[Code of Federal Regulations]
[Title 17, Volume 1]
[Revised as of April 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 17CFR190.01]

[Page 610-614]
 
              TITLE 17--COMMODITY AND SECURITIES EXCHANGES
 
             CHAPTER I--COMMODITY FUTURES TRADING COMMISSION
 
PART 190_BANKRUPTCY--Table of Contents
 
Sec.  190.01  Definitions.




Sec.
190.01 Definitions.
190.02 Operation of the debtor's estate subsequent to the filing date 
          and prior to the primary liquidation date.
190.03 Operation of the debtor's estate subsequent to the primary 
          liquidation date.
190.04 Operation of the debtor's estate--general.
190.05 Making and taking delivery on commodity contracts.
190.06 Transfers.
190.07 Calculation of allowed net equity.
190.08 Allocation of property and allowance of claims.
190.09 Member property.
190.10 General.

Appendix A to Part 190--Bankruptcy Forms
Appendix B to Part 190--Special Bankruptcy Distributions

    Authority: 7 U.S.C. 1a, 2, 4a, 6c, 6d, 6g, 7a, 12, 19, and 24, and 
11 U.S.C. 362, 546, 548, 556, and 761-766, unless otherwise noted.

    Source: 48 FR 8739, Mar. 1, 1983, unless otherwise noted.


    For purposes of this part:
    (a) Account class means each of the following types of customer 
accounts which must be recognized as a separate class of account by the 
trustee: futures accounts, foreign futures accounts, leverage accounts, 
commodity option accounts and delivery accounts as defined in Sec.  
190.05(a)(2): Provided, however, That to the extent that the equity 
balance, as defined in Sec.  190.07, of a customer in a commodity 
option, as defined in Sec.  1.3(hh) of this chapter, may be commingled 
with the equity balance of such customer in any domestic commodity 
futures contract pursuant to

[[Page 611]]

regulations under the Act, the aggregate shall be treated for purposes 
of this part as being held in a futures account.
    (b) Allowed net equity means the amount calculated as allowed net 
equity in accordance with Sec.  190.07(a).
    (c) Bankruptcy Code means, except as the context of the regulations 
in this part otherwise requires, those provisions of the Bankruptcy 
Reform Act of 1978, as amended from time to time, relating to ordinary 
bankruptcies (chapters 1 through 5) and to liquidations (chapter 7 with 
the exception of subchapter III), together with the Federal rules of 
bankruptcy procedure relating thereto.
    (d) Business day means weekdays, not including Federal holidays.
    (e) Clearing organization shall have the same meaning as that set 
forth in section 761(2) of the Bankruptcy Code and shall include any 
organization which clears commodity options which are traded on or 
subject to the rules of a contract market or a board of trade.
    (f) Commodity broker means any person who is registered or required 
to register as a futures commission merchant under the Commodity 
Exchange Act including a person registered or required to be registered 
as such under Parts 32 and 33 of this chapter, and a ``commodity options 
dealer,'' ``foreign futures commission merchant,'' ``clearing 
organization,'' and ``leverage transaction merchant'' with respect to 
which there is a ``customer'' as those terms are defined in this 
section, but excluding a person registered as a futures commission 
merchant under section 4f(a)(2) of the Commodity Exchange Act.
    (g) Commodity contract shall have the same meaning, subject to 
paragraph (nn) of this section, as that set forth in section 761(4) of 
the Bankruptcy Code.
    (h) Commodity options dealer shall have the same meaning as that set 
forth in section 761(6) of the Bankruptcy Code.
    (i) Court means the bankruptcy court having jurisdiction over the 
debtor's estate.
    (j) Cover shall have the same meaning as that set forth in Sec.  
1.17(j) of this chapter.
    (k) Customer shall have the same meaning as that set forth in 
section 761(9) of the Bankruptcy Code.
    (l) Customer claim of record means a customer claim which is 
determinable solely by reference to the records of the debtor.
    (m) Customer class means each of the following two classes of 
customers which must be recognized by the trustee: public customers and 
non-public customers.
    (n) Customer property, customer estate are used interchangeably to 
mean the property subject to pro rata distribution in a commodity broker 
bankruptcy which is entitled to the priority set forth in section 766(h) 
of the Bankruptcy Code and includes certain cash, securities, and other 
property as set forth in Sec.  190.08(a).
    (o) Dealer option means an option granted, offered or sold pursuant 
to section 4c(d) of the Act and the Commission's regulations thereunder.
    (p) Debtor means an individual, association, partnership, 
corporation, or trust with respect to which a proceeding is commenced 
under subchapter IV of chapter 7 of the Bankruptcy Code.
    (q) Equity means the amount calculated as equity in accordance with 
Sec.  190.07(b)(1).
    (r) Filing date means the date a petition commencing a proceeding 
under the Bankruptcy Code is filed.
    (s) Final net equity determination date means the latest of
    (1) The day immediately following the day on which all commodity 
contracts held by or for the account of customers of the debtor have 
been transferred, liquidated or satisfied by exercise or delivery,
    (2) The day immediately following the day on which all property 
other than commodity contracts held for the account of customers has 
been transferred, returned or liquidated,
    (3) The bar date for filing customer proofs of claim, or
    (4) The day following the disposition of all disputed claims.
    (t) Foreign future shall have the same meaning as that set forth in 
section 761(11) of the Bankruptcy Code.
    (u) Foreign futures commission merchant shall have the same meaning 
as

[[Page 612]]

that set forth in section 761(12) of the Bankruptcy Code.
    (v) Funded balance means the amount calculated as funded balance in 
accordance with Sec.  190.07(c).
    (w) House account means any commodity account owned by the debtor.
    (x) In-the-money amount means:
    (1) With respect to a call option, the amount by which the value of 
the physical commodity or the contract for sale of a commodity for 
future delivery which is the subject of the option exceeds the strike 
price of the option; and
    (2) With respect to a put option, the amount by which the value of 
the physical commodity or the contract for sale of a commodity for 
future delivery which is the subject of the option is exceeded by the 
strike price of the option.
    (y) Joint account means any commodity account held by more than one 
person and includes any account of a commodity pool which is not a legal 
entity.
    (z) Leverage transaction merchant shall have the same meaning as 
that set forth in section 761(14) of the Bankruptcy Code.
    (aa) Net equity means the amount calculated as net equity in 
accordance with Sec.  190.07(b).
    (bb) Non-public customer means any person enumerated in Sec.  
1.3(y), Sec.  1.3(uu) or Sec.  31.4(e) of this chapter, who is defined 
as a customer under paragraph (k) of this section.
    (cc) Open commodity contract means a commodity contract which has 
been established in fact and which has not expired, been redeemed, been 
fulfilled by delivery or exercise, or been offset by another commodity 
contract.
    (dd) Order for relief means the filing of the petition in bankruptcy 
in a voluntary case and the adjudication of bankruptcy in an involuntary 
case.
    (ee) Premium means the amount agreed upon between the purchaser and 
seller, or their agents, for the purchase or sale of a commodity option.
    (ff) Primary liquidation date means the first business day 
immediately following the day on which all commodity contracts have been 
liquidated or transferred which are not being held open for later 
transfer in accordance with Sec.  190.03.
    (gg) Principal contract means a contract which is not traded on a 
board of trade, and includes leverage contracts and dealer options, but 
does not include transactions executed off the floor of a board of trade 
pursuant to rules approved by the Commission or rules which the board of 
trade is required to enforce, or pursuant to rules of a board of trade 
located outside the United States, its territories or possessions.
    (hh) Public customer means any person defined as a customer under 
paragraph (k) of this section except a non-public customer.
    (ii) Security shall have the same meaning as that set forth in 
section 101(36) of the Bankruptcy Code.
    (jj) Short term obligation means any security, note, or other 
obligation with a duration or maturity date of 180 days or less.
    (kk) Specifically identifiable property means:
    (1) With respect to the following property received, acquired, or 
held by or for the account of the debtor from or for the account of a 
customer to margin, guarantee or secure an open commodity contract:
    (i) Any security which as of the filing date is:
    (A) Held for the account of a customer;
    (B) Registered in such customer's name;
    (C) Not transferable by delivery; and
    (D) Not a short term obligation; or
    (ii) Any warehouse receipt, bill of lading or other document of 
title which as of the filing date:
    (A) Can be identified on the books and records of the debtor as held 
for the account of a particular customer; and
    (B) Is not in bearer form and is not otherwise transferable by 
delivery.
    (2) With respect to open commodity contracts, and except as 
otherwise provided in paragraph (kk)(7) of this section, any such 
contract which:
    (i) As of the filing date is identified on the books and records of 
the debtor as held for the account of a particular customer;

[[Page 613]]

    (ii) Is a bona fide hedging position or transaction as defined in 
Sec.  1.3(z) of this chapter or is a commodity option transaction which 
has been determined by the contract market to be economically 
appropriate to the reduction of risks in the conduct and management of a 
commercial enterprise pursuant to rules which have been adopted in 
accordance with the requirements of Sec.  1.61(b) of this chapter and 
approved by the Commission pursuant to section 5a(a)(12) of the 
Commodity Exchange Act; and
    (iii) Is in an account designated in the accounting records of the 
debtor as a hedging account in accordance with Sec.  190.04(e)(1).
    (3) With respect to warehouse receipts, bills of lading or other 
documents of title, or physical commodities received, acquired, or held 
by or for the account of the debtor for the purpose of making or taking 
delivery or exercise from or for the account of a customer, any such 
document of title or commodity which as of the entry of the order for 
relief can be identified on the books and records of the debtor as 
received from or for the account of a particular customer as held 
specifically for the purpose of delivery or exercise.
    (4) Any cash or other property deposited prior to the entry of the 
order for relief to pay for the taking of physical delivery on a long 
futures contract or for payment of the strike price upon exercise of a 
short put or a long call option contract on a physical commodity, which 
cannot be settled in cash, in excess of the amount necessary to margin 
such commodity contract prior to the notice date or exercise date, which 
cash or other property is identified on the books and records of the 
debtor as received from or for the account of a particular customer on 
or after three busines days before the first notice date or three 
business days before the exercise date specifically for the purpose of 
payment of the notice price upon taking delivery or the strike price 
upon exercise, respectively, and such customer takes delivery or 
exercises the option in accordance with the applicable contract market 
rules.
    (5) The cash price tendered for any property deposited prior to the 
entry of the order for relief to make physical delivery on a short 
futures contract or for exercise of a long put or a short call option 
contract on a physical commodity, which cannot be settled in cash, to 
the extent it exceeds the amount necessary to margin such contract prior 
to the notice date or exercise date, which property is identified on the 
books and records of the debtor as received from or for the account of a 
particular customer on or after three business days before the first 
notice date or three business days before the exercise date specifically 
for the purpose of a delivery or exercise, respectively, and such 
customer makes delivery or exercises the option in accordance with the 
applicable contract market rules.
    (6) Notwithstanding paragraph (kk)(1) of this section, fully paid, 
non-exempt securities identified on the books and records of the debtor 
as held by the debtor for or on behalf of the commodity account of a 
particular customer for which, according to such books and records as of 
the filing date, no open commodity contracts were held in the same 
capacity.
    (7) Open commodity contracts transferred in accordance with the 
provisions of Sec.  190.06.
    (8) Except as is otherwise specified in this paragraph (kk), no 
customer property may be treated as specifically identifiable property.
    (9) Notwithstanding any other provision of this paragraph (kk), 
security futures products, and any money, securities or property held to 
margin, guarantee or secure such products, or accruing as a result of 
such products, shall not be considered specifically identifiable 
property for the purposes of Subchapter IV of the Bankruptcy Code or 
this part 190, if held in a securities account.
    (ll) Strike price means the price per unit multiplied by the total 
number of units at which a person may purchase or sell the physical 
commodity or the contract of sale of a commodity for future delivery 
which is the subject of a commodity option.
    (mm) Trustee means, as appropriate, the trustee in bankruptcy 
apointed to administer the debtor's estate and any interim or successor 
trustee.

[[Page 614]]

    (nn) Leverage contract shall have the same meaning as that set forth 
in Sec.  31.4(w) of this chapter.

(Secs. 2(a), 4c, 4d, 4g, 5, 5a, 8a, 15, 19 and 20 of the Commodity 
Exchange Act, as amended by the Futures Trading Act of 1982, Pub. L. 97-
444, 96 Stat. 2294 (1983), 7 U.S.C. 2 and 4a, 6c, 6d, 6g, 7, 7a, 12a, 
19, 23 and 24 (1976 & Supp. V. 1981 and Pub. L. 97-444); secs. 761-766 
of the Bankruptcy Reform Act of 1978, as amended by the Bankruptcy Act 
Amendments, Pub. L. 97-222, 96 Stat. 235 (1982), 11 U.S.C. 761-766 
(Supp. V. 1981 as amended by Pub. L. 97-222))

[48 FR 8739, Mar. 1, 1983; 48 FR 15122 and 15123, Apr. 7, 1983, as 
amended at 48 FR 28980, June 24, 1983; 49 FR 5541, Feb. 13, 1984, 50 FR 
34617, Sept. 6, 1985; 59 FR 5704, Feb. 8, 1994; 66 FR 20745, Apr. 25, 
2001; 67 FR 58298, Sept. 13, 2002]