreements, to the extent that such participant is eligible to exercise
such offset rights under paragraph (6), (7), or (17) for each
individual contract covered by the master netting agreement in issue;
and]
(27) under subsection (a) of this section, of the
exercise by a master netting agreement participant of
any contractual right (as defined in section 555, 556,
559, or 560) under any security agreement or
arrangement or other credit enhancement forming a part
of or related to any master netting agreement, or of
any contractual right (as defined in section 555, 556,
559, or 560) to offset or net out any termination
value, payment amount, or other transfer obligation
arising under or in connection with 1 or more such
master netting agreements to the extent that such
participant is eligible to exercise such rights under
paragraph (6), (7), or (17) for each individual
contract covered by the master netting agreement in
issue; and
* * * * * * *
CHAPTER 5--CREDITORS, THE DEBTOR, AND THE ESTATE
SUBCHAPTER III--THE ESTATE
* * * * * * *
Sec. 546. Limitations on avoiding powers
(a) * * *
* * * * * * *
(e) Notwithstanding sections 544, 545, 547, 548(a)(1)(B),
and 548(b) of this title, the trustee may not avoid a transfer
that is a margin payment, as defined in section 101, 741, or
761 of this title, or settlement payment, as defined in section
101 or 741 of this title, made by or to (or for the benefit of)
a commodity broker, forward contract merchant, stockbroker,
financial institution, financial participant, or securities
clearing agency, or that is a transfer made by or to (or for
the benefit of) a commodity broker, forward contract merchant,
stockbroker, financial institution, financial participant, or
securities clearing agency, in connection with a securities
contract, as defined in section 741(7), commodity contract, as
defined in section 761(4), or forward contract, that is made
before the commencement of the case, except under section
548(a)(1)(A) of this title.
(f) Notwithstanding sections 544, 545, 547, 548(a)(1)(B),
and 548(b) of this title, the trustee may not avoid a transfer
[that is a margin payment, as defined in section 741 or 761 of
this title, or settlement payment, as defined in section 741 of
this title,] made by or to (or for the benefit of) a repo
participant or financial participant, in connection with a
repurchase agreement and that ismade before the commencement of
the case, except under section 548(a)(1)(A) of this title.
(g) Notwithstanding sections 544, 545, 547, 548(a)(1)(B)
and 548(b) of this title, the trustee may not avoid a transfer,
made by or to (or for the benefit of) a swap participant or
financial participant, under or in connection with any swap
agreement and that is made before the commencement of the case,
except under section 548(a)(1)(A) of this title.
* * * * * * *
(j) Notwithstanding sections 544, 545, 547, 548(a)(1)(B),
and 548(b) the trustee may not avoid a transfer made by or to
(or for the benefit of) a master netting agreement participant
under or in connection with any master netting agreement or any
individual contract covered thereby that is made before the
commencement of the case, except under section 548(a)(1)(A) and
except to the extent that the trustee could otherwise avoid
such a transfer made under an individual contract covered by
such master netting agreement.
* * * * * * *
CHAPTER 7--LIQUIDATION
* * * * * * *
SUBCHAPTER III--STOCKBROKER LIQUIDATION
Sec. 741. Definitions for this subchapter
In this subchapter--
(1) * * *
* * * * * * *
(7) ``securities contract''--
(A) means--
(i) a contract for the purchase,
sale, or loan of a security, a
certificate of deposit, a [mortgage
loan or] mortgage loan, any interest in
a mortgage loan, a group or index of
securities, certificates of deposit, or
mortgage loans or interests therein
(including an interest therein or based
on the value thereof), or option on any
of the foregoing, including an option
to purchase or sell any such security,
certificate of deposit, mortgage loan,
interest, group or index, or option,
and including any repurchase or reverse
repurchase transaction on any such
security, certificate of deposit,
mortgage loan, interest, group or
index, or option (whether or not such
repurchase or reverse repurchase
transaction is a ``repurchase
agreement'', as defined in section
101);
* * * * * * *
(iii) the guarantee (including by
novation) by or to any securities
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
onany of the foregoing, including an
option to purchase or sell any such security, certificate of deposit,
mortgage loan, interest, group or index, or option (whether or not such
settlement is in connection with any agreement or transaction referred
to in clauses (i) through (xi));
* * * * * * *
(v) any extension of credit for the
clearance or settlement of securities
transactions;
(vi) any loan transaction coupled
with a securities collar transaction,
any prepaid forward securities
transaction, or any total return swap
transaction coupled with a securities
sale transaction;
[(v)] (vii) any other agreement or
transaction that is similar to an
agreement or transaction referred to in
this subparagraph;
[(vi)] (vvv) any combination of the
agreements or transactions referred to
in this subparagraph;
[(vii)] (ix) any option to enter into
any agreement or transaction referred
to in this subparagraph;
[(viii)] (x) a master agreement that
provides for an agreement or
transaction referred to in clause (i),
(ii), (iii), (iv), (v), (vi), [or
(vii)] (vii), (viii), or (ix), 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
securities contract under this
subparagraph, except that such master
agreement shall be considered to be a
securities contract under this
subparagraph only with respect to each
agreement or transaction under such
master agreement that is referred to in
clause (i), (ii), (iii), (iv), (v),
(vi), [or (vii)] (vii), (viii), or
(ix); or
[(ix)] (xi) any security agreement or
arrangement or other credit enhancement
related to any agreement or transaction
referred to in this subparagraph,
including any guarantee or
reimbursement obligation by or to a
stockbroker, securities clearing
agency, financial institution, or
financial participant in connection
with any agreement or transaction
referred to in this subparagraph, but
not to exceed the damages in connection
with any such agreement or transaction,
measured in accordance with section
562; and
* * * * * * *
----------
SECTION 5 OF THE SECURITIES INVESTOR PROTECTION ACT OF 1970
SEC. 5. PROTECTION OF CUSTOMERS.
(a) * * *
(b) Court Action.--
(1) * * *
(2) Jurisdiction and powers of court.--
(A) * * *
* * * * * * *
(C) Exception from stay.--
(i) * * *
* * * * * * *
(iii) As used in this subparagraph,
the term ``contractual right'' includes
a right set forth in a rule or bylaw of
a derivatives clearing organization (as
defined in the Commodity Exchange Act),
a multilateral clearing organization
(as defined in the Federal Deposit
Insurance Corporation Improvement Act
of 1991), a national securities
exchange, a national securities
association, [or a securities clearing
agency, a right set forth in a bylaw of
a clearing organization or contract
market] 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 Commodity Exchange Act), or in a
resolution of the governing board
thereof, and a right, whether or not in
writing, arising under common law,
under law merchant, or by reason of
normal business practice.
* * * * * * *
----------
BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2005
* * * * * * *
TITLE IX--FINANCIAL CONTRACT PROVISIONS
* * * * * * *
SEC. 912. SAVINGS CLAUSE.
The meanings of terms used in this title are applicable for
the 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 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 such term is defined in section 3(a)(47) of
the Securities Exchange Act of 1934), and the Commodity
Exchange Act.
* * * * * * *
----------
TITLE 28, UNITED STATES CODE
* * * * * * *
PART II--DEPARTMENT OF JUSTICE
* * * * * * *
CHAPTER 39--UNITED STATES TRUSTEES
* * * * * * *
Sec. 589a. United States trustee system fund
(a) * * *
(b) For the purpose of recovering the cost of services of
the United States Trustee System, there shall be deposited as
offsetting collections to the appropriation ``United States
Trustee System Fund'', to remain available until expended, the
following--
(1)(A) [40.46] 29.67 percent of the fees collected
under section 1930(a)(1)(A); and
* * * * * * *
PART V--PROCEDURE
* * * * * * *
CHAPTER 123--FEES AND COSTS
* * * * * * *
Sec. 1930. Bankruptcy fees
(a) The parties commencing a case under title 11 shall pay
to the clerk of the district court or the clerk of the
bankruptcy court, if one has been certified pursuant to section
156(b) of this title, the following filing fees:
(1) For a case commenced under--
(A) chapter 7 of title 11, [$245] $300; and
* * * * * * *
----------
SECTION 406 OF THE JUDICIARY APPROPRIATIONS ACT, 1990
Sec. 406. (a) * * *
(b) All fees as shall be hereafter collected for any
service not of a kind described in any of the items enumerated
as items 1 through 7 and as items 9 through 18, as in effect on
November 21, 1989, of the bankruptcy miscellaneous fee schedule
prescribed by the Judicial Conference of the United States
under section 1930(b) of title 28, United States Code, [28.87]
21.17 percent of the fees collected under section 1930(a)(1)(A)
of that title, 35.00 percent of the fees collected under
section 1930(a)(1)(B) of that title, and 25 percent of the fees
collected under section 1930(a)(3) of that title shall be
deposited as offsetting receipts to the fund established under
section 1931 of that title and shall remain available to the
Judiciary until expended to reimburse any appropriation for the
amount paid out of such appropriation for expenses of the
Courts of Appeals, District Courts, and other Judicial Services
and the Administrative Office of the United States Courts. The
Judicial Conference shall report to the Committees on
Appropriations of the House of Representatives and the Senate
on a quarterly basis beginning on the first day of each fiscal
year regarding the sums deposited in said fund.
* * * * * * *
----------
SECTION 10101 OF DEFICIT REDUCTION ACT OF 2005
(Public Law 109-171)
SEC. 10101. BANKRUPTCY FEES.
(a) Bankruptcy Filing Fees.--Section 1930(a) of title 28,
United States Code, is amended--
(1) * * *
[(2) in paragraph (2) by striking ``$1,000'' and
inserting ``$2,750''.]
* * * * * * *