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2001 U.S. Code
Title 12 - BANKS AND BANKING
CHAPTER 45 - PAYMENT SYSTEM RISK REDUCTION
SUBCHAPTER I - BILATERAL AND CLEARING ORGANIZATION NETTING
Sec. 4404 - Clearing organization netting

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Metadata
Publication TitleUnited States Code, 2000 Edition, Supplement 1, Title 12 - BANKS AND BANKING
CategoryBills and Statutes
CollectionUnited States Code
SuDoc Class NumberY 1.2/5:
Contained WithinTitle 12 - BANKS AND BANKING
CHAPTER 45 - PAYMENT SYSTEM RISK REDUCTION
SUBCHAPTER I - BILATERAL AND CLEARING ORGANIZATION NETTING
Sec. 4404 - Clearing organization netting
Containssection 4404
Date2001
Laws in Effect as of DateJanuary 22, 2002
Positive LawNo
Dispositionstandard
Source CreditPub. L. 102-242, title IV, §404, Dec. 19, 1991, 105 Stat. 2374.
Statutes at Large Reference105 Stat. 2374
Public Law ReferencePublic Law 102-242

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§4404. 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 in accordance with, and subject to the conditions of, the applicable netting contract.

(f) Limitation on claims for entitlement

A failed member of a clearing organization shall have no recognizable claim against any member of a clearing organization for any amount based on such covered contractual payment entitlements other than its net entitlement.

(g) Effectiveness notwithstanding status as member

This section shall be given effect notwithstanding that a member is a failed member.

(Pub. L. 102–242, title IV, §404, Dec. 19, 1991, 105 Stat. 2374.)

Section Referred to in Other Sections

This section is referred to in section 4405 of this title.

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