Page:United States Statutes at Large Volume 105 Part 3.djvu/490

 105 STAT. 2374 PUBLIC LAW 102-242—DEC. 19, 1991 (B) INVALID CONTRACTS NOT INCLUDED. —The term "netting contract" does not include any contract or agreement that is invalid under or precluded by Federal commodities law. 12 USC 4403. SEC. 403. BILATERAL NETTING. (a) GENERAL RULE. —Notwithstanding any other provision of law, 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. (b) LIMITATION ON OBLIGATION TO MAKE PAYMENT.— The only obligation, if any, of a financial institution to make payment with respect to covered contractual payment obligations to another financial institution shall be equal to its net obligation to such other financial institution, and no such obligation shall exist if there is no net obligation. (c) LIMITATION ON RIGHT TO RECEIVE PAYMENT. —The only right, if any, of a financial institution to receive payments with respect to covered contractual payment entitlements from another financial institution shall be equal to its net entitlement with respect to such other financial institution, and no such right shall exist if there is no net entitlement. (d) PAYMENT OF NET ENTITLEMENT OF FAILED FINANCIAL INSTITU- TION.— The net entitlement of any failed financial institution, if any, shall be paid to the failed financial institution in accordance with, and subject to the conditions of, the applicable netting contract. (e) EFFECTIVENESS NOTWITHSTANDING STATUS AS FINANCIAL INSTITUTION.—Th is section shall be given effect notwithstanding that a financial institution is a failed financial institution. 12 USC 4404. SEC. 404. CLEARING ORGANIZATION NETTING. (a) GENERAL NETTING RULE.— Notwithstanding any other provision of law, the covered contractual payment obligations and 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. (b) LIMITATION OF OBLIGATION TO MAKE PAYMENT. —The only obligation, if any, of a member of a clearing organization to make payment with respect to covered contractual payment obligations arising under a single netting contract to any other member of a clearing organization shall be equal to its net obligation arising under that netting contract, and no such obligation shall exist if there is no net obligation. (c) LIMITATION ON RIGHT TO RECEIVE PAYMENT.— The only right, if any, of a member of a clearing organization to receive payment with respect to a covered contractual payment entitlement arising under a single netting contract from other members of a clearing organization shall be equal to its net entitlement arising under that netting contract, and no such right shall exist if there is no net entitlement. (d) ENTITLEMENT OF FAILED MEMBERS.— The net entitlement, if any, of any failed member of a clearing organization shall be paid to the failed member in accordance with, and subject to the conditions of, the applicable netting contract. (e) OBLIGATIONS OF FAILED MEMBERS. —The net obligation, if any, of any failed member of a clearing organization shall be determined

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