11 U.S.C. § 555 — Contractual right to liquidate, terminate, or accelerate a securities contract
submitted 44 years ago by Pub. L. 97-222 to r/title-11-BANKRUPTCY · 230 words · no verdicts yet
Certain participants in securities contracts may exercise contractual rights to liquidate, terminate, or accelerate despite bankruptcy proceedings, subject to specified securities-law exceptions. “Contractual right” includes rights in listed rules, bylaws, resolutions, common law, law merchant, or normal business practice.
A stockbroker, financial institution*, financial participant*, or securities clearing agency may exercise a contractual right to liquidate, terminate, or accelerate a securities contract, as defined in section 741, because of a condition described in section 365(e)(1). Bankruptcy law or a court or administrative-agency order in a bankruptcy proceeding may not stay, avoid, or otherwise limit that exercise, unless the order is authorized under the Securities Investor Protection Act of 1970 or a statute administered by the Securities and Exchange Commission. “Contractual right” includes a right in a rule or bylaw of a derivatives clearing organization, multilateral clearing organization, national securities exchange, national securities association, securities clearing agency, Commodity Exchange Act contract market, registered derivatives transaction execution facility, or board of trade, or in its governing board’s resolution. It also includes a right, written or not, arising under common law, law merchant, or normal business practice. The quoted terms are not defined by this section.
The exercise of a contractual right of a stockbroker, financial institution*, financial participant*, or securities clearing agency to cause the liquidation, termination, or acceleration of a securities contract, as defined in section 741 of this title, because of a condition of the kind specified in section 365(e)(1) of this title shall not be stayed, avoided, or otherwise limited by operation of any provision of this title or by order of a court or administrative agency in any proceeding under this title unless such order is authorized under the provisions of the Securities Investor Protection Act of 1970 or any statute administered by the Securities and Exchange Commission. As used in this section, 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, 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.
Source credit: (Added Pub. L. 97–222, § 6(a), July 27, 1982, 96 Stat. 236; amended Pub. L. 98–353, title III, § 469, July 10, 1984, 98 Stat. 380; Pub. L. 103–394, title V, § 501(b)(6), (d)(20), Oct. 22, 1994, 108 Stat. 4143, 4146; Pub. L. 109–8, title IX, § 907(g), (o)(7), Apr. 20, 2005, 119 Stat. 177, 182.)
- 1982Enacted · Pub. L. 97-222 · 96 Stat. 236
- 1984Amended · Pub. L. 98-353 · 98 Stat. 380
- 1994Amended · Pub. L. 103-394 · 108 Stat. 4143, 4146
- 2005Amended · Pub. L. 109-8 · 119 Stat. 177, 182
A history note hasn’t been published yet. The record shows enactment by Pub. L. 97-222 on 1982-07-27.
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