With no explanation, chose the best option from "A", "B", "C" or "D". those portions of the same report indicating that §§ 365 and 502(b)(6) apply only to true leases. Compliance with local law is necessaiy to create the lien that gives rise to any security interest. As a result, to be considered a security interest under the Bankruptcy Code, a lease must constitute a lien under local law. It is certainly possible for a given agreement to fall outside the coverage of § 365, because it is not a true lease, and also fail to confer a "security interest” because the requirements of local law for creation of a lien have not been satisfied. Because the Bankruptcy Code itself uses "lease” in § 365 to mean a true lease, state law should not be used to reach a contrary result. See Perez v. Campbell, 402 U.S. 637, 652-53, 91 S.Ct. 1704, 29 L.Ed.2d 233 (1971) (<HOLDING>). 7 . The UCC definition of "security interest”

A: recognizing that the supremacy clause is not a source of any federal rights
B: holding an illinois statute and regulation that conflicted with the social security act invalid under the supremacy clause
C: holding in a bankruptcy context that any state legislation which frustrates the full effectiveness of federal law is rendered invalid by the supremacy clause
D: holding the illinois statute at issue in templeton invalid under the supremacy clause
C.