Page:United States Statutes at Large Volume 105 Part 3.djvu/488

 105 STAT. 2372 PUBLIC LAW 102-242—DEC. 19, 1991 (4) such netting procedures would reduce the systemic risk within the banking system and financial markets; and (5) the effectiveness of such netting procedures can be assured only if they are recognized as valid and legally binding in the event of the closing of a financial institution participating in the netting procedures. 12 USC 4402. SEC. 402. DEFINITIONS. For purposes of this subtitle— (1) BROKER OR DEALER.— The term 'broker or dealer' means— (A) any company that is registered or licensed under Federal or State law to engage in the business of brokering, underwriting, or dealing in securities in the United States; and (B) to the extent consistent with this title, as determined by the Board of Governors of the Federal Reserve System, any company that is an affiliate of a company described in subparagraph (A) and that is engaged in the business of entering into netting contracts. (2) CLEARING ORGANIZATION. — The term "clearing organization" means a clearinghouse, clearing association, clearing corporation, or similar organization— (A) that provides clearing, netting, or settlement services for its members and— (i) in which all members other than the clearing organization itself are financial institutions or other clearing organizations; or (ii) which is registered as a clearing agency under the Securities Exchange Act of 1934; or (B) that performs clearing functions for a contract market designated pursuant to the Commodity Exchange Act. (3) COVERED CLEARING OBLIGATION. — The term "covered clearing obligation" means an obligation of a member of a clearing organization to make payment to another member of a clearing organization, subject to a netting contract. (4) COVERED CONTRACTUAL PAYMENT ENTITLEMENT.— The term "covered contractual payment entitlement" means— (A) an entitlement of a financial institution to receive a payment, subject to a netting contract from another financial institution; and (B) an entitlement of a member of a clearing organization to receive payment, subject to a netting contract, from another member of a clearing organization of a covered clearing obligation. (5) COVERED CONTRACTUAL PAYMENT OBLIGATION. —The term "covered contractual payment obligation" means— (A) an obligation of a financial institution to make pay- ment, subject to a netting contract to another financial institution; and (B) a covered clearing obligation. (6) DEPOSITORY INSTITUTION. —The term "depository institution" means— (A) a depository institution as defined in section 19(b)(1)(A) of the Federal Reserve Act (other than clause (vii)); (B) a branch or agency as defined in section 1(b) of the International Banking Act of 1978;

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