§ 27c. — Exclusion of certain other identified banking products.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 7USC27c]
TITLE 7--AGRICULTURE
CHAPTER 1--COMMODITY EXCHANGES
Sec. 27c. Exclusion of certain other identified banking products
(a) In general
No provision of the Commodity Exchange Act [7 U.S.C. 1 et seq.]
shall apply to, and the Commodity Futures Trading Commission shall not
exercise regulatory authority with respect to, a banking product if the
product is a hybrid instrument that is predominantly a banking product
under the predominance test set forth in subsection (b) of this section.
(b) Predominance test
A hybrid instrument shall be considered to be predominantly a
banking product for purposes of this section if--
(1) the issuer of the hybrid instrument receives payment in full
of the purchase price of the hybrid instrument substantially
contemporaneously with delivery of the hybrid instrument;
(2) the purchaser or holder of the hybrid instrument is not
required to make under the terms of the instrument, or any
arrangement referred to in the instrument, any payment to the issuer
in addition to the purchase price referred to in paragraph (1),
whether as margin, settlement payment, or otherwise during the life
of the hybrid instrument or at maturity;
(3) the issuer of the hybrid instrument is not subject by the
terms of the instrument to mark-to-market margining requirements;
and
(4) the hybrid instrument is not marketed as a contract of sale
of a commodity for future delivery (or option on such a contract)
subject to the Commodity Exchange Act [7 U.S.C. 1 et seq.].
(c) Mark-to-market margining requirement
For purposes of subsection (b)(3) of this title, mark-to-market
margining requirements shall not include the obligation of an issuer of
a secured debt instrument to increase the amount of collateral held in
pledge for the benefit of the purchaser of the secured debt instrument
to secure the repayment obligations of the issuer under the secured debt
instrument.
(Pub. L. 106-554, Sec. 1(a)(5) [title IV, Sec. 405], Dec. 21, 2000, 114
Stat. 2763, 2763A-459.)
References in Text
The Commodity Exchange Act, referred to in subsecs. (a) and (b)(4),
is act Sept. 21, 1922, ch. 369, 42 Stat. 998, as amended, which is
classified generally to this chapter. For complete classification of
this Act to the Code, see section 1 of this title and Tables.
Codification
Section was enacted as part of the Legal Certainty for Bank Products
Act of 2000, and also as part of the Commodity Futures Modernization Act
of 2000, and not as part of the Commodity Exchange Act which comprises
this chapter.
Section Referred to in Other Sections
This section is referred to in sections 1a, 2, 7a-1, 16, 27, 27d,
27f of this title; title 15 section 78c.
