[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4239 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 4239

 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

                             July 16, 1998

 Mr. Leach (for himself, Mr. LaFalce, Mr. McCollum, and Mrs. Roukema) 
 introduced the following bill; which was referred to the Committee on 
 Banking and Financial Services, and in addition to the Committees on 
the Judiciary, and Commerce, for a period to be subsequently determined 
 by the Speaker, in each case for consideration of such provisions as 
        fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
 To revise the banking and bankruptcy insolvency laws with respect to 
   the termination and netting of financial contracts, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Financial Contract Netting 
Improvement Act of 1998''.

SEC. 2. TREATMENT OF CERTAIN AGREEMENTS BY CONSERVATORS OR RECEIVERS OF 
              INSURED DEPOSITORY INSTITUTIONS.

    (a) Definition of Qualified Financial Contract.--Section 
11(e)(8)(D)(i) of the Federal Deposit Insurance Act (12 U.S.C. 
1821(e)(8)(D)(i)) is amended by inserting ``, resolution or order'' 
after ``any similar agreement that the Corporation determines by 
regulation''.
    (b) Definition of Securities Contract.--Section 11(e)(8)(D)(ii) of 
the Federal Deposit 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, 
                                or any mortgage loan, mortgage related 
                                security (as defined in section 
                                3(a)(41) of the Securities Exchange Act 
                                of 1934 (15 U.S.C. 78c(a)(41)) or 
                                interest therein, including an option 
                                for the purchase or sale of a security, 
                                certificate of deposit, or group or 
                                index of securities (including any 
                                interest therein or based on the value 
                                thereof) or any option entered into on 
                                a national securities exchange relating 
                                to foreign currencies, or the guarantee 
                                of any settlement of cash or securities 
                                by or to a securities clearing agency, 
                                or any other similar agreement;
                                    ``(II) does not include any 
                                participation in or servicing agreement 
                                for a commercial mortgage loan unless 
                                the Corporation determines by 
                                regulation, resolution, or order to 
                                include any such participation within 
                                the meaning of such term; and
                                    ``(III) does not include an 
                                agreement that provides for the 
                                transfer of securities against the 
                                transfer of funds by the transferee of 
                                such securities with a simultaneous 
                                agreement by such transferee to 
                                transfer to the transferor thereof 
                                securities against the transfer of 
                                funds; provided, however, the exclusion 
                                contained in this subparagraph does not 
                                apply to any such agreement for the 
                                transfer of the types of securities 
                                referred to in section 1821(e)(8)(D)(v) 
                                against funds so long as the 
                                simultaneous agreement provides for the 
                                transfer of funds against such 
                                securities within 1 year of the 
                                transfer of such securities.''.
    (c) Definition of Commodity Contract.--Section 11(e)(8)(D)(iii) of 
the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(iii)) is 
amended to read as follows:
                            ``(iii) Commodity contract.--The term 
                        `commodity contract' has the meaning given to 
                        such term in section 761(4) of title 11, United 
                        States Code, or any other similar agreement.''.
    (d) Definition of Forward Contract.--Section 11(e)(8)(D)(iv) of the 
Federal Deposit 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 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, but not limited to, a repurchase 
agreement, consignment, lease, swap, hedge transaction, deposit, loan, 
option, allocated transaction, unallocated transaction, or any 
combination thereof or option thereon, or any other similar 
agreement.''.
    (e) Definition of Repurchase Agreement.--Section 11(e)(8)(D)(v) of 
the Federal Deposit 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 also applies to a 
                        reverse repurchase agreement)--
                                    ``(I) means an agreement, including 
                                related terms, that provides for the 
                                transfer of certificates of deposit, 
                                mortgage-related securities (as such 
                                term is defined in section 3(a)(41) of 
                                the Securities Exchange Act of 1934 (15 
                                U.S.C. 78c(a)(41)), any mortgage loan, 
                                and any interest in any mortgage loan, 
                                eligible bankers' acceptances, 
                                qualified foreign government securities 
                                or securities that are direct 
                                obligations of, or that are fully 
                                guaranteed as to principal and interest 
                                by, the United States or any agency of 
                                the United States against the transfer 
                                of funds by the transferee of such 
                                certificates of deposit, eligible 
                                bankers' acceptances, or securities 
                                with a simultaneous agreement by such 
                                transferee to transfer to the 
                                transferor thereof certificates of 
                                deposit, mortgage-related securities, 
                                and mortgage loan, and any interest in 
                                any mortgage loan, eligible bankers' 
                                acceptances, or securities 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; and
                                    ``(II) does not include any 
                                participation in a commercial mortgage 
                                loan unless the Corporation determines 
                                by regulation, resolution, or order to 
                                include any such participation within 
                                the meaning of such term.
                        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 central 
                        government of a member of the Organization for 
                        Economic Cooperation and Development (as 
                        determined by regulation or order adopted by 
                        the appropriate Federal banking authority).''.
    (f) Definition of Swap Agreement.--The Federal Deposit Insurance 
Act (12 U.S.C. 1821(e)(8)(D)(vi)) is amended to read as follows:
                            ``(vi) Swap agreement.--The term `swap 
                        agreement'--
                                    ``(I) means 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 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 
                                credit swap, option, future, or forward 
                                agreement; a commodity swap, option, 
                                future, or forward agreement or any 
                                other similar agreement;
                                    ``(II) means any combination of 
                                such agreements and any option to enter 
                                into any such agreement;
                                    ``(III) does not include any 
                                transaction, no matter how documented, 
                                that is in substance a commercial, 
                                consumer, or industrial loan; and
                                    ``(IV) as defined in this clause 
                                shall not be construed or applied to 
                                challenge or affect the 
                                characterization, definition, or 
                                treatment of any swap agreement or any 
                                instrument defined as a swap agreement 
                                herein, under any other statute, 
                                regulation, or rule, including, but not 
limited to, the Securities Act of 1933 (15 U.S.C. 77a et seq.), the 
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), the Public 
Utility Holding Company Act of 1935 (15 U.S.C. 79a et seq.), the Trust 
Indenture Act of 1939 (15 U.S.C. 77aa et seq.), the Investment Company 
Act of 1940 (15 U.S.C. 80a-1 et seq.), the Investment Advisers Act of 
1940 (15 U.S.C. 80b et seq.), the Securities Investor Protection Act of 
1970 (15 U.S.C. 78aaa et seq.), the Commodity Exchange Act (7 U.S.C. 1 
et seq.), and the rules and regulations promulgated by the Securities 
and Exchange Commission or the Commodity Futures Trading Commission.''.
    (g) Definition of Transfer.--Section 11(e)(8)(D)(viii) of the 
Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(viii)) is 
amended to read as follows:
                            ``(viii) Transfer.--The term `transfer' 
                        means every mode, direct or indirect, absolute 
                        or conditional, voluntary or involuntary, of 
                        disposing of or parting with property or with 
                        an interest in property, including retention of 
                        title as a security interest and foreclosure of 
                        the debtor's equity of redemption.''.
    (h) Treatment of Qualified Financial Contracts.--Section 11(e)(8) 
of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)) is 
amended--
            (1) in subparagraph (A), by striking ``paragraph (10)'' and 
        inserting ``paragraphs (9) and (10)'';
            (2) in subparagraph (A)(i), by striking ``to cause the 
        termination or liquidation'' and inserting ``such person has to 
        cause the termination, liquidation, or acceleration'';
            (3) by amending subparagraph (A)(ii) to read as follows:
                            ``(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
            (4) by amending subparagraph (E)(ii) to read as follows:
                            ``(ii) any right under any security 
                        agreement or arrangement or other credit 
                        enhancement related to 1 or more qualified 
                        financial contracts described in clause (i);''.
    (i) Avoidance of Transfers.--Section 11(e)(8)(C)(i) of the Federal 
Deposit Insurance Act (12 U.S.C. 1821(e)(8)(C)(i)) is amended by 
inserting ``section 5242 of the Revised Statutes (12 U.S.C. 91) or any 
other Federal or State law relating to the avoidance of preferential or 
fraudulent transfers,'' before ``the Corporation''.

SEC. 3. AUTHORITY OF THE CORPORATION WITH RESPECT TO FAILED AND FAILING 
              INSTITUTIONS.

    (a) Section 11(e)(8) of the Federal Deposit Insurance Act (12 
U.S.C. 1821(e)(8)) is amended--
            (1) in subparagraph (E), by striking ``other than paragraph 
        (12) of this subsection, subsection (d)(9)'' and inserting 
        ``other than subsections (d)(9) and (d)(10)''; and
            (2) 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 manner, the right or power of 
                the Corporation 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 accordance with subsection (e)(1) of this 
                section.
                    ``(G) Walkaway clauses not effective.--
                Notwithstanding the provisions of subparagraphs (A) and 
                (E), and sections 403 and 404 of the Federal Deposit 
                Insurance Corporation Improvement Act of 1991 (12 
                U.S.C. 4403 and 4404), no walkaway clause shall be 
                enforceable in a qualified financial contract of an 
                insured depository institution in default. For purposes 
                of this subparagraph, a `walkaway clause' is 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.''.
    (b) Section 11(e)(12)(A) of the Federal Deposit Insurance Act (12 
U.S.C. 1821(e)(12)(A)) is amended by inserting ``or the exercise of 
rights or powers'' after ``the appointment''.

SEC. 4. AMENDMENTS RELATING TO TRANSFERS OF QUALIFIED FINANCIAL 
              CONTRACTS.

    (a) 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 contracts.--
                    ``(A) In general.--In making any transfer of assets 
                or liabilities of a depository institution in default 
                which includes any qualified financial contract, the 
                conservator or receiver for such depository institution 
                shall either--
                            ``(i) transfer to 1 financial institution, 
                        other than a financial institution for which a 
                        conservator, receiver, trustee in bankruptcy, 
                        or other legal custodian has been appointed or 
                        which is otherwise the subject of a bankruptcy 
                        or insolvency proceeding--
                                    ``(I) all qualified financial 
                                contracts between any person or any 
                                affiliate of such person and the 
                                depository 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 
                                depository institution against such 
                                person or any affiliate of such person 
                                under any such contract; and
                                    ``(IV) all property securing any 
                                claim described in subclause (II) or 
                                (III) under any such contract, or any 
                                other credit enhancement for any 
                                contract described in clause (I); or
                            ``(ii) transfer none of the qualified 
                        financial contracts, claims, or property 
                        referred to in clause (i) (with respect to such 
                        person and any affiliate of such person).
                    ``(B) Transfer to foreign bank, foreign financial 
                institution, or branch or agency of a foreign bank or 
                financial institution.--In transferring any qualified 
                financial contracts and related claims and property 
                pursuant to subparagraph (A)(i), the conservator or 
                receiver for such depository institution shall not make 
                such transfer to a foreign bank, financial 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, the contractual rights of the parties to such 
                qualified financial contracts are enforceable 
                substantially to the same extent as permitted under 
                this section.
                    ``(C) Transfer of contracts subject to the rules of 
                a clearing organization.--In the event that a 
                conservator or receiver transfers any qualified 
                financial contract and related claims and property 
                pursuant to subparagraph (A)(i) and such contract is 
                subject to the rules of a clearing organization, the 
                clearing organization shall not be required to accept 
                the transferee as a member by virtue of the transfer.
                    ``(D) Definition.--For purposes of this section, 
                the term `financial institution' means a broker or 
                dealer, a depository institution, a futures commission 
                merchant, or any other institution as determined by the 
                Corporation by regulation to be a financial 
                institution.''.
    (b) Notice to Qualified Financial Contract Counterparties.--Section 
11(e)(10)(A) of the Federal Deposit Insurance Act (12 U.S.C. 
1821(e)(10)(A)) is amended by amending the flush material following 
clause (ii) to read as follows: ``the conservator or receiver shall 
notify any person who is a party to any such contract of such transfer 
by 5:00 p.m. (eastern time) on--
                                    ``(I) the business day following 
                                the date of the appointment of the 
                                receiver, in the case of a 
                                receivership; or
                                    ``(II) the business day following 
                                such transfer in the case of a 
                                conservatorship.''.
    (c) Rights Against Receiver and Treatment of Bridge Banks.--Section 
11(e)(10) of the Federal Deposit Insurance Act (12 U.S.C. 1821(e)(10)) 
is further amended--
            (1) by redesignating subparagraph (B) as subparagraph (D); 
        and
            (2) by inserting after subparagraph (A) the following new 
        subparagraphs:
                    ``(B) Certain rights not enforceable.--
                            ``(i) Receivership.--A person who is a 
                        party to a qualified financial contract with an 
                        insured depository institution may not exercise 
                        any right such person has to terminate, 
                        liquidate, or net such contract under paragraph 
                        (8)(A) or section 403 or 404 of the Federal 
                        Deposit Insurance Corporation Improvement Act 
                        of 1991 solely by reason of or incidental to 
                        the appointment of a receiver for the 
                        depository institution (or the insolvency or 
                        financial condition of the depository 
                        institution for which the receiver has been 
                        appointed)--
                                    ``(I) until 5:00 p.m. (eastern 
                                time) on the business day following the 
                                date of the appointment of the 
                                receiver; or
                                    ``(II) after the person has 
                                received notice that the contract has 
                                been transferred pursuant to paragraph 
                                (9)(A).
                            ``(ii) Conservatorship.--A person who is a 
                        party to a qualified financial contract with an 
                        insured depository institution may not exercise 
                        any right such person has to terminate, 
                        liquidate, or net such contract under paragraph 
                        (8)(E) or sections 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 
                        subsection, the Corporation as receiver or 
                        conservator of an insured depository 
                        institution shall be deemed to have notified a 
                        person who is a party to a qualified financial 
                        contract with such depository institution if 
                        the Corporation has taken steps reasonably 
                        calculated to provide notice to such person by 
                        the time specified in subparagraph (A) of this 
                        subsection.
                    ``(C) Treatment of bridge banks.--The following 
                institutions shall not be considered 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 
                subsection (e)(9)--
                            ``(i) a bridge bank; or
                            ``(ii) a depository institution organized 
                        by the Corporation, for which a conservator is 
                        appointed either--
                                    ``(I) immediately upon the 
                                organization of the institution; or
                                    ``(II) at the time of a purchase 
                                and assumption transaction between such 
                                institution and the Corporation as 
                                receiver for a depository institution 
                                in default.''.

SEC. 5. AMENDMENTS RELATING TO DISAFFIRMANCE OR REPUDIATION OF 
              QUALIFIED FINANCIAL CONTRACTS.

    Section 11(e) of the Federal Deposit Insurance Act (12 U.S.C. 
1821(e)) is further amended--
            (1) by redesignating paragraphs (11) through (15) as 
        paragraphs (12) through (16), respectively; and
            (2) by inserting after paragraph (10) the following new 
        paragraph:
            ``(11) Disaffirmance or repudiation of qualified financial 
        contracts.--In exercising its rights of disaffirmance or 
        repudiation with respect to any qualified financial contract to 
        which such institution is a party, the conservator or receiver 
        for such institution shall either--
                    ``(A) disaffirm or repudiate all qualified 
                financial contracts between--
                            ``(i) any person or any affiliate of such 
                        person; and
                            ``(ii) the depository institution in 
                        default; or
                    ``(B) disaffirm or repudiate none of the qualified 
                financial contracts referred to in subparagraph (A) 
                (with respect to such person or any affiliate of such 
                person).''.

SEC. 6. CLARIFYING AMENDMENT RELATING TO MASTER AGREEMENTS.

    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 1 
                        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 qualified 
                        financial contract. If a master agreement 
                        contains provisions relating to agreements or 
                        transactions that are not themselves qualified 
                        financial contracts, the master agreement shall 
                        be deemed to be a qualified financial contract 
                        only with respect to those transactions that 
                        are themselves qualified financial 
                        contracts.''.

SEC. 7. FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991.

    (a) Definitions.--Section 402 of the Federal Deposit Insurance 
Corporation Improvement Act of 1991 (12 U.S.C. 4402) is amended--
            (1) in paragraph (6)--
                    (A) by redesignating subparagraphs (B) through (D) 
                as subparagraphs (C) through (E), respectively;
                    (B) by inserting after subparagraph (A) the 
                following new subparagraph:
                    ``(B) an uninsured national bank or an uninsured 
                State bank that is a member of the Federal Reserve 
                System if the national bank or State member bank is not 
                eligible to make application to become an insured bank 
                under section 5 of the Federal Deposit Insurance Act 
                (12 U.S.C. 1815);''; and
                    (C) by amending subparagraph (C) (as redesignated) 
                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 established the branch 
                or agency, as those terms are defined in section 1(b) 
                of the International Banking Act of 1978 (12 U.S.C. 
                3101);'';
            (2) in paragraph (11), by adding before the period ``and 
        any other clearing organization with which such clearing 
        organization has a netting contract'';
            (3) by amending paragraph (14)(A)(i) to read as follows:
                            ``(i) means a contract or agreement between 
                        2 or more financial institutions, clearing 
                        organizations, or members that provides for 
                        netting present or future payment obligations 
                        or payment entitlements (including liquidation 
                        or closeout values relating to such obligations 
                        or entitlements) among the parties to the 
                        agreement; and''; and
            (4) by adding at the end the following new paragraph:
            ``(15) Payment.--The term `payment' means a payment of 
        United States dollars, another currency, or a composite 
        currency, and a noncash delivery, including a payment or 
        delivery to liquidate an unmatured obligation.''.
    (b) Enforceability of Bilateral Netting Contracts.--Section 403 of 
the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 
U.S.C. 4403) is amended--
            (1) by amending subsection (a) to read as follows:
    ``(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 (12 U.S.C. 1821(e)) 
or any order authorized under section 5(b)(2) of the Securities 
Investor Protection Act of 1971 (15 U.S.C. 78eee(b)(2))), the covered 
contractual payment obligations and the covered contractual payment 
entitlements between any 2 financial institutions shall be netted in 
accordance with, and subject to the conditions of, the terms of any 
applicable netting contract.''; and
            (2) by adding at the end the following new subsection:
    ``(f) Enforceability of Security Agreements.--The provisions of any 
security agreement or arrangement or other credit enhancement related 
to 1 or more netting contracts between any 2 financial institutions 
shall be enforceable in accordance with their terms 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 (12 U.S.C. 1821(e)) and section 
5(b)(2) of the Securities Investor Protection Act of 1971 (15 U.S.C. 
78eee(b)(2))).''.
    (c) Enforceability of Clearing Organization Netting Contracts.--
Section 404 of the Federal Deposit Insurance Corporation Improvement 
Act of 1991 (12 U.S.C. 4404) is amended--
            (1) by amending subsection (a) to read as follows:
    ``(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 (12 U.S.C. 1821(e)) 
and any order authorized under section 5(b)(2) of the Securities 
Investor Protection Act of 1971 (15 U.S.C. 78eee(b)(2))), the covered 
contractual payment obligations and the covered contractual payment 
entitlements of a member of a clearing organization to and from all 
other members of a clearing organization shall be netted in accordance 
with and subject to the conditions of any applicable netting 
contract.''; and
            (2) by adding at the end the following new subsection:
    ``(h) Enforceability of Security Agreements.--The provisions of any 
security agreement or arrangement or other credit enhancement related 
to 1 or more netting contracts between any 2 members of a clearing 
organization shall be enforceable in accordance with their terms 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 (12 U.S.C. 1821(e)) 
and section 5(b)(2) of the Securities Investor Protection Act of 1971 
(15 U.S.C. 78eee(b)(2)).''.
    (d) Enforceability of Contracts With Uninsured National Banks and 
Uninsured Federal Branches and Agencies.--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 408; and
            (2) by adding after section 406 the following new section:

``SEC. 407. TREATMENT OF CONTRACTS WITH UNINSURED NATIONAL BANKS AND 
              UNINSURED FEDERAL BRANCHES AND AGENCIES.

    ``(a) In General.--Notwithstanding any other provision of law, 
paragraphs (8), (9), and (11) of section 11(e) of the Federal Deposit 
Insurance Act (12 U.S.C. 1821(e)) shall apply to an uninsured national 
bank or uninsured Federal branch or Federal agency except--
            ``(1) any reference to the `Corporation as receiver' or 
        `the receiver or the Corporation' shall refer to the receiver 
        of an uninsured national bank or uninsured Federal branch or 
        Federal agency appointed by the Comptroller of the Currency;
            ``(2) any reference to the `Corporation' (other than in 
        section 11(e)(8)(D) of such Act), the `Corporation, whether 
        acting as such or as conservator or receiver', a `receiver', or 
        a `conservator' shall refer to the receiver or conservator of 
        an uninsured national bank or uninsured Federal branch or 
        Federal agency appointed by the Comptroller of the Currency; 
        and
            ``(3) any reference to an `insured depository institution' 
        or `depository institution' shall refer to an uninsured 
        national bank or an uninsured Federal branch or Federal agency.
    ``(b) Liability.--The liability of a receiver or conservator of an 
uninsured national bank or uninsured Federal branch or agency shall be 
determined in the same manner and subject to the same limitations that 
apply to receivers and conservators of insured depository institutions 
under section 11(e) of the Federal Deposit Insurance Act (12 U.S.C. 
1821(e)).
    ``(c) Regulatory Authority.--
            ``(1) In general.--The Comptroller of the Currency, in 
        consultation with the Federal Deposit Insurance Corporation, 
        may promulgate regulations to implement this section.
            ``(2) Specific requirement.--In promulgating regulations to 
        implement this section, the Comptroller of the Currency shall 
        ensure that the regulations generally are consistent with the 
        regulations and policies of the Federal Deposit Insurance 
        Corporation adopted pursuant to the Federal Deposit Insurance 
        Act.
    ``(d) Definitions.--For purposes of this section, the terms 
`Federal branch', `Federal agency', and `foreign bank' have the same 
meaning as in section 1(b) of the International Banking Act (12 U.S.C. 
3101).''.

SEC. 8. BANKRUPTCY CODE AMENDMENTS.

    (a) Definitions of Swap Agreement, Securities Contract, Forward 
Contract, Commodity Contract, and Repurchase Agreement.--Title 11, 
United States Code, is amended--
            (1) in section 101--
                    (A) in paragraph (25)--
                            (i) by striking ``repurchase transaction, 
                        reverse repurchase transaction'';
                            (ii) by inserting ``repurchase agreement'' 
                        after ``but not limited to, a''; and
                            (iii) by inserting before the semicolon ``, 
                        or any other similar agreement, and a security 
                        agreement or arrangement or other credit 
                        enhancement related to 1 or more of the 
                        foregoing'';
                    (B) 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 
                        certificates of deposit, eligible bankers' 
                        acceptances, qualified foreign government 
                        securities or securities that are direct 
                        obligations of, or that are fully guaranteed as 
                        to principal and interest by, the United States 
                        or any agency of the United States against the 
                        transfer of funds by the transferee of such 
                        certificates of deposit, eligible bankers' 
                        acceptances, or securities with a simultaneous 
                        agreement by such transferee to transfer to the 
                        transferor thereof certificates of deposit, 
                        eligible bankers' acceptances, or securities 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; and
                            ``(ii) a security agreement or arrangement 
                        or other credit enhancement related to 1 or 
                        more of the foregoing; and
                    ``(B) does not include any participation in or 
                servicing agreement for a commercial mortgage loan.
For purposes of this paragraph, a `qualified foreign government 
security' means a security that is a direct obligation of, or that is 
fully guaranteed by, the central government of a member of the 
Organization for Economic Cooperation and Development.''; and
                    (C) by amending paragraph (53B) to read as follows:
            ``(53B) `swap agreement'--
                    ``(A) 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 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 credit 
                        swap, option, future, or forward agreement; a 
                        commodity swap, option, future, or forward 
                        agreement; or any other similar agreement; and
                            ``(ii) any combination of such agreements 
                        and any option to enter into any such 
                        agreement, and any security agreement or 
                        arrangement or other credit enhancement related 
                        to 1 or more of the foregoing;
                    ``(B) does not include any transaction, no matter 
                how documented, that is in substance a commercial, 
                consumer, or industrial loan; and
                    ``(C) such definition is applicable for purposes of 
                this title only and shall not be construed or applied 
                to challenge or affect the characterization, 
                definition, or treatment of any swap agreement or any 
                instrument defined as a swap agreement herein, under 
                any other statute, regulation, or rule, including but 
                not limited to, the Securities Act of 1933 (15 U.S.C. 
                77a et seq.), the Securities Exchange Act of 1934 (15 
                U.S.C. 78a et seq.), the Public Utility Holding Company 
                Act of 1935 (15 U.S.C. 79a et seq.), the Trust 
                Indenture Act of 1939 (15 U.S.C. 77aa et seq.), the 
                Investment Company Act of 1940 (15 U.S.C. 80a-1 et 
                seq.), the Investment Advisers Act of 1940 (15 U.S.C. 
                80b et seq.), the Securities Investor Protection Act of 
                1970 (15 U.S.C. 78aaa et seq.), the Commodity Exchange 
                Act (7 U.S.C. 1 et seq.), and the rules and regulations 
                promulgated by the Securities and Exchange Commission 
                or the Commodity Futures Trading Commission.'';
            (2) by amending section 741(7) to read as follows:
            ``(7) `securities contract'--
                    ``(A) means a contract for the purchase, sale, or 
                loan of a security, including an option for the 
                purchase or sale of a security, certificate of deposit, 
                or group or index of securities (including any interest 
                therein or based on the value thereof) or any option 
                entered into on a national securities exchange relating 
                to foreign currencies, or the guarantee of any 
                settlement of cash or securities by or to a securities 
                clearing agency, or any other similar agreement; and
                    ``(B) does not include--
                            ``(i) any participation in or servicing 
                        agreement for a commercial mortgage loan; or
                            ``(ii) an agreement that provides for the 
                        transfer of securities against the transfer of 
                        funds by the transferee of such securities with 
                        a simultaneous agreement by such transferee to 
                        transfer to the transferor thereof securities 
                        against the transfer of funds; provided, 
                        however, the exclusion contained in this clause 
                        does not apply to any such agreement for the 
                        transfer of the types of securities referred to 
                        in section 101(47) against funds so long as the 
                        simultaneous agreement provides for the 
                        transfer of funds against such securities 
                        within 1 year of the transfer of such 
                        securities.''; and
            (3) in section 761(4)--
                    (A) by striking ``or'' at the end of subparagraph 
                (D);
                    (B) by inserting ``or'' at the end of subparagraph 
                (E); and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(F) or any other similar agreement, and a 
                security agreement or arrangement or other credit 
                enhancement related to 1 or more of the foregoing;''.
    (b) Definitions of Financial Institution and Forward Contract 
Merchant.--Section 101 of title 11, United States Code, is amended--
            (1) by amending paragraph (22) to read as follows:
            ``(22) `financial institution' means a Federal Reserve 
        Bank, or a person that is a commercial or savings bank, 
        industrial savings bank, savings and loan association, trust 
        company, or receiver or conservator for such person and, when 
        any such Federal Reserve Bank, receiver, or conservator or 
        person acting as agent or custodian for a customer in 
        connection with a securities contract, as defined in section 
        741(7) of this title, such customer;''; and
            (2) by amending paragraph (26) to read as follows:--
            ``(26) `forward contract merchant' means a Federal Reserve 
        Bank, or a person whose business consists in whole or in part 
        of entering into forward contracts as or with merchants or in a 
        commodity, as defined or in section 761(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 or in 
        the forward contract trade;''.
    (c) Definition of Master Netting Agreement and Master Netting 
Agreement Participant.--Section 101 of title 11, United States Code, is 
amended by inserting after paragraph (38) the following new paragraphs:
            ``(38A) `master netting agreement' means an agreement 
        providing for the exercise of rights, including rights of 
        netting, setoff, liquidation, termination, acceleration, or 
        closeout, under or in connection with 1 or more contracts that 
        are described in any 1 or more of paragraphs (1) through (5) of 
        section 561(a), or any security agreement or arrangement or 
        other credit enhancement related to 1 or more of the foregoing. 
        If a master netting agreement contains provisions relating to 
        agreements or transactions that are not contracts described in 
        paragraphs (1) through (5) of section 561(a), the master 
        netting agreement shall be deemed to be a master netting 
        agreement only with respect to those agreements or transactions 
        that are described in any 1 or more of the paragraphs (1) 
        through (5) of section 561(a);
            ``(38B) `master netting agreement participant' means an 
        entity that, at any time before the filing of the petition, is 
        a party to an outstanding master netting agreement with the 
        debtor;''.
    (d) Swap Agreements, Securities Contracts, Commodity Contracts, 
Forward Contracts, Repurchase Agreements, and Master Netting Agreements 
Under the Automatic-Stay.--Section 362(b) of title 11, United States 
Code, is amended--
            (1) in paragraph (6), by inserting ``, pledged to, and 
        under the control of,'' after ``held by'';
            (2) in paragraph (7), by inserting ``, pledged to, and 
        under the control of,'' after ``held by'';
            (3) by amending paragraph (17) to read as follows:
            ``(17) under subsection (a), of the setoff by a swap 
        participant of any mutual debt and claim under or in connection 
        with any swap agreement that constitutes the setoff of a claim 
        against the debtor for any payment due from the debtor under or 
        in connection with any swap agreement against any payment due 
        to the debtor from the swap participant under or in connection 
        with any swap agreement or against cash, securities, or other 
        property of the debtor held by, pledged to, and under the 
        control of, or due from such swap participant to guarantee, 
        secure, or settle any swap agreement;'';
            (4) in paragraph (18), by striking the period and inserting 
        ``; or''; and
            (5) by inserting after paragraph (18) the following new 
        paragraph:
            ``(19) under subsection (a), of the setoff by a master 
        netting agreement participant of a mutual debt and claim under 
        or in connection with a master netting agreement to the extent 
        such participant could offset the claim under paragraph (6), 
        (7), or (17) for each individual contract covered by the master 
        netting agreement in issue.''.
    (e) Limitation of Avoidance Powers Under Master Netting 
Agreement.--Section 546 of title 11, United States Code, is amended--
            (1) in subsection (g) (as added by section 103 of Public 
        Law 101-311)--
                    (A) by striking ``under a swap agreement'';
                    (B) by striking ``in connection with a swap 
                agreement'' and inserting ``under or in connection with 
                any swap agreement'';
            (2) by redesignating subsection (g) (as added by section 
        222(a) of Public Law 103-394) as subsection (i); and
            (3) by inserting before subsection (i) (as redesignated) 
        the following new subsection:
    ``(h) Notwithstanding sections 544, 545, 547, 548(a)(2), and 548(b) 
of this title, to the extent that under subsection (e), (f), or (g), 
the trustee may not avoid a transfer made by or to a master netting 
agreement participant under or in connection with each individual 
contract covered by any master netting agreement that is made before 
the commencement of the case, the trustee may not avoid a transfer made 
by or to such master netting agreement participant under or in 
connection with the master netting agreement in issue, except under 
section 548(a)(1) of this title.''.
    (f) Fraudulent Transfers of Master Netting Agreements.--Section 
548(d)(2) of title 11, United States Code, is amended--
            (1) in subparagraph (C), by striking ``and'';
            (2) in subparagraph (D), by striking the period and 
        inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(E) a master netting agreement participant that 
                receives a transfer in connection with a master netting 
                agreement takes for value to the extent of such 
                transfer, but only to the extent that such participant 
                would take for value under paragraph (B), (C), or (D) 
                for each individual contract covered by the master 
                netting agreement in issue.''.
    (g) Termination or Acceleration of Securities Contracts.--Section 
555 of title 11, United States Code, is amended--
            (1) by amending the section heading to read ``Contractual 
        right to liquidate, terminate, or accelerate a securities 
        contract''; and
            (2) in the first sentence, by striking ``liquidation'' and 
        inserting ``liquidation, termination, or acceleration''.
    (h) Termination or Acceleration of Commodities or Forward 
Contracts.--Section 556 of title 11, United States Code, is amended--
            (1) by amending the section heading to read ``Contractual 
        right to liquidate, terminate, or accelerate a commodities 
        contract or forward contract''; and
            (2) in the first sentence, by striking ``liquidation'' and 
        inserting ``liquidation, termination, or acceleration''.
    (i) Termination or Acceleration of Repurchase Agreements.--Section 
559 of title 11, United States Code, is amended--
            (1) by amending the section heading to read ``Contractual 
        right to liquidate, terminate, or accelerate a repurchase 
        agreement''; and
            (2) in the first sentence, by striking ``liquidation'' and 
        inserting ``liquidation, termination, or acceleration''.
    (j) Liquidation, Termination, or Acceleration of Swap Agreements.--
Section 560 of title 11, United States Code, is amended--
            (1) by amending the section heading to read ``Contractual 
        right to liquidate, terminate, or accelerate a swap 
        agreement''; and
            (2) in the first sentence, by striking ``termination of a 
        swap agreement'' and inserting ``liquidation, termination, or 
        acceleration of 1 or more swap agreements''; and
            (3) by striking ``in connection with any swap agreement'' 
        and inserting ``in connection with the termination, 
        liquidation, or acceleration of 1 or more swap agreements''.
    (k) Liquidation, Termination, Acceleration, or Offset Under a 
Master Netting Agreement and Across Contracts.--Title 11, United States 
Code, is amended by inserting after section 560 the following new 
section:
``Sec. 561. Contractual right to terminate, liquidate, accelerate, or 
              offset under a master netting agreement and across 
              contracts
    ``(a) In General.--Subject to subsection (b), the exercise of any 
contractual right, because of a condition of the kind specified in 
section 365(e)(1), to cause the termination, liquidation, or 
acceleration of or to offset, or net termination values, payment 
amounts or other transfer obligations arising under or in connection 
with the termination, liquidation, or acceleration of 1 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 operation of any 
provision of this title or by any order of a court or administrative 
agency in any proceeding under this title.
    ``(b) Exception.--
            ``(1) A party may exercise a contractual right described in 
        subsection (a) to terminate, liquidate, or accelerate only to 
        the extent that such party could exercise such a right under 
        section 555, 556, 559, or 560 for each individual contract 
        covered by the master netting agreement in issue.
            ``(2)(A) A party may not exercise a contractual right 
        described in subsection (a) to offset or to net obligations 
        arising under, or in connection with, a commodity contract 
        against obligations arising under, or in connection with, any 
        instrument listed in subsection (a) if the obligations are not 
        mutual.
            ``(B) If a debtor is a commodity broker subject to 
        subchapter IV of chapter 7 of this title, a party may not net 
        or offset an obligation to the debtor arising under, or in 
        connection with, a commodity contract against any claim arising 
        under, or in connection with, other instruments listed in 
        subsection (a) if the party has no positive net equity in the 
        commodity account at the debtor, as calculated under subchapter 
        IV.
    ``(c) Definition.--As used in this section, the term `contractual 
right' includes, but is not limited to, a right set forth in a rule or 
bylaw of 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 or in a resolution 
of the governing board thereof, and a right whether or not evidenced in 
writing arising under common law, under law merchant, or by reason of 
normal business practice.''.
    (l) Municipal Bankruptcies.--Section 901 of title 11, United States 
Code, is amended--
            (1) by inserting ``, 555, 556'' after ``553''; and
            (2) by inserting ``, 559, 560, 561, 562'' after ``557''.
    (m) Ancillary Proceedings.--Section 304 of title 11, United States 
Code, is amended by adding at the end the following new subsection:
    ``(d) Any provisions of this title relating to securities 
contracts, commodity contracts, forward contracts, repurchase 
agreements, swap agreements, or master netting agreements shall apply 
in a case ancillary to a foreign proceeding under this section.''.
    (n) Commodity Broker Liquidations.--Title 11, United States Code, 
is amended by inserting after section 766 the following new section:
``Sec. 767. Commodity broker liquidation and forward contract 
              merchants, commodity brokers, stockbrokers, financial 
              institutions, securities clearing agencies, swap 
              participants, repo participants, and master netting 
              agreement participants
    ``Notwithstanding any other provision of this title, the exercise 
of rights by a forward contract merchant, commodity broker, 
stockbroker, financial institution, securities clearing agency, swap 
participant, repo participant, or master netting agreement participant 
under this title shall not affect the priority of any unsecured claim 
it may have after the exercise of such rights or affect the provisions 
of this subchapter IV regarding customer property or distributions.''.
    (o) Stockbroker Liquidations.--Title 11, United States Code, is 
amended by inserting after section 752 the following new section:
``Sec. 753. Stockbroker liquidation and forward contract merchants, 
              commodity brokers, stockbrokers, financial institutions, 
              securities clearing agencies, swap participants, repo 
              participants, and master netting agreement participants
    ``Notwithstanding any other provision of this title, the exercise 
of rights by a forward contract merchant, commodity broker, 
stockbroker, financial institution, securities clearing agency, swap 
participant, repo participant, or master netting agreement participant 
under this title shall not affect the priority of any unsecured claim 
it may have after the exercise of rights or affect the provisions of 
this subchapter III regarding customer property or distributions.''.
    (p) Setoff.--Section 553 of title 11, United States Code, is 
amended--
            (1) in subsection (a)(3)(C), by inserting ``(except for a 
        setoff of a kind described in section 362(b)(6), 362(b)(7), 
        362(b)(17), 555, 556, 559, 560, or 561 of this title)'' before 
        the period; and
            (2) in subsection (b)(1), by striking ``362(b)(14),'' and 
        inserting ``362(b)(17), 555, 556, 559, 560, 561''.

SEC. 9. RECORDKEEPING REQUIREMENTS.

    Section 11(e)(8) of the Federal Deposit Insurance Act (12 U.S.C. 
1821(e)(8)) is amended by adding at the end the following new 
subparagraph:
                    ``(H) Recordkeeping requirements.--The Corporation, 
                in consultation with the appropriate Federal banking 
                agencies, may prescribe regulations requiring more 
                detailed recordkeeping with respect to qualified 
                financial contracts (including market valuations) by 
                insured depository institutions.''.

SEC. 10. EXEMPTIONS FROM CONTEMPORANEOUS EXECUTION REQUIREMENT.

    Section 13(e)(2) of the Federal Deposit Insurance Act (12 U.S.C. 
1823(e)(2)) is amended to read as follows:
            ``(2) Exemptions from contemporaneous execution 
        requirement.--An agreement to provide for the lawful 
        collateralization of--
                    ``(A) deposits of, or other credit extension by, a 
                Federal, State, or local governmental entity, or of any 
                depositor referred to in section 11(a)(2), including an 
                agreement to provide collateral in lieu of a surety 
                bond;
                    ``(B) bankruptcy estate funds pursuant to section 
                345(b)(2) of title 11, United States Code;
                    ``(C) extensions of credit, including any 
                overdraft, from a Federal Reserve Bank or Federal Home 
                Loan Bank; or
                    ``(D) 1 or more qualified financial contracts, as 
                defined in section 11(e)(8)(D),
        shall not be deemed invalid pursuant to paragraph (1)(B) solely 
        because such agreement was not executed contemporaneously with 
        the acquisition of the collateral or because of pledges, 
        delivery, or substitution of the collateral made in accordance 
        with such agreement.''.

SEC. 11. DAMAGE MEASURE.

    (a) Title 11, United States Code, is amended by inserting after 
section 561 (as added by section 7(k)) the following new section:
``Sec. 562. Damage measure in connection with swap agreements, 
              securities contracts, forward contracts, commodity 
              contracts, repurchase agreements, or master netting 
              agreements
    ``If the trustee rejects a swap agreement, securities contract as 
defined in section 741 of this title, forward contract, repurchase 
agreement, or master netting agreement pursuant to section 365(a) of 
this title, or if a forward contract merchant, stockbroker, financial 
institution, securities clearing agency, repo participant, master 
netting agreement participant, or swap participant liquidates, 
terminates, or accelerates any such contract or agreement, damages 
shall be measured as of the earlier of--
            ``(1) the date of such rejection; or
            ``(2) the date of such liquidation, termination, or 
        acceleration.''.
    (b) Section 502(g) of title 11, United States Code is amended--
            (1) by designating the existing text as paragraph (1); and
            (2) by adding at the end the following new paragraph:
            ``(2) A claim for damages calculated in accordance with 
        section 562 of this title shall be allowed under subsection 
        (a), (b), or (c) of this section or disallowed under subsection 
        (d) or (e) of this section as if such claim had arisen before 
        the date of the filing of the petition.''.

SEC. 12. SIPC STAY.

    Section 5(b)(2) of the Securities Investor Protection Act of 1971 
(15 U.S.C. 78eee(b)(2)) is amended by adding after subparagraph (B) the 
following new subparagraph:
                    ``(C) Exception from stay.--
                            ``(i) Notwithstanding section 362 of title 
                        11, neither the filing of an application under 
                        subsection (a)(3) nor any order or decree 
                        obtained by SIPC from the court shall operate 
                        as a stay of any contractual rights of a 
                        creditor to liquidate, terminate, or accelerate 
                        a securities contract, commodity contract, 
                        forward contract, repurchase agreement, swap 
                        agreement, or master netting agreement, each as 
                        defined in title 11, to offset or net 
                        termination values, payment amounts, or other 
                        transfer obligations arising under or in 
                        connection with 1 or more of such contracts or 
                        agreements, or to foreclose on any cash 
                        collateral pledged by the debtor whether or not 
                        with respect to 1 or more of such contracts or 
agreements.
                            ``(ii) Notwithstanding clause (i), such 
                        application, order, or decree may operate as a 
                        stay of the foreclosure on securities 
                        collateral pledged by the debtor, whether or 
                        not with respect to 1 or more of such contracts 
                        or agreements, or securities sold by the debtor 
                        under a repurchase agreement.
                            ``(iii) As used in this section, the term 
                        `contractual right' includes, but is not 
                        limited to, a right set forth in a rule or 
                        bylaw of 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 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.''.

SEC. 13. SEVERABILITY; EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

    (a) Severability.--If any provision of this Act or any amendment 
made by this Act, or the application of any such provision or amendment 
to any person or circumstance, is held to be unconstitutional, the 
remaining provisions of and amendments made by this Act and the 
application of such other provisions and amendments to any person or 
circumstance shall not be affected thereby.
    (b) Effective Date.--This Act shall take effect on the date of the 
enactment of this Act.
    (c) Application of Amendments.--The amendments made by this Act 
shall apply with respect to cases commenced or appointments made under 
any Federal or State law after the date of enactment of this Act, but 
shall not apply with respect to cases commenced or appointments made 
under any Federal or State law before the date of enactment of this 
Act.
                                 <all>