H.R.4612 - To amend title 11 of the United States Code regarding swap agreements and forward contracts.101st Congress (1989-1990)
|Sponsor:||Rep. Brooks, Jack B. [D-TX-9] (Introduced 04/25/1990)|
|Committees:||House - Judiciary|
|Committee Reports:||H.Rept 101-484|
|Latest Action:||06/25/1990 Became Public Law No: 101-311. (All Actions)|
This bill has the status Became Law
Here are the steps for Status of Legislation:
- Passed House
- Passed Senate
- To President
- Became Law
Summary: H.R.4612 — 101st Congress (1989-1990)All Information (Except Text)
Passed House amended (05/15/1990)
Title I: Swap Agreements - Amends Federal bankruptcy law to define "swap agreement" and "swap participant."
Exempts various transactions in connection with currency swap agreements from the automatic stay triggered by the filing of a bankruptcy petition.
Prohibits the trustee in bankruptcy from avoiding any transfer made under a swap agreement before commencement of the bankruptcy case or any setoff in connection with a swap agreement if the offset is made within 90 days prior to the bankruptcy filing.
Provides that the contractual right of a nonbankrupt party to a swap agreement to terminate the agreement shall not be stayed or otherwise limited under Federal bankruptcy law or by related judicial or administrative proceedings.
Title II: Forward Contracts - Amends Federal bankruptcy law to revise the definition of "forward contract" to include commodities enumerated in the Commodity Exchange Act as well as any similar item which is presently or may in the future become the subject of dealing in the forward contract trade. Designates specified transactions within the definition of "forward contract" including repurchase and reverse repurchase transactions, options and hedge transactions. Defines margin payments and settlement payments for forward contract purposes. Exempts any set-offs involving such payments from: (1) the automatic stay provisions triggered by a bankruptcy petition; and (2) avoidance powers of the bankruptcy trustee.
Provides that a swap participant that receives a margin or settlement payment in connection with a swap agreement takes for value to the extent of such transfer (thus exempting such payments from scrutiny as to whether they are actually fair value for the amount used). Revises the scope of contract rights liquidating a forward contract to include rights not evidenced in writing, arising under common law, under merchant law, or by reason of normal business practice.