H.R. 5585, The Financial Netting Improvements Act of 2006

On October 3, 2006, the New York office authored an alert memorandum entitled, “H.R. 5585, The Financial Netting Improvements Act of 2006.” The U.S. Senate recently passed H.R. 5585, the Financial Netting Improvements Act of 2006 (the “Act”), which is expected to be passed by the House of Representatives and signed into law by President Bush later this year. The Act amends various federal statutes to clarify further the protections available to certain financial contracts upon the insolvency of a counterparty. The alert briefly summarizes the more significant amendments to be made by the Act. Copies of the Act and its legislative history are also attached.