17 CFR Part 190, Appendix A to Part 190 - Bankruptcy Forms

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View PDF at GPO Pt. 190, App. A
Appendix A to Part 190—Bankruptcy Forms
Bankruptcy Appendix Form 1—Operation of the Debtor's Estate—Schedule of Trustee's Duties
For the convenience of a prospective trustee, the Commission has constructed an approximate schedule of important duties which the trustee should perform during the early stages of a commodity broker bankruptcy proceeding. The schedule includes duties required by this part, subchapter IV of chapter 7 of the Bankruptcy Code as well as certain practical suggestions, but it is only intended to highlight the more significant duties and is not an exhaustive description of all the trustee's responsibilities. It also assumes that the commodity broker being liquidated is an FCM. Moreover, it is important to note that the operating facts in a particular bankruptcy proceeding may vary the schedule or obviate the need for any of the particular activities.
All Cases
Date of Order for Relief
1. Assure that the commodity broker has notified the Commission, its designated self-regulatory organization (“DSRO”) (if any), and all applicable clearing organizations of which it is a member that a petition or order for relief has been filed (§ 190.02(a)(1)).
2. Attempt to effectuate the transfer of entire customer accounts wherein the commodity contracts are transferred together with the money, securities, or other property margining, guaranteeing, or securing the commodity contracts (hereinafter the “transfer”).
3. Attempt to estimate shortfall of customer funds segregated pursuant to sections 4d(a) and (b) of the Act; customer funds segregated pursuant to section 4f of the Act; and the foreign futures or foreign options secured amount, as defined in § 1.3 of this chapter.
a. The trustee should:
i. Contact the DSRO (if any) and the clearing organizations and attempt to effectuate a transfer with such shortfall under section 764(b) of the Code; notify the Commission for assistance (§ 190.02(a)(2) and (e)(1), § 190.06(b)(2), (e), (f)(3), (g)(2), and (h)) but recognize that if there is a substantial shortfall, a transfer of such funds or amounts is highly unlikely.
ii. If a transfer cannot be effectuated, liquidate all customer commodity contracts that are margined, guaranteed, or secured by funds or amounts with such shortfall, except dealer options and specifically identifiable commodity contracts which are bona fide hedging positions (as defined in § 190.01(kk)(2)) with instructions not to be liquidated. (See §§ 190.02(f) and 190.06(d)(1)). (In this connection, depending upon the size of the debtor and other complications of liquidation, the trustee should be aware of special liquidation rules, and in particular the availability under certain circumstances of book-entry liquidation (§ 190.04(d)(1)(ii)).
b. If there is a small shortfall in any of the funds or amounts listed in paragraph 2, negotiate with the clearing organization to effect a transfer; notify the Commission (§§ 190.02(a)(2) and (e)(1), 190.06(b)(2), (e), (f)(3), (g)(2), and (h)).
4. Whether or not a transfer has occurred, liquidate or offset open commodity contracts not eligible for transfer (e.g., deficit accounts) (§ 190.06(e)(1)).
5. Offset all futures contracts and Cleared Swaps contracts which cannot be settled in cash and which would otherwise remain open either beyond the last day of trading (if applicable) or the first day on which notice of intent to deliver may be tendered with respect thereto, whichever occurs first; offset all long options on a physical commodity which cannot be settled in cash, have value and would be automatically exercised or would remain open beyond the last day of exercise; and offset all short options on a physical commodity which cannot be settled in cash (§ 190.02(f)(1)).
6. Compute estimated funded balance for each customer commodity contract account containing open commodity contracts (§ 190.04(b)) (daily thereafter).
7. Make margin calls if necessary (§ 190.02(g)(1)) (daily thereafter).
8. Liquidate or offset any open commodity contact account for which a customer has failed to meet a margin call (§ 190.02(f)(1)) (daily thereafter).
9. Commence liquidation or offset of specifically identifiable property described in § 190.02(f)(2)(i) (property which has lost 10% or more of value) (and as appropriate thereafter).
10. Commence liquidation or offset of property described in § 190.02(f)(3) (“all other property”).
11. Be aware of any contracts in delivery position and rules pertaining to such contracts (§ 190.05).
First Calendar Day After the Entry of an Order for Relief
1. If a transfer occurred on the date of entry of the order for relief:
a. Liquidate any remaining open commodity contracts, except any dealer option or specifically identifiable commodity contract [hedge] (See § 190.01(kk)(2) and § 190.02(f)(1)), and not otherwise transferred in the transfer.
b. Primary liquidation date for transferred or liquidated commodity contracts (§ 190.01(ff)).
2. If no transfer has yet been effected, continue attempt to negotiate transfer of open commodity contracts and dealer options (§ 190.02(c)(1)).
3. Provide the clearing organization or Collecting Futures Commission Merchant (as such term is defined in § 22.1) with assurances to prevent liquidation of open commodity contract accounts available for transfer at the customer's instruction or liquidate all open commodity contracts except those available for transfer at a customer's instruction and dealer options.
Second Calendar Day After the Entry of an Order for Relief
If no transfer has yet been effected, request directly customer instructions regarding transfer of open commodity contracts and publish notice for customer instructions regarding the return of specifically identifiable property other than commodity contracts (§§ 190.02(b) (1) and (2)).
Third Calendar Day After the Entry of an Order for Relief
1. Second publication date for customer instructions (§ 190.02(b)(1)) (publication is to be made on two consecutive days, whether or not the second day is a business day).
2. Last day on which to notify the Commission with regard to whether a transfer in accordance with section 764(b) of the Bankruptcy Code will take place (§ 190.02(a)(2) and § 190.06(e)).
Sixth Calendar Day After the Entry of an Order for Relief
Last day for customers to instruct the trustee concerning open commodity contracts (§ 190.02(b)(2)).
Seventh Calendar Day After the Entry of an Order for Relief
1. If not previously concluded, conclude transfers under § 190.06(e) and (f). (See § 190.02(e)(1) and § 190.06(g)(2)(i)(A)).
2. Transfer all open dealer option contracts which have not previously been transferred (§ 190.06(f)(3)(i)).
3. Primary liquidation date (§ 190.01(ff)) (assuming no transfers and liquidation effected for all open commodity contracts for which no customer instructions were received by the sixth calendar day).
4. Establishment of transfer accounts (§ 190.03(a)(1)) (assuming this is the primary liquidation date); mark such accounts to market (§ 190.03(a)(2)) (daily thereafter until closed).
5. Liquidate or offset all remaining open commodity contracts (§ 190.02(b)(2)).
6. If not done previously, notify customers of bankruptcy and request customer proof of claim (§ 190.02(b)(4)).
Eighth Calendar Day After the Entry of an Order for Relief
Customer instructions due to trustee concerning specifically identifiable property (§ 190.02(b)(1)).
Ninth Calendar Day After the Entry of an Order for Relief
Commence liquidation of specifically identifiable property for which no arrangements for return have been made in accordance with customer instructions (§§ 190.02(b)(1), 190.03(c)).
Tenth Calendar Day After the Entry of an Order for Relief
Complete liquidation to the extent reasonably possible of specifically identifiable property which has yet to be liquidated and for which no customer instructions have been received (§ 190.03(c)).
Separate Procedures for Involuntary Petitions for Bankruptcy
1. Within one calendar day after notice of receipt of filing of the petition in bankruptcy, the trustee should assure that proper notification has been given to the Commission, the commodity broker's designated self-regulatory organization (§ 190.02(a)(1)) (if any), and all applicable clearing organizations; margin calls should be issued if necessary (§ 190.02(g)(2)).
2. On or before the seventh calendar day after the filing of a petition in bankruptcy, the trustee should use his best efforts to effect a transfer in accordance with § 190.06(e) and (f) of all open commodity contracts and equity held for or on behalf of customers of the commodity broker (§ 190.02(e)(2)) unless the debtor can provide certain assurances to the trustee.
Bankruptcy Appendix Form 2— Request for Instructions Concerning Non-Cash Property Deposited With (Commodity Broker)
Please take notice: On (date), a petition in bankruptcy was filed by [against] (commodity broker). Those customers of (commodity broker) who deposited certain kinds of non-cash property (see below) with (commodity broker) may instruct the trustee of the estate to return their property to them as provided below.
As no customer may obtain more than his or her proportionate share of the property available to satisfy customer claims, if you instruct the trustee to return your property to you, you will be required to pay the estate, as a condition to the return of your property, an amount determined by the trustee. If your property is not margining an open contract, this amount will approximate the difference between the market value of your property and your pro rata share of the estate, as estimated by the trustee. If your property is margining an open commodity contract, this amount will be approximately the full fair market value of the property on the date of its return.
Kinds of Property to Which This Notice Applies
1. Any security deposited as margin which, as of (date petition was filed), was securing an open commodity contract and is:
—registered in your name,
—not transferrable by delivery, and
—not a short-term obligation.
2. Any fully-paid, non-exempt security held for your account in which there were no open commodity contracts as of (date petition was filed). (Rather than the return, at this time, of the specific securities you deposited with (commodity broker), you may instead request now, or at any later time, that the trustee purchase “like-kind” securities of a fair market value which does not exceed your proportionate share of the estate).
3. Any warehouse receipt, bill of lading or other document of title deposited as margin which, as of (date petition was filed), was securing an open commodity contract and—can be identified in (commodity broker)'s records as being held for your account, and—is neither in bearer form nor otherwise transferable by delivery.
4. Any warehouse receipt bill of lading or other document of title, or any commodity received, acquired or held by (commodity broker) to make or take delivery or exercise from or for your account and which—can be identified in (commodity broker)'s records as received from or for your account as held specifically for the purpose of delivery or exercise.
5. Any cash or other property deposited to make or take delivery on a commodity contract may be eligible to be returned. The trustee should be contacted directly for further information if you have deposited such property with (commodity broker) and desire its return.
Instructions must be received by (the 5th calendar day after 2d publication date) or the trustee will liquidate your property. (If you own such property but fail to provide the trustee with instructions, you will still have a claim against (commodity broker) but you will not be able to have your specific property returned to you).
Note:
Prior to receipt of your instructions, circumstances may require the trustee to liquidate your property, or transfer your property to another broker if it is margining open commodity contracts. If your property is transferred and your instructions were received within the required time, your instructions will be forwarded to the new broker.
Instructions should be directed to: (Trustee's name, address, and/or telephone).
Even if you request the return of your property, you must also pay the trustee the amount he specifies and provide the trustee with proof of your claim before (the 7th calendar day after 2d publication date) or your property will be liquidated. (Upon receipt of customer instructions to return property, the trustee will mail the sender a form which describes the information he must provide to substantiate his claim).
Note:
The trustee is required to liquidate your property despite the timely receipt of your instructions, money, and proof of claim if, for any reason, your property cannot be returned by (close of business on the 7th calendar day after 2d publication date).
Bankruptcy Appendix Form 3—Request for Instructions Concerning Transfer of Your Hedge Contracts Held by (Commodity Broker)
United States Bankruptcy Court __District of __In re __, Debtor, No. __.
Please take notice: On (date), a petition in bankruptcy was filed by [against] (commodity broker).
You indicated when your hedge account was opened that the commodity contracts in your hedge account should not be liquidated automatically in the event of the bankruptcy of (commodity broker), and that you wished to provide instructions at this time concerning their disposition.
Instructions to transfer your commodity contracts and a cash deposit (as described below) must be received by the trustee by (the 6th calendar day after entry of order for relief) or your commodity contracts will be liquidated.
If you request the transfer of your commodity contracts, prior to their transfer, you must pay the trustee in cash an amount determined by the trustee which will approximate the difference between the value of the equity margining your commodity contracts and your pro rata share of the estate plus an amount constituting security for the nonrecovery of any overpayments. In your instructions, you should specify the broker to which you wish your commodity contracts transferred.
Be further advised that prior to receipt of your instructions, circumstances may, in any event, require the trustee to liquidate or transfer your commodity contracts. If your commodity contracts are so transferred and your instructions are received, your instructions will be forwarded to the new broker.
Note also that the trustee is required to liquidate your positions despite the timely receipt of your instructions and money if, for any reason, you have not made arrangements to transfer and/or your contracts are not transferred by (7 calendar days after entry of order for relief).
Instructions should be sent to: (Trustee's or designee's name, address, and/or telephone). [Instructions may also be provided by phone].
Bankruptcy Appendix Form 4—Proof of Claim
[Note to trustee: As indicated in § 190.02(d), this form is provided as a guide to the trustee and should be modified as necessary depending upon the information which the trustee needs at the time a proof of claim is requested and the time provided for a response.]
Proof of Claim
United States Bankruptcy Court __District of __In re __, Debtor, No. __.
Return this form by __ or your claim will be barred (unless extended, for good cause only).
I. [If claimant is an individual claiming for himself] The undersigned, who is the claimant herein, resides at __.
[If claimant is a partnership claiming through a member] The undersigned, who resides at __, is a member of __, a partnership, composed of the undersigned and __, of __, and doing business at __, and is duly authorized to make this proof of claim on behalf of the partnership.
[If claimant is a corporation claiming though a duly authorized officer] The undersigned, who resides at __ is the __ of __, a corporation organized under the laws of __ and doing business at __, and is duly authorized to make this proof of claim on behalf of the corporation.
[If claim is made by agent] The undersigned, who resides at __, is the agent of __, and is duly authorized to make this proof of claim on behalf of the claimant.
II. The debtor was, at the time of the filing of the petition initiating this case, and still is, indebted to this claimant for the total sum of $ __.
III. List EACH account on behalf of which a claim is being made by number and name of account holder[s], and for EACH account, specify the following information:
a. Whether the account is a futures, foreign futures, leverage, option (if an option account, specify whether exchange-traded, dealer or cleared swap), “delivery” account, or a cleared swaps account. A “delivery” account is one which contains only documents of title, commodities, cash, or other property identified to the claimant and deposited for the purposes of making or taking delivery on a commodity underlying a commodity contract or for payment of the strike price upon exercise of an option.
b. The capacity in which the account is held, as follows (and if more than one is applicable, so state):
1. [The account is held in the name of the undersigned in his individual capacity];
2. [The account is held by the undersigned as guardian, custodian, or conservator for the benefit of a ward or a minor under the Uniform Gift to Minors Act];
3. [The account is held by the undersigned as executor or administrator of an estate];
4. [The account is held by the undersigned as trustee for the trust beneficiary];
5. [The account is held by the undersigned in the name of a corporation, partnership, or unincorporated association];
6. [The account is held as an omnibus customer account of the undersigned futures commission merchant];
7. [The account is held by the undersigned as part owner of a joint account];
8. [The account is held by the undersigned in the name of a plan which, on the date the petition in bankruptcy was filed, had in effect a registration statement in accordance with the requirements of § 1031 of the Employee Retirement Income Security Act of 1974 and the regulations thereunder]; or
9. [The account is held by the undersigned as agent or nominee for a principal or beneficial owner (and not described above in items 1-8 of this II, b)].
10. [The account is held in any other capacity not described above in items 1-9 of this II, b. Specify the capacity].
c. The equity, as of the date the petition in bankruptcy was filed, based on the commodity contracts in the account.
d. Whether the person[s] (including a general partnership, limited partnership, corporation, or other type of association) on whose behalf the account is held is one of the following persons OR whether one of the following persons, alone or jointly, owns 10% or more of the account:
1. [If the debtor is an individual—
A. Such individual;
B. Relative (as defined below in item 8 of this III.d) of the debtor or of a general partner of the debtor;
C. Partnership in which the debtor is a general partner;
D. General partner of the debtor; or
E. Corporation of which the debtor is a director, officer, or person in control];
2. [If the debtor is a partnership—
A. Such partnership;
B. General partner in the debtor;
C. Relative (as defined in item 8 of this III.d) of a general partner in, general partner of, or person in control of the debtor;
D. Partnership in which the debtor is a general partner;
E. General partner of the debtor; or
F. Person in control of the debtor];
3. [If the debtor is a limited partnership—
A. Such limited partnership;
B. A limited or special partner in such partnership whose duties include:
i. The management of the partnership business or any part thereof;
ii. The handling of the trades or customer funds of customers of such partnership;
iii. The keeping of records pertaining to the trades or customer funds of customers of such partnership; or
iv. The signing or co-signing of checks or drafts on behalf of such partnership];
4. [If the debtor is a corporation or association (except a debtor which is a futures commission merchant and is also a cooperative association of producers)—
A. Such corporation or association;
B. Director of the debtor;
C. Officer of the debtor;
D. Person in control of the debtor;
E. Partnership in which the debtor is a general partner;
F. General partner of the debtor;
G. Relative (as defined in item 8 of this III.d) of a general partner, director, officer, or person in control of the debtor;
H. An officer, director or owner of ten percent or more of the capital stock of such organization];
5. [If the debtor is a futures commission merchant which is a cooperative association of producers—
Shareholder or member of the debtor which is an officer, director or manager];
6. [An employee of such individual, partnership, limited partnership, corporation or association whose duties include:
A. The management of the business of such individual, partnership, limited partnership, corporation or association or any part thereof;
B. The handling of the trades or customer funds of customers of such individual, partnership, limited partnership, corporation or association;
C. The keeping of records pertaining to the trades or funds of customers of such individual, partnership, limited partnership, corporation or association; or
D. The signing or co-signing of checks or drafts on behalf of such individual, partnership, limited partnership, corporation or association];
7. [Managing agent of the debtor];
8. [A spouse or minor dependent living in the same household of ANY OF THE FOREGOING PERSONS, or any other relative, regardless of residency, (unless previously described in items 1-B, 2-C, or 4-G of this III.d) defined as an individual related by affinity or consanguinity within the third degree as determined by the common law, or individual in a step or adoptive relationship within such degree];
9. [“Affiliate” of the debtor, defined as:
A. Entity that directly or indirectly owns, controls, or holds with power to vote, 20 percent or more of the out-standing voting securities of the debtor, other than an entity that holds such securities—
i. In a fiduciary or agency capacity without sole discretionary power to vote such securities; or
ii. Solely to secure a debt, if such entity has not in fact exercised such power to vote;
B. Corporation 20 percent or more of whose outstanding voting securities are directly or indirectly owned, con-trolled, or held with power to vote, by the debtor, or by an entity that directly or indirectly owns, controls, or holds with power to vote, 20 percent or more of the outstanding voting securities of the debtor, other than an entity that holds such securities—
i. In a fiduciary or agency capacity without sole discretionary power to vote such securities; or
ii. Solely to secure a debt, if such entity has not in fact exercised such power to vote;
C. Person whose business is operated under a lease or operating agreement by the debtor, or person substantially all of whose property is operated under an operating agreement with the debtor;
D. Entity that otherwise, directly or indirectly, is controlled by or is under common control with the debtor];
E. Entity that operates the business or all or substantially all of the property of the debtor under a lease or operating agreement; or
F. Entity that otherwise, directly or indirectly, controls the debtor; or
10. [Any of the persons listed in items 1-7 above of this III.d if such person is associated with an affiliate (see item 9 above) of the debtor as if the affiliate were the debtor].
e. Whether the account is a discretionary account. (If it is, the name in which the “attorney in fact” is held).
f. If the account is a joint account, the amount of the claimant's percentage interest in the account. (Also specify whether participants in a joint account are claiming separately or jointly).
g. Whether the claimant's positions in security futures products are held in a futures account or securities account, as those terms are defined in § 1.3 of this chapter.
IV. Describe all claims against the debtor not based upon a commodity contract account of the claimant (e.g., if landlord, for rent; if customer, for misrepresentation or fraud).
V. Describe all claims of the DEBTOR against the CLAIMANT not already included in the equity of a commodity contract account[s] of the claimant (see III.c above).
VI. Describe any deposits of money, securities or other property held by or for the debtor from or for the claimant, and indicate if any of this property was included in your answer to III.c above.
VII. Of the money, securities, or other property described in VI above, identify any which consists of the following:
a. With respect to property received, acquired, or held by or for the account of the debtor from or for the account of the claimant to margin, guarantee or secure an open commodity contract, the following:
1. Any security which as of the filing date is:
A. Held for the claimant's account;
B. Registered in the claimant's name;
C. Not transferable by delivery; and
D. Not a short term obligation; or
2. 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 the claimant; and
B. Is not in bearer form and is not otherwise transferable by delivery.
b. With respect to open commodity contracts, and except as otherwise provided below in item g of this VII, any such contract which:
1. As of the date the petition in bankruptcy was filed, is identified on the books and records of the debtor as held for the account of the claimant;
2. Is a bona fide hedging position or transaction as defined in Rule 1.3 of the Commodity Futures Trading Commission (“CFTC”) or is a commodity option transaction which has been determined by a registered entity to be economically appropriate to the reduction of risks in the conduct and management of a commercial enterprise pursuant to rules which have been approved by the CFTC pursuant to section 5c(c) of the Commodity Exchange Act;
3. Is in an account designated in the accounting records of the debtor as a hedging account.
c. 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 claimant's account, any such document of title or commodity which as of the filing date can be identified on the books and records of the debtor as received from or for the account of the claimant specifically for the purpose of delivery or exercise.
d. Any cash or other property deposited prior to bankruptcy to pay for the taking of physical delivery on a long commodity 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 the claimant within three or less days of the notice date or three or less days of the exercise date specifically for the purpose of payment of the notice price upon taking delivery or the strike price upon exercise.
e. The cash price tendered for any property deposited prior to bankruptcy to make physical delivery on a short commodity 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 exercise date which property is identified on the books and records of the debtor as received from or for the account of the claimant within three or less days of the notice date or of the exercise date specifically for the purpose of a delivery or exercise.
f. 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 contract account of the claimant for which, according to such books and records as of the filing date, no open commodity contracts were held in the same capacity.
g. Open commodity contracts transferred to another futures commission merchant by the trustee.
VIII. Specify whether the claimant wishes to receive payment in kind, to the extent possible, for any claim for securities.
IX. Attach copies of any documents which support the information provided in this proof of claim, including but not limited to customer confirmations, account statements, and statements of purchase or sale.
This proof of claim must be filed with the trustee no later than __, or your claim will be barred unless an extension has been granted, available only for good cause.
Return this form to:
(Trustee's name (or designee's) and address)
Dated:
(Signed)
Penalty for Presenting Fraudulent Claim. Fine of not more than $5,000 or imprisonment for not more than five years or both—Title 18, U.S.C. 152.
(Approved by the Office of Management and Budget under control number 3038-0021)
[77 FR 6382, Feb. 7, 2012]

Title 17 published on 2014-04-01

no entries appear in the Federal Register after this date.