[Code of Federal Regulations]
[Title 17, Volume 1]
[Revised as of April 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 17CFR190.05]

[Page 623-624]
 
              TITLE 17--COMMODITY AND SECURITIES EXCHANGES
 
             CHAPTER I--COMMODITY FUTURES TRADING COMMISSION
 
PART 190_BANKRUPTCY--Table of Contents
 
Sec.  190.05  Making and taking delivery on commodity contracts.

    (a) General. (1) In the event that the trustee is unable to 
liquidate an open commodity futures contract subject to physical 
delivery or an option on a physical commodity, which cannot be settled 
in cash, prior to the last day of trading in that contract as required 
by Sec. Sec.  190.02(f)(1) and 190.03(b)(5), the trustee must use its 
best efforts to prevent property which is to be delivered for or on 
behalf of a customer to fulfill that contract, or property for which 
delivery is being taken with respect to a customer pursuant to that 
contract, from becoming part of the debtor's estate.
    (2) Delivery account shall mean any account prominently designated 
as such in the records of the debtor which contains only the 
specifically identifiable property associated with delivery set forth in 
Sec.  190.01(kk) (3), (4), and (5), except that with respect to Sec.  
190.01(kk) (4) and (5), delivery need not be made or taken and exercise 
need not be effected for such property to be included in a delivery 
account.
    (3) The portion of the price or the proceeds of a commodity contract 
upon delivery which is not specifically identifiable property under 
Sec.  190.01(kk) (4) and (5) must be distributed pro rata under section 
766(h) of the Code.
    (b) Contract market rules for deliveries on behalf of a customer of 
a debtor. Except in the case of a commodity futures or option contract 
which is settled in cash, each contract market shall adopt, maintain in 
effect and enforce rules which have been approved by the Commission in 
accordance with section 5a(a)(12) of the Act and Sec.  1.41 of this 
chapter, which:
    (1) Permit the making and taking of delivery to fulfill a commodity 
futures contract for a physical commodity or an option on a physical 
commodity, which has not become part of the debtor's estate on the date 
of the entry of the order for relief but with respect to which commodity 
contract:
    (i) Trading has ceased on the date of the entry of the order for 
relief;
    (ii) Notice of delivery has been tendered on or before the date of 
the entry of the order for relief; or,
    (iii) Trading ceases before it can be liquidated by the trustee, to 
be effected directly between the customer of the debtor and the person 
identified by the clearing organization as the party to whom delivery 
should be made or from whom delivery should be taken by such customer of 
the debtor without intervention of the trustee and without including 
such physical commodity or the payment for such physical commodity in 
any bankruptcy distribution: Provided, however, That a customer shall 
not be relieved of his obligation to make or take delivery for the sole 
reason that delivery must be made or taken from a commodity broker which 
is a debtor; and
    (2) Recognize that the equity of a customer of the debtor in a 
commodity contract upon which delivery is made or taken must be included 
in the net equity claim of that customer and, as such, can only be 
distributed pro rata at the time of, and as part of, any distributions 
to customers made by the trustee.
    (c) Delivery made or taken within the debtor's estate. (1) Any 
property in a delivery account which is part of the debtor's estate on 
the date of the order for relief may be returned under the terms set 
forth in Sec.  190.08(d)(1)(ii).
    (2) If the property to be delivered is part of the debtor's estate 
on the date of the order for relief and a customer of

[[Page 624]]

the debtor is required to make delivery, the trustee must make delivery 
in the same manner as if no bankruptcy had occurred and the party by 
whom delivery is taken must pay the full notice price or strike price 
for delivery.
    (3) If delivery is to be made or taken on behalf of a house account 
the trustee must either make or take delivery, as the case may be, on 
behalf of the debtor's estate: Provided, That if the trustee, at any 
time, takes delivery of a physical commodity, the trustee must convert 
that physical commodity to cash as promptly as possible.

(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, as amended at 48 FR 28980, June 24, 1983; 59 
FR 5704, Feb. 8, 1994]