§ 4403. — Bilateral netting.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC4403]
TITLE 12--BANKS AND BANKING
CHAPTER 45--PAYMENT SYSTEM RISK REDUCTION
SUBCHAPTER I--BILATERAL AND CLEARING ORGANIZATION NETTING
Sec. 4403. 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 institution
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
This section shall be given effect notwithstanding that a financial
institution is a failed financial institution.
(Pub. L. 102-242, title IV, Sec. 403, Dec. 19, 1991, 105 Stat. 2374.)
Section Referred to in Other Sections
This section is referred to in section 4405 of this title.
