### Question
How is the term covered clearing obligation defined?


### Answer
The term **covered clearing obligation** is defined in *12 U.S.C. § 4402* as the following:

> an obligation of a member of a clearing organization to make payment to another member of a clearing organization, subject to a netting contract

#### Citation:
  - *12 U.S.C. § 4402*
  - Heading: **CHAPTER 45-PAYMENT SYSTEM RISK REDUCTION > SUBCHAPTER I-BILATERAL AND CLEARING ORGANIZATION NETTING**

