17 CFR 190.06 - Transfers.
(a)
Transfer rules.
No self-regulatory organization or clearing organization may adopt, maintain in effect or enforce rules which:
(2)
Interfere with the acceptance by its members of open commodity contracts and the equity margining or securing such contracts from futures commission merchants, or persons which are required to be registered as futures commission merchants, which are required to transfer accounts pursuant to § 1.17(a)(4) of this chapter; or
(3)
Prevent the acceptance by its members of transfers of open commodity contracts and the equity margining or securing such contracts from futures commission merchants with respect to which a petition in bankruptcy has been filed, if such transfers have been approved by the Commission.
Provided, however, That this paragraph shall not limit the exercise of any contractual right of a self-regulatory organization or clearing organization to liquidate open commodity contracts.
(b)
Notice.
Unless notice has been filed pursuant to § 1.65(b) of this chapter, if a futures commission merchant, or a person required to be registered as a futures commission merchant, intends to transfer commodity contracts held by or for a commodity broker from or for the account of a customer to another person registered as a futures commission merchant after a petition in bankruptcy has been filed by or against such commodity broker, the transferor must notify the Commission no later than is required under § 190.02(a)(2).
(1)
No transfer may be made which would cause the transferee to be in violation of the minimum financial requirements set forth in this chapter.
(2)
A transferee may accept a transfer of open commodity contracts even though the money, securities and other property eligible for transfer under the regulations contained in this part is insufficient to fully margin such positions, if the transferee agrees to accept the transfer subject to any loss due to the failure to recover such deficiency from the customers whose contracts it has accepted or from the estate of the debtor.
(3)
The transferee of a commodity contract for which notice is given under § 190.06(b)(2) must keep that contract open one business day after its receipt, unless the customer for whom the transfer is made fails to respond within a reasonable time to a margin call for the difference between the margin transferred with such contract and the margin which such transferee would require with respect to a similar commodity contract held for the account of a customer in the ordinary course of business.
(4)
No commission may be collected by the transferor with respect to the transfer of an open commodity contract for which notice is given under § 190.06(b)(2).
(1)
Customer instructions.
A commodity broker must provide an opportunity for each customer to specify when undertaking its first hedging contract whether, in the event of bankruptcy, such customer prefers that open commodity contracts held in a hedging account be liquidated by the trustee without seeking customer instructions. Such commodity broker may obtain evidence of the customer instructions as provided in § 1.55(d) of this chapter.
(2)
Record of customer instructions.
Each futures commission merchant must indicate prominently in the accounting records in which it maintains open trade balances any customer accounts which are hedging accounts for which the customer has not specified that it prefers open contracts to be liquidated in bankruptcy by the trustee without instruction.
(1)
Accounts eligible for transfer.
Subject to the requirements of paragraph (e)(2) of this section, all accounts are eligible for transfer after the filing date pursuant to section 764(b) of the Bankruptcy Code, except:
(i)
House accounts or the accounts of general partners of the debtor if the debtor is a partnership;
(ii)
Leverage accounts, if the debtor is the leverage transaction merchant with respect to such accounts;
(iii)
Dealer option accounts, if the debtor is the dealer option grantor with respect to such accounts;
(2)
Amount of equity which may be transferred.
In no case may money, securities or property be transferred in respect of any eligible account if the value of such money, securities or property would exceed the funded balance of such account based on available information as of the close of business on the business day immediately preceding transfer less the value on the date of return or transfer of any property previously returned or transferred with respect thereto.
(1)
Dealer options—
Prior to exercise, any dealer option contract held by or for the account of a debtor which is a futures commission merchant from or for the account of a customer may be transferred even if the funded balance available for transfer which is attributable to such contract does not equal 100% of the portion of the purchase price required to be segregated with respect to such contract: Provided, That a dealer option contract will be eligible for transfer only if any deficiency in the funded balance of the customer account in which it is held is not due to amounts owed by such customer to the debtor; and, Provided further, That the transferee of any dealer option contract need not segregate more than an amount equal to that portion of the purchase price due the grantor which is transferred with the contract which should be equal to the grantor's funded balance in the portion of the purchase price segregated less any reasonable reserve established by the trustee for the nonrecovery of overpayments.
(ii)
Obligation of the dealer option grantor.
In the event of the transfer of a dealer option contract pursuant to this section, the failure of the debtor futures commission merchant to segregate 100% of the purchase price due the grantor for such contract, or the failure of the dealer option grantor to collect 100% of such purchase price due the grantor, shall not excuse the dealer option grantor from its obligation to perform such contract in full upon its exercise, without any setoff or set aside for the premium deficiency.
(2)
Clearing organizations.
Commodity contracts held by a clearing organization which is a debtor may not be transferred.
(i)
Of the customer estate.
If all eligible customer accounts held by a debtor cannot be transferred under this section, a partial transfer may nonetheless be made. The Commission will not disapprove such a transfer for the sole reason that it was a partial transfer if it would prefer the transfer of accounts, the liquidation of which could adversely affect the market or the bankrupt estate. Any dealer option contract held by or for the account of a debtor which is a futures commission merchant from or for the account of a customer which has not previously been transferred, and is eligible for transfer, must be transferred on or before the close of business on the tenth business day after entry of the order for relief.
(ii)
Of a customer account.
If all of a customer's open commodity contracts cannot be transferred under this section, a partial transfer of contracts may be made. A partial transfer may be effected by liquidating that portion of the open commodity contracts held by a customer which represents sufficient equity to permit the transfer of the remainder. If any commodity contracts to be transferred in a partial transfer are part of a spread or straddle, both sides of such spread or straddle must be transferred or neither side may be transferred.
(1)
Pre-relief transfers.
Notwithstanding the provisions of paragraph (e) of this section, the following transfers may not be avoided by a trustee:
(i)
The transfer of commodity accounts prior to the entry of the order for relief in compliance with § 1.17(a)(4) of this chapter unless such transfer is disapproved by the Commission; or
(ii)
The transfer prior to the order for relief by a public customer, including a transfer by a public customer which is a commodity broker, of commodity accounts held from or for the account of such customer by or on behalf of the debtor unless:
(A)
The customer acted in collusion with the debtor or its principals to obtain a greater share of the bankrupt estate than that to which it would be entitled in a bankruptcy distribution; or
(2)
Post-relief transfers.
On or after the entry of the order for relief, the following transfers to one or more transferees may not be avoided by the trustee:
(i)
The transfer of a customer account eligible to be transferred under paragraph (e) or (f) of this section made by the trustee of the commodity broker or by any self-regulatory organization or clearing organization of the commodity broker:
(A)
On or before the close of business on the fourth business day after the entry of the order for relief; and
(B)
The Commission is notified in accordance with § 190.02(a)(2) prior to the transfer and does not disapprove the transfer; or
(ii)
The transfer of a customer account at the direction of the Commission on or before the close of business on the fourth business day after the order for relief upon such terms and conditions as the Commission may deem appropriate and in the public interest.
(3)
Withdrawals prior to bankruptcy.
The withdrawal or settlement of a commodity account by a public customer including a public customer which is a commodity broker, prior to the filing date may not be avoided by a trustee unless:
(i)
The customer making the withdrawal or settlement acted in collusion with the debtor or its principals to obtain a greater share of the bankruptcy estate than that to which such customer would be entitled in a bankruptcy distribution; or
(h)
Commission action.
Notwithstanding any other provision of this section, in appropriate cases and to protect the public interest, the Commission may:
[48 FR 8739, Mar. 1, 1983; 48 FR 15122 and 15123, Apr. 7, 1983; 58 FR 17505, Apr. 5, 1993]
§ 190.07, Nt.
Effective Date Note:
At 77 FR 6381, Feb. 7, 2012, § 190.07 was amended by removing paragraph (e)(1)(iv) and redesignate paragraph (e)(1)(v) as (e)(1)(iv); revise paragraphs (a), (e)(1)(iii), (e)(2), (f)(3)(i), (g)(2) and add paragraph (g)(1)(iii), effective April 9, 2012. For the convenience of the user, the added and revised text is set forth as follows:
§ 190.06
Transfers.
(a) Transfer rules. No clearing organization or other self-regulatory organization may adopt, maintain in effect or enforce rules which:
(1) Are inconsistent with the provisions of this part;
(2) Interfere with the acceptance by its members of open commodity contracts and the equity margining or securing such contracts from futures commission merchants, or persons which are required to be registered as futures com-mission merchants, which are required to transfer accounts pursuant to § 1.17(a)(4) of this chapter; or
(3) Prevent the acceptance by its members of transfers of open commodity contracts and the equity margining or securing such contracts from futures commission merchants with respect to which a petition in bankruptcy has been filed, if such transfers have been approved by the Commission. Provided, however, that this paragraph shall not limit the exercise of any contractual right of a clearing organization or other registered entity to liquidate open commodity contracts.
(e) * * *
(1) * * *
(iii) Dealer option accounts, if the debtor is the dealer option grantor with respect to such accounts; or
(2) Amount of equity which may be transferred. In no case may money, securities or property be transferred in respect of any eligible account if the value of such money, securities or property would exceed the funded balance of such account based on available information as of the calendar day immediately preceding transfer less the value on the date of return or transfer of any property previously returned or transferred with respect thereto.
(f) * * *
(3) * * *
(i) Of the customer estate. If all eligible customer accounts held by a debtor cannot be transferred under this section, a partial transfer may nonetheless be made. The Commission will not disapprove such a transfer for the sole reason that it was a partial transfer if it would prefer the transfer of accounts, the liquidation of which could adversely affect the market or the bankrupt estate. Any dealer option contract held by or for the account of a debtor which is a futures commission merchant from or for the account of a customer which has not previously been transferred, and is eligible for transfer, must be transferred on or before the seventh calendar day after entry of the order for relief.
(g) * * *
(1) * * *
(iii) The transfer prior to the order for relief by a clearing organization of one or more accounts held for or on behalf of customers of the debtor, provided that (I) the money, securities, or other property accompanying such transfer did not exceed the funded balance of each account based on available information as of the close of business on the business day immediately preceding such transfer less the value on the date of return or transfer of any property previously returned or transferred thereto, and (II) the transfer is not disapproved by the Commission.
(2) Post-relief transfers. On or after the entry of the order for relief, the following transfers to one or more transferees may not be avoided by the trustee:
(i) The transfer of a customer account eligible to be transferred under paragraph (e) or (f) of this section made by the trustee of the commodity broker or by any self-regulatory organization of the commodity broker:
(A) On or before the seventh calendar day after the entry of the order for relief; and
(B) The Commission is notified in accordance with § 190.02(a)(2) prior to the transfer and does not disapprove the transfer; or
(ii) The transfer of a customer account at the direction of the Commission on or before the seventh calendar day after the order for relief upon such terms and conditions as the Commission may deem appropriate and in the public interest.
Title 17 published on 2012-04-01
The following are only the Rules published in the Federal Register after the published date of Title 17.
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Title 17 published on 2012-04-01
The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 17 CFR 190 after this date.
