section_id,title_number,title_name,chapter,subchapter,part_number,part_name,subpart,subpart_name,section_number,section_heading,agency,authority,source_citation,amendment_citations,full_text 17:17:2.0.1.1.33.1.1.1,17,Commodity and Securities Exchanges,I,,190,PART 190—BANKRUPTCY RULES,A,Subpart A—General Provisions,,"§ 190.00 Statutory authority, organization, core concepts, scope, and construction.",CFTC,,,,"(a) Statutory authority. The Commission has adopted the regulations in this part pursuant to its authority under sections 8a(5) and 20 of the Act. Section 8a(5) provides general rulemaking authority to effectuate the provisions and accomplish the purposes of the Act. Section 20 provides that the Commission may, notwithstanding title 11 of the United States Code, adopt certain rules or regulations governing a proceeding involving a commodity broker that is a debtor under subchapter IV of chapter 7 of the Bankruptcy Code. Specifically, the Commission is authorized to adopt rules or regulations specifying: (1) That certain cash, securities, or other property, or commodity contracts, are to be included in or excluded from customer property or member property; (2) That certain cash, securities, or other property, or commodity contracts, are to be specifically identifiable to a particular customer in a particular capacity; (3) The method by which the business of the commodity broker is to be conducted or liquidated after the date of the filing of the petition under chapter 7 of the Bankruptcy Code, including the payment and allocation of margin with respect to commodity contracts not specifically identifiable to a particular customer pending their orderly liquidation; (4) Any persons to which customer property and commodity contracts may be transferred under section 766 of the Bankruptcy Code; and (5) How a customer's net equity is to be determined. (b) Organization. This part is organized into three subparts. This subpart contains general provisions applicable in all cases. Subpart B of this part contains provisions that apply when the debtor is a futures commission merchant (as that term is defined in the Act or Commission regulations). This includes acting as a foreign futures commission merchant, as defined in section 761(12) of the Bankruptcy Code, but excludes a person that is “notice-registered” as a futures commission merchant pursuant to section 4f(a)(2) of the Act. Subpart C contains provisions that apply when the debtor is registered as a derivatives clearing organization under the Act. (c) Core concepts. The regulations in this part reflect several core concepts. The descriptions of core concepts in paragraphs (c)(1) through (6) of this section are subject to the further specific requirements set forth in this part, and the specific requirements in this part should be interpreted and applied consistently with these core concepts. (1) Commodity brokers. Subchapter IV of chapter 7 of the Bankruptcy Code applies to a debtor that is a commodity broker, against which a customer holds a “net equity” claim relating to a commodity contract. This part is limited to a commodity broker that is: (i) A futures commission merchant; or (ii) A derivatives clearing organization registered under the Act and § 39.3 of this chapter. (2) Account classes. The Act and Commission regulations in parts 1, 22, and 30 of this chapter provide differing treatment and protections for different types of cleared commodity contracts. This part establishes three account classes that correspond to the different types of accounts that futures commission merchants and clearing organizations are required to maintain under the regulations in the preceding sentence, specifically, the futures account class (including options on futures), the foreign futures account class (including options on foreign futures), and the cleared swaps account class (including cleared options other than options on futures or foreign futures). This part also establishes a fourth account class, the delivery account class (which may be further subdivided as provided in this part), for property held in an account designated within the books and records of the debtor as a delivery account, for effecting delivery under commodity contracts whose terms require settlement via delivery when the commodity contract is held to expiration or, in the case of a cleared option, is exercised. (3) Public customers and non-public customers; Commission segregation requirements; member property —(i) Public customers and non-public customers. This part prescribes separate treatment of “public customers” and “non-public customers” (as these terms are defined in § 190.01) within each account class in the event of a proceeding under this part in which the debtor is a futures commission merchant. Public customers of a debtor futures commission merchant are entitled to a priority in the distribution of cash, securities, or other customer property over non-public customers, and both have priority over all other claimants (except for claims relating to the administration of customer property) pursuant to section 766(h) of the Bankruptcy Code. (A) The cash, securities, or other property held on behalf of the public customers of a futures commission merchant in the futures, foreign futures, or cleared swaps account classes are subject to special segregation requirements imposed under parts 1, 22, and 30 of this chapter for each account class. Although such segregation requirements generally are not applicable to cash, securities, or other property received from or reflected in the futures, foreign futures, or cleared swaps accounts of non-public customers of a futures commission merchant, such transactions and property are customer property within the scope of this part. (B) While parts 1, 22, and 30 of this chapter do not impose special segregation requirements with respect to treatment of cash, securities, or other property of public customers carried in a delivery account, such property does constitute customer property. Thus, the distinction between public and non-public customers is, given the priority for public customers in section 766(h) of the Bankruptcy Code, relevant for the purpose of making distributions to delivery account class customers pursuant to this part. (C) Where a provision in this part affords the trustee discretion, that discretion should be exercised in a manner that the trustee determines will best achieve the overarching goal of protecting public customers as a class by enhancing recoveries for, and mitigating disruptions to, public customers as a class. In seeking to achieve that overarching goal, the trustee has discretion to balance those two sub-goals when they are in tension. Where the trustee is directed to exercise “reasonable efforts” to meet a standard, those efforts should only be less than “best efforts” to the extent that the trustee determines that such an approach would support the foregoing goals. (ii) Clearing organization bankruptcies: Member property and customer property other than member property. For a clearing organization, “customer property” is divided into “member property” and “customer property other than member property.” The term member property is used to identify the cash, securities, or property available to pay the net equity claims of clearing members based on their house account at the clearing organization. Thus, in the event of a proceeding under this part in which the debtor is a clearing organization, the classification of customers as public customers or non-public customers also is relevant, in that each member of the clearing organization will have separate claims against the clearing organization (by account class) with respect to: (A) Commodity contract transactions cleared for its own account or on behalf of any of its non-public customers (which are cleared in a “house account” at the clearing organization); and (B) Commodity contract transactions cleared on behalf of any public customers of the clearing member (which are cleared in accounts at the clearing organization that is separate and distinct from house accounts). (iii) Preferential assignment among customer classes and account classes for clearing organization bankruptcies. Section 190.18 is designed to support the interests of public customers of members of a debtor that is a clearing organization. (A) Certain customer property is preferentially assigned to “customer property other than member property” instead of “member property” to the extent that there is a shortfall in funded balances for members' public customer claims. Moreover, to the extent that there are excess funded balances for members' claims in any customer class/account class combination, that excess is also preferentially assigned to “customer property other than member property” to the extent of any shortfall in funded balances for members' public customer claims. (B) Where property is assigned to a particular customer class with more than one account class, it is assigned to the account class for which the funded balance percentage is the lowest until there are two account classes with equal funded balance percentages, then to both such account classes, keeping the funded balance percentage the same, and so forth following the analogous approach if the debtor has more than two account classes within the relevant customer class. (4) Porting of public customer commodity contract positions. In a proceeding in which the debtor is a futures commission merchant, this part sets out a policy preference for transferring to another futures commission merchant, or “porting,” open commodity contract positions of the debtor's public customers along with all or a portion of such customers' account equity. Porting mitigates risks to both the customers of the debtor futures commission merchant and to the markets. To facilitate porting, this part addresses the manner in which the debtor's business is to be conducted on and after the filing date, with specific provisions addressing the collection and payment of margin for open commodity contract positions prior to porting. (5) Pro rata distribution. (i) The commodity broker provisions of the Bankruptcy Code, subchapter IV of chapter 7, in particular section 766(h), have long revolved around the principle of pro rata distribution. If there is a shortfall in the cash, securities or other property in a particular account class needed to satisfy the net equity claims of public customers in that account class, the customer property in that account class will be distributed pro rata to those public customers (subject to appendix B of this part). Any customer property not attributable to a specific account class, or that exceeds the amount needed to pay allowed customer net equity claims in a particular account class, will be distributed to public customers in other account classes so long as there is a shortfall in those other classes. Non-public customers will not receive any distribution of customer property so long as there is any shortfall, in any account class, of customer property needed to satisfy public customer net equity claims. (ii) The pro rata distribution principle means that, if there is a shortfall of customer property in an account class, all customers within that account class will suffer the same proportional loss relative to their allowed net equity claims. The principle in this paragraph (c)(5)(ii) applies to all customers, including those who post as collateral specifically identifiable property or letters of credit. The pro rata distribution principle is subject to the special distribution provisions set forth in framework 1 in appendix B of this part for cross-margin accounts and framework 2 in appendix B of this part for funds held outside of the U.S. or held in non-U.S. currency. (6) Deliveries. (i) Commodity contracts may have terms that require a customer owning the contract: (A) To make or take delivery of the underlying commodity if the customer holds the contract to a delivery position; or (B) In the case of an option on a commodity: ( 1 ) To make delivery upon exercise (as the buyer of a put option or seller of a call option); or ( 2 ) To take delivery upon exercise (as seller of a put option or buyer of a call option). (ii) Depending upon the circumstances and relevant market, delivery may be effected via a delivery account, a futures account, a foreign futures account or a cleared swaps account, or, when the commodity subject to delivery is a security, in a securities account (in which case property associated with the delivery held in a securities account is not part of any customer account class for purposes of this part). (iii) Although commodity contracts with delivery obligations are typically offset before reaching the delivery stage ( i.e., prior to triggering bilateral delivery obligations), when delivery obligations do arise, a delivery default could have a disruptive effect on the cash market for the commodity and adversely impact the parties to the transaction. This part therefore sets out special provisions to address open commodity contracts that are settled by delivery, when those positions are nearing or have entered into a delivery position at the time of or after the filing date. The delivery provisions in this part are intended to allow deliveries to be completed in accordance with the rules and established practices for the relevant commodity contract market or clearing organization, as applicable and to the extent permitted under this part. (iv) In a proceeding in which the debtor is a futures commission merchant, the delivery provisions in this part reflect policy preferences to: (A) Liquidate commodity contracts that settle via delivery before they move into a delivery position; and (B) When such contracts are in a delivery position, to allow delivery to occur, where practicable, outside administration of the debtor's estate. (v) The delivery provisions in this part apply to any commodity that is subject to delivery under a commodity contract, as the term commodity is defined in section of 1a(9) of the Act, whether the commodity itself is tangible or intangible, including agricultural commodities as defined in § 1.3 of this chapter, other non-financial commodities (such as metals or energy commodities) covered by the definition of exempt commodity in section 1a(20) of the Act, and commodities that are financial in nature (such as foreign currencies) covered by the definition of excluded commodity in section 1a(19) of the Act. The delivery provisions also apply to virtual currencies that are subject to delivery under a commodity contract. (d) Scope —(1) Proceedings —(i) Certain commodity broker proceedings under subchapter IV of chapter 7 of the Bankruptcy Code. (A) Section 101(6) of the Bankruptcy Code recognizes “futures commission merchants” and “foreign futures commission merchants,” as those terms are defined in section 761(12) of the Bankruptcy Code, as separate categories of commodity broker. The definition of commodity broker in § 190.01, as it applies to a commodity broker that is a futures commission merchant under the Act, also covers foreign futures commission merchants because a foreign futures commission merchant is required to register as a futures commission merchant under the Act. (B) Section 101(6) of the Bankruptcy Code recognizes “commodity options dealers,” and “leverage transaction merchants” as defined in sections 761(6) and (13) of the Bankruptcy Code, as separate categories of commodity brokers. There are no commodity options dealers or leverage transaction merchants as of December 8, 2020. The Commission intends to adopt rules with respect to commodity options dealers or leverage transaction merchants, respectively, at such time as an entity registers as such. (ii) Futures commission merchants subject to a SIPA proceeding. Pursuant to section 7(b) of SIPA, 15 U.S.C. 78fff-1(b), the trustee in a SIPA proceeding, where the debtor also is a commodity broker, has the same duties as a trustee in a proceeding under subchapter IV of chapter 7 of the Bankruptcy Code, to the extent consistent with the provisions of SIPA or as otherwise ordered by the court. This part therefore also applies to a proceeding commenced under SIPA with respect to a debtor that is registered as a broker or dealer under section 15 of the Securities Exchange Act of 1934 when the debtor also is a futures commission merchant. (iii) Commodity brokers subject to an FDIC proceeding. Section 5390(m)(1)(B) of title 12 of the United States Code provides that the FDIC must apply the provisions of subchapter IV of chapter 7 of the Bankruptcy Code in respect of the distribution of customer property and member property in connection with the liquidation of a covered financial company or a bridge financial company (as those terms are defined in section 5381(a) of title 12) that is a commodity broker as if such person were a debtor for purposes of subchapter IV, except as specifically provided in section 5390 of title 12. This part therefore shall serve as guidance as to such distribution of property in a proceeding in which the FDIC is acting as a receiver pursuant to title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act with respect to a covered financial company or bridge financial company that is a commodity broker whose liquidation otherwise would be administered by a trustee under subchapter IV of chapter 7 of the Bankruptcy Code. (2) Account class and implied trust limitations. (i) The trustee may not recognize any account class that is not one of the account classes enumerated in § 190.01. (ii) No property that would otherwise be included in customer property, as defined in § 190.01, shall be excluded from customer property because such property is considered to be held in a constructive, resulting, or other trust that is implied in equity. (3) Commodity contract exclusions. For purposes of this part, the following are excluded from the term “commodity contract”: (i) Options on commodities (including swaps subject to regulation under part 32 of this chapter) that are not centrally cleared by a clearing organization or foreign clearing organization. (ii) Transactions, contracts or agreements that are classified as “forward contracts” under the Act pursuant to the exclusion from the term “future delivery” set out in section 1a(27) of the Act or the exclusion from the definition of a “swap” under section 1a(47)(B)(ii) of the Act, in each case that are not centrally cleared by a clearing organization or foreign clearing organization. (iii) Security futures products as defined in section 1a(45) of the Act when such products are held in a securities account. (iv) Any off-exchange retail foreign currency transaction, contract or agreement described in sections 2(c)(2)(B) or (C) of the Act. (v) Any security-based swap or other security (as defined in section 3 of the Exchange Act), but a security futures product or a mixed swap (as defined in 1a(47)(D) of the Act) that is, in either case, carried in an account for which there is a corresponding account class under this part is not so excluded. (vi) Any off-exchange retail commodity transaction, contract or agreement described in section 2(c)(2)(D) of the Act, unless such transaction, contract or agreement is traded on or subject to the rules of a designated contract market or foreign board of trade as, or as if, such transaction, contract, or agreement is a futures contract. (e) Construction. (1) A reference in this part to a specific section of a Federal statute or specific regulation refers to such section or regulation as the same may be amended or superseded. (2) Where they differ, the definitions set forth in § 190.01 shall be used instead of defined terms set forth in section 761 of the Bankruptcy Code. In many cases, these definitions are based on definitions in parts 1, 22, and 30 of this chapter. Notwithstanding the use of different defined terms, the regulations in this part are intended to be consistent with the provisions and objectives of subchapter IV of chapter 7 of the Bankruptcy Code. (3) In the context of portfolio margining and cross margining programs, commodity contracts and associated collateral will be treated as part of the account class in which, consistent with part 1, 22, 30, or 39 of this chapter, or Commission Order, they are held. (i) Thus, as noted in paragraph (2) of the definition of account class in § 190.01, where open commodity contracts (and associated collateral) that would be attributable to one account class are, instead, commingled with the commodity contracts (and associated collateral) in a second account class (the “home field”), then the trustee must treat all such commodity contracts and collateral as part of, and consistent with the regulations applicable to, the second account class. (ii) The concept in paragraph (e)(3)(i) of this section, that the rules of the “home field” will apply, also pertains to securities positions that are, pursuant to an approved cross margining program, held in a commodities account class (in which case the rules of that commodities account class will apply) and to commodities positions that are, pursuant to an approved cross-margining program, held in a securities account (in which case, the rules of the securities account will apply, consistent with section 16(2)(b)(ii) of SIPA, 15 U.S.C. 78lll(2)(b)(ii))." 17:17:2.0.1.1.33.1.1.2,17,Commodity and Securities Exchanges,I,,190,PART 190—BANKRUPTCY RULES,A,Subpart A—General Provisions,,§ 190.01 Definitions.,CFTC,,,,"For purposes of this part: Account class: (1) Means one or more of each of the following types of accounts maintained by a futures commission merchant or clearing organization (as applicable), each type of which must be recognized as a separate account class by the trustee: (i) Futures account means: (A) With respect to public customers, the same definition as set forth in § 1.3 of this chapter. (B) With respect to non-public customers: ( 1 ) With respect to a futures commission merchant, an account maintained on the books and records of the futures commission merchant for the purpose of accounting for a person's transactions in futures or options on futures contracts executed on or subject to the rules of a designated contract market registered under the Act (and related cash, securities, or other property); and ( 2 ) With respect to a clearing organization, an account maintained on the books and records of the clearing organization for the purpose of accounting for transactions in futures or options on futures contracts cleared or settled by the clearing organization for a member or a member's non-public customers (and related cash, securities, or other property). (ii) Foreign futures account means: (A) With respect to public customers: ( 1 ) With respect to a futures commission merchant, a 30.7 account, as such term is defined in § 30.1(g) of this chapter; and ( 2 ) With respect to a clearing organization, an account maintained on the books and records of the clearing organization for the purpose of accounting for transactions in futures or options on futures contracts executed on or subject to the rules of a foreign board of trade, cleared or settled by the clearing organization for a member that is a futures commission merchant (and related cash, securities or other property), on behalf of that member's 30.7 customers (as that latter term is defined in § 30.1(f) of this chapter). (B) With respect to non-public customers: ( 1 ) With respect to a futures commission merchant, an account maintained on the books and records of the futures commission merchant for the purpose of accounting for a person's transactions in futures or options on futures contracts executed on or subject to the rules of a foreign board of trade (and related cash, securities, or other property); and ( 2 ) With respect to a clearing organization, an account maintained on the books and records of the clearing organization for the purpose of accounting for transactions in futures or options on futures contracts executed on or subject to the rules of a foreign board of trade, cleared or settled by the clearing organization for a member or a member's non-public customers (and related cash, securities, or other property). (iii) Cleared swaps account means: (A) With respect to public customers, a cleared swaps customer account, as such term is defined in § 22.1 of this chapter. (B) With respect to non-public customers: ( 1 ) With respect to a futures commission merchant, an account maintained on the books and records of the futures commission merchant for the purpose of accounting for a person's transactions in cleared swaps (as defined in § 22.1 of this chapter) (and related cash, securities, or other property); and ( 2 ) With respect to a clearing organization, an account maintained on the books and records of the clearing organization for the purpose of accounting for transactions in cleared swaps (as defined in § 22.1 of this chapter) (or in other contracts permitted to be cleared in the account) cleared or settled by the clearing organization for a member or a member's non-public customers (including any property related thereto). (iv)(A) Delivery account means (for both public and non-public customers, considered separately): ( 1 ) An account maintained on the books and records of a futures commission merchant for the purpose of accounting for the making or taking of delivery under commodity contracts whose terms require settlement by delivery of a commodity, and which is designated as a delivery account on the books and records of the futures commission merchant; and ( 2 ) An account maintained on the books and records of a clearing organization for a clearing member (or a customer of a clearing member) for the purpose of accounting for the making or taking of delivery under commodity contracts whose terms require settlement by delivery of a commodity, as well as any account in which the clearing organization holds physical delivery property represented by electronic title documents or otherwise existing in an electronic (dematerialized) form in its capacity as a central depository, in each case where the account is designated as a delivery account on the books and the records of the clearing organization. (B) The delivery account class is further divided into a “physical delivery account class” and a “cash delivery account class,” as provided in § 190.06(b), each of which shall be recognized as a separate class of account by the trustee. (2)(i) If open commodity contracts that would otherwise be attributable to one account class (and any property margining, guaranteeing, securing or accruing in respect of such commodity contracts) are, pursuant to a Commission rule, regulation, or order, or a clearing organization rule approved in accordance with § 39.15(b)(2) of this chapter, held separately from other commodity contracts and property in that account class and are commingled with the commodity contracts and property of another account class, then the trustee must treat the former commodity contracts (and any property margining, guaranteeing, securing, or accruing in respect of such commodity contracts), for purposes of this part, as being held in an account of the latter account class. (ii) The principle in paragraph (2)(i) of this definition will be applied to securities positions and associated collateral held in a commodity account class pursuant to a cross margining program approved by the Commission (and thus treated as part of that commodity account class) and to commodity positions and associated collateral held in a securities account pursuant to a cross margining program approved by the Commission (and thus treated as part of the securities account). (3) For the purpose of this definition, a commodity broker is considered to maintain an account for another person by establishing internal books and records in which it records the person's commodity contracts and cash, securities or other property received from or on behalf of such person or accruing to the credit of such person's account, and related activity (such as liquidation of commodity contract positions or adjustments to reflect mark-to-market gains or losses on commodity contract positions), regardless whether the commodity broker has kept such books and records current or accurate. Act means the Commodity Exchange Act. Bankruptcy Code means, except as the context of the regulations in this part otherwise requires, those provisions of title 11 of the United States Code relating to ordinary bankruptcies (chapters 1 through 5) and liquidations (chapter 7 with the exception of subchapters III and V), together with the Federal Rules of Bankruptcy Procedure relating thereto. Business day means weekdays, not including Federal holidays as established annually by 5 U.S.C. 6103. A business day begins at 8:00 a.m. in Washington, DC, and ends at 7:59:59 a.m. on the next day that is a business day. Calendar day means the time from midnight to midnight in Washington, DC. Cash delivery account class has the meaning set forth under account class in this section. Cash delivery property means any cash or cash equivalents recorded in a delivery account that is, as of the filing date: (1) Credited to such account to pay for receipt of delivery of a commodity under a commodity contract; (2) Credited to such account to collateralize or guarantee an obligation to make or take delivery of a commodity under a commodity contract; or (3) Has been credited to such account as payment received in exchange for making delivery of a commodity under a commodity contract. It also includes property in the form of commodities that have been delivered after the filing date in exchange for cash or cash equivalents held in a delivery account as of the filing date. The cash or cash equivalents must be identified on the books and the records of the debtor as having been received, from or for the account of a particular customer, on or after seven calendar days before the relevant: (i) First notice date in the case of a futures contract; or (ii) Exercise date in the case of a (cleared) option. (4) Cash delivery property also includes any cash transferred by a customer to the trustee on or after the filing date for the purpose of paying for delivery, consistent with § 190.06(a)(3)(ii)(B)( 1 ). (5) In the case of a contract where one fiat currency is exchanged for another fiat currency, each such currency, to the extent that it is recorded in a delivery account, will be considered cash delivery property. Cash equivalents means assets, other than United States dollar cash, that are highly liquid such that they may be converted into United States dollar cash within one business day without material discount in value. Cleared swaps account has the meaning set forth under account class in this section. Clearing organization means a derivatives clearing organization that is registered with the Commission as such under the Act. Commodity broker means any person that is: (1) A futures commission merchant under the Act, but excludes a person that is “notice-registered” as a futures commission merchant under section 4f(a)(2) of the Act; or (2) A clearing organization, in each case with respect to which there is a “customer” as that term is defined in this section. Commodity contract means: (1) A futures or options on futures contract executed on or subject to the rules of a designated contract market; (2) A futures or option on futures contract executed on or subject to the rules of a foreign board of trade; (3) A swap as defined in section 1a(47) of the Act and § 1.3 of this chapter, that is directly or indirectly submitted to and cleared by a clearing organization and which is thus a cleared swap as that term is defined in section 1a(7) of the Act and § 22.1 of this chapter; or (4) Any other contract that is a swap for purposes of this part under the definition in this section and is submitted to and cleared by a clearing organization. (5) Notwithstanding paragraphs (1) through (4) of this definition, a security futures product as defined in section 1a(45) of the Act is not a commodity contract for purposes of this part when such contract is held in a securities account. Moreover, a contract, agreement, or transaction described in § 190.00(d)(3) as excluded from the term “commodity contract” is excluded from this definition. Commodity contract account means: (1) A futures account, foreign futures account, cleared swaps account, or delivery account; or (2) If the debtor is a futures commission merchant, for purposes of identifying customer property for the foreign futures account class (subject to § 190.09(a)(1)), an account maintained for the debtor by a foreign clearing organization or a foreign futures intermediary reflecting futures or options on futures executed on or subject to the rules of a foreign board of trade, including any account maintained on behalf of the debtor's public customers. Court means the court having jurisdiction over the debtor's estate. Cover has the meaning set forth in § 1.17(j) of this chapter. Customer means: (1)(i) With respect to a futures commission merchant as debtor (including a foreign futures commission merchant as that term is defined in section 761(12) of the Bankruptcy Code), the meaning set forth in sections 761(9)(A) and (B) of the Bankruptcy Code. (ii) With respect to a clearing organization as debtor, the meaning set forth in section 761(9)(D) of the Bankruptcy Code. (2) The term customer includes the owner of a portfolio cross-margining account covering commodity contracts and related positions in securities (as defined in section 3 of the Exchange Act) that is carried as a futures account or cleared swaps customer account pursuant to an appropriate rule, regulation, or order of the Commission. Customer claim of record means a customer claim that is determinable solely by reference to the records of the debtor. Customer class means each of the following two classes of customers, which must be recognized as separate classes by the trustee: Public customers and non-public customers; provided, however, that when the debtor is a clearing organization the references to public customers and non-public customers are based on the classification of customers of, and in relation to, the members of the clearing organization. Customer property and customer estate are used interchangeably to mean the property subject to pro rata distribution in a commodity broker bankruptcy in the priority set forth in sections 766(h) or (i), as applicable, of the Bankruptcy Code, and includes cash, securities, and other property as set forth in § 190.09(a). Debtor means a person with respect to which a proceeding is commenced under subchapter IV of chapter 7 of the Bankruptcy Code or under SIPA, or for which the Federal Deposit Insurance Corporation is appointed as a receiver pursuant to 12 U.S.C. 5382, provided, however, that this part applies only to such a proceeding if the debtor is a commodity broker as defined in this section. Delivery account has the meaning set forth under account class in this section. Distribution of property to a customer includes transfer of property on the customer's behalf, return of property to a customer, as well as distributions to a customer of valuable property that is different than the property posted by that customer. Equity means the amount calculated as equity in accordance with § 190.08(b)(1). Exchange Act means the Securities Exchange Act of 1934, as amended, 15 U.S.C. 78a et seq. FDIC means the Federal Deposit Insurance Corporation. Filing date means the date a petition under the Bankruptcy Code or application under SIPA commencing a proceeding is filed or on which the FDIC is appointed as a receiver pursuant to 12 U.S.C. 5382(a). 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 as determined by rule 3002(c) of the Federal Rules of Bankruptcy Procedure, the expiration of the six-month period imposed pursuant to section 8(a)(3) of SIPA, or such other date (whether earlier or later) set by the court (or, in the case of the FDIC acting as a receiver pursuant to 12 U.S.C. 5382(a), the deadline set by the FDIC pursuant to 12 U.S.C. 5390(a)(2)(B); or (4) The day following the allowance (by the trustee or by the bankruptcy court) or disallowance (by the bankruptcy court) of all disputed customer net equity claims. Foreign board of trade has the same meaning as set forth in § 1.3 of this chapter. Foreign clearing organization means a clearing house, clearing association, clearing corporation or similar entity, facility, or organization clears and settles transactions in futures or options on futures executed on or subject to the rules of a foreign board of trade. Foreign future shall have the same meaning as that set forth in section 761(11) of the Bankruptcy Code. Foreign futures account has the meaning set forth under account class in this section. Foreign futures commission merchant shall have the same meaning as that set forth in section 761(12) of the Bankruptcy Code. Foreign futures intermediary refers to a foreign futures and options broker, as such term is defined in § 30.1(e) of this chapter, acting as an intermediary for foreign futures contracts between a foreign futures commission merchant and a foreign clearing organization. Funded balance means the amount calculated as funded balance in accordance with § 190.08(c) and, as applicable, § 190.17(d). Funded net equity means, for purposes of subpart B of this part, the amount calculated as funded net equity in accordance with § 190.08(a), and for purposes of subpart C of this part, the amount calculated as funded net equity in accordance with § 190.17(c). Futures and futures contract are used interchangeably to mean any contract for the purchase or sale of a commodity (as defined in section 1a(9) of the Act) for future delivery that is executed on or subject to the rules of a designated contract market or on or subject to the rules of a foreign board of trade. The term also covers, for purposes of this part: (1) Any transaction, contract or agreement described in section 2(c)(2)(D) of the Act and traded on or subject to the rules of a designated contract market or foreign board of trade, to the extent not covered by the foregoing definition; and (2) Any transaction, contract, or agreement that is classified as a “forward contract” under the Act pursuant to the exclusion from the term “future delivery” set out in section 1a(27) of the Act or the exclusion from the definition of a “swap” under section 1a(47)(B)(ii) of the Act, provided that such transaction, contract, or agreement is traded on or subject to the rules of a designated contract market or foreign board of trade and is cleared by, respectively, a clearing organization or foreign clearing organization the same as if it were a futures contract. Futures account has the meaning set forth under account class in this section. House account means, in the case of a clearing organization, any commodity contract account of a member at such clearing organization maintained to reflect trades for the member's own account or for any non-public customer of such member. In-the-money means: (1) With respect to a call option, when the value of the underlying interest (such as a commodity or futures contract) which is the subject of the option exceeds the strike price of the option; and (2) With respect to a put option, when the value of the underlying interest (such as a commodity or futures contract) which is the subject of the option is exceeded by the strike price of the option. Joint account means any commodity contract account held by more than one person. Member property means, in connection with a clearing organization bankruptcy, the property which may be used to pay that portion of the net equity claim of a member which is based on the member's house account at the clearing organization, including any claims on behalf of non-public customers of the member. Net equity means, for purposes of subpart B of this part, the amount calculated as net equity in accordance with § 190.08(b), and for purposes of subpart C of this part, the amount calculated as net equity in accordance with § 190.17(b). Non-public customer means: (1) With respect to a futures commission merchant, any customer that is not a public customer; and (2) With respect to a clearing organization, any person whose account carried on the books and records of: (i) A member of the clearing organization that is a futures commission merchant, is classified as a proprietary account under § 1.3 of this chapter (in the case of the futures or foreign futures account class) or as a cleared swaps proprietary account under § 22.1 of this chapter (in the case of the cleared swaps account class); or (ii) A member of the clearing organization that is a foreign broker, is classified or treated as proprietary under and for purposes of: (A) The rules of the clearing organization; or (B) The jurisdiction of incorporation of such member. 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 ( i.e., liquidated) by another commodity contract. Order for relief has the same meaning set forth in section 301 of the Bankruptcy Code, in the case of the filing of a voluntary bankruptcy petition, and means the entry of an order granting relief under section 303 of the Bankruptcy Code in an involuntary case. It also means, where applicable, the issuance of a protective decree under section 5(b)(1) of SIPA or the appointment of the FDIC as receiver pursuant to 12 U.S.C. 5382(a)(1)(A). Person means any individual, association, partnership, corporation, trust, or other form of legal entity. Physical delivery account class has the meaning set forth under account class in this section. Physical delivery property means: (1) In general. A commodity, whether tangible or intangible, held in a form that can be delivered to meet and fulfill delivery obligations under a commodity contract that settles via delivery if held to a delivery position (as described in § 190.06(a)(1)), including warehouse receipts, other documents of title, or shipping certificates (including electronic versions of any of the foregoing) for the commodity, or the commodity itself: (i) That the debtor holds for the account of a customer for the purpose of making delivery of such commodity on the customer's behalf, which as of the filing date or thereafter, can be identified on the books and records of the debtor as held in a delivery account for the benefit of such customer. Cash or cash equivalents received after the filing date in exchange for delivery of such physical delivery property shall also constitute physical delivery property; (ii) That the debtor holds for the account of a customer and that the customer received or acquired by taking delivery under an expired or exercised commodity contract and which, as of the filing date or thereafter, can be identified on the books and records of the debtor as held in a delivery account for the benefit of such customer, regardless how long such property has been held in such account; or (iii) Where property that the debtor holds in a futures account, foreign futures account, or cleared swaps account, or, if the commodity is a security, in a securities account, would meet the criteria listed in paragraph (1) or (2) of this definition, but for the fact of being held in such account rather than a delivery account, such property will be considered physical delivery property solely for purposes of the obligations to make or take delivery of physical delivery property pursuant to § 190.06. (iv) Commodities or documents of title that are not held by the debtor and are delivered or received by a customer in accordance with § 190.06(a)(2) (or in accordance with § 190.06(a)(2) in conjunction with § 190.16(a) if the debtor is a clearing organization) to fulfill a customer's delivery obligation under a commodity contract will be considered physical delivery property solely for purposes of the obligations to make or take delivery of physical delivery property pursuant to § 190.06. As this property is held outside of the debtor's estate, it is not subject to pro rata distribution. (2) Special cases. (i) In the case of a contract where one fiat currency is exchanged for another fiat currency, neither such currency, to the extent that it is recorded in a delivery account, will be considered physical delivery property. (ii) In a case where the final settlement price is negative, i.e., where the party obliged to deliver physical delivery property under an expiring futures contract or an expired options contract is also obliged to make a cash payment to the buyer, such cash or cash equivalents constitute physical delivery property. Primary liquidation date means the first business day immediately following the day on which all commodity contracts (including any commodity contracts that are specifically identifiable property) have been liquidated or transferred. Public customer means: (1) With respect to a futures commission merchant and in relation to: (i) The futures account class, a futures customer as defined in § 1.3 of this chapter whose futures account is subject to the segregation requirements of section 4d(a) of the Act and the regulations in this chapter that implement section 4d(a), including as applicable §§ 1.20 through 1.30 of this chapter; (ii) The foreign futures account class, a 30.7 customer as defined in § 30.1 of this chapter whose foreign futures accounts is subject to the segregation requirements of § 30.7 of this chapter; (iii) The cleared swaps account class, a Cleared Swaps Customer as defined in § 22.1 of this chapter whose cleared swaps account is subject to the segregation requirements of part 22 of this chapter; and (iv) The delivery account class, a customer that is or would be classified as a public customer if the property reflected in the customer's delivery account had been held in an account described in paragraph (1)(i), (ii), or (iii) of this definition. (2) With respect to a clearing organization, any customer of that clearing organization that is not a non-public customer. Securities account means, in relation to a futures commission merchant that is registered as a broker or dealer under the Exchange Act, an account maintained by such futures commission merchant in accordance with the requirements of section 15(c)(3) of the Exchange Act and § 240.15c3-3 of this title. Security has the meaning set forth in section 101(49) of the Bankruptcy Code. SIPA means the Securities Investor Protection Act of 1970, 15 U.S.C 78aaa et seq. Specifically identifiable property means: (1)(i) The following property received, acquired, or held by or for the account of the debtor from or for the futures account, foreign futures account, or cleared swaps account of a customer: (A) Any security which as of the filing date is: ( 1 )( i ) Held for the account of a customer; ( ii ) Registered in such customer's name; ( iii ) Not transferable by delivery; and ( iv ) Has a duration or maturity date of more than 180 days; or ( 2 )( i ) Fully paid; ( ii ) Non-exempt; and ( iii ) Identified on the books and records of the debtor as held by the debtor for or on behalf of the commodity contract 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. (B) Any warehouse receipt, bill of lading, or other document of title which as of the filing date: ( 1 ) Can be identified on the books and records of the debtor as held for the account of a particular customer; and ( 2 ) Is not in bearer form and is not otherwise transferable by delivery; (ii) Any open commodity contracts treated as specifically identifiable property in accordance with § 190.03(c)(2); and (iii) Any physical delivery property described in paragraphs (1) through (3) of the definition of physical delivery property in this section. (2) Notwithstanding paragraphs (1) and (3) of this definition, 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, if held in a securities account. (3) No property that is not explicitly included in this definition may be treated as specifically identifiable property. Strike price means the price per unit multiplied by the total number of units at which a person may purchase or sell a futures contract or a commodity or other interest underlying an option that is a commodity contract. Substitute customer property means cash or cash equivalents delivered to the trustee by or on behalf of a customer in connection with: (1) The return of specifically identifiable property by the trustee; or (2) The return of, or an agreement not to draw upon, a letter of credit received, acquired or held to margin, guarantee, secure, purchase, or sell a commodity contract. Swap has the meaning set forth in section 1a(47) of the Act and § 1.3 of this chapter, and, in addition, also means any other contract, agreement, or transaction that is carried in a cleared swaps account pursuant to a rule, regulation, or order of the Commission, provided, in each case, that it is cleared by a clearing organization as, or the same as if it were, a swap. Trustee means, as appropriate, the trustee in bankruptcy or in a SIPA proceeding, appointed to administer the debtor's estate and any interim or successor trustee, or the FDIC, where it has been appointed as a receiver pursuant to 12 U.S.C. 5382. Undermargined means, with respect to a futures account, foreign futures account, or cleared swaps account carried by the debtor, the funded balance for such account is below the minimum amount that the debtor is required to collect and maintain for the open commodity contracts in such account under the rules of the relevant clearing organization, foreign clearing organization, designated contract market, swap execution facility or foreign board of trade. If any such rules establish both an initial margin requirement and a lower maintenance margin requirement applicable to any commodity contracts (or to the entire portfolio of commodity contracts or any subset thereof) in a particular commodity contract account of the customer, the trustee will use the lower maintenance margin level to determine the customer's minimum margin requirement for such account. Variation settlement means variation margin as defined in § 1.3 of this chapter plus all other daily settlement amounts (such as price alignment payments) that may be owed or owing on the commodity contract." 17:17:2.0.1.1.33.1.1.3,17,Commodity and Securities Exchanges,I,,190,PART 190—BANKRUPTCY RULES,A,Subpart A—General Provisions,,§ 190.02 General.,CFTC,,,,"(a) Request for exemption. (1) The trustee (or, in the case of an involuntary petition pursuant to section 303 of the Bankruptcy Code, any other person charged with the management of a commodity broker) may, for good cause shown, request from the Commission an exemption from the requirements of any procedural provision in this part, including an extension of any time limit prescribed by this part or an exemption subject to conditions, provided that the Commission shall not grant an extension for any time period established by the Bankruptcy Code. (2) A request pursuant to paragraph (a)(1) of this section— (i) May be made ex parte and by any means of communication, written or oral, provided that the trustee must confirm an oral request in writing within one business day and such confirmation must contain all the information required by paragraph (b)(3) of this section. The request or confirmation of an oral request must be given to the Commission as provided in paragraph (a) of this section. (ii) Must state the particular provision of this part with respect to which the exemption or extension is sought, the reason for the requested exemption or extension, the amount of time sought if the request is for an extension, and the reason why such exemption or extension would not be contrary to the purposes of the Bankruptcy Code and this part. (3) The Director of the Division of Clearing and Risk, or members of the Commission staff designated by the Director, shall grant, deny, or otherwise respond to a request, on the basis of the information provided in any such request and after consultation with the Director of the Market Participants Division or members of the Commission staff designated by the Director, unless exigent circumstances require immediate action precluding such prior consultation, and shall communicate that determination by the most appropriate means to the person making the request. (b) Delegation of authority to the Director of the Division of Clearing and Risk. (1) Until such time as the Commission orders otherwise, the Commission hereby delegates to the Director of the Division of Clearing and Risk, and to such members of the Commission's staff acting under the Director's direction as they may designate, after consultation with the Director of the Market Participants Division, or such members of the Commission's staff under the Director's direction as they may designate, unless exigent circumstances require immediate action, all the functions of the Commission set forth in this part, except the authority to disapprove a pre-relief transfer of a public customer commodity contract account or customer property pursuant to § 190.07(e)(1). (2) The Director of the Division of Clearing and Risk may submit to the Commission for its consideration any matter which has been delegated to the Director pursuant to paragraph (b)(1) of this section. (3) Nothing in this section shall prohibit the Commission, at its election, from exercising its authority delegated to the Director of the Division of Clearing and Risk under paragraph (b)(1) of this section. (c) Forward contracts. For purposes of this part, an entity for or with whom the debtor deals who holds a claim against the debtor solely on account of a forward contract, that is not cleared by a clearing organization, will not be deemed to be a customer. (d) Other. The Bankruptcy Code will not be construed by the Commission to prohibit a commodity broker from doing business as any combination of the following: Futures commission merchant, commodity options dealer, foreign futures commission merchant, or leverage transaction merchant, nor will the Commission construe the Bankruptcy Code to permit any operation, trade, or business, or any combination of the foregoing, otherwise prohibited by the Act or by any of the Commission's regulations in this chapter, or by any order of the Commission. (e) Rule of construction. Contracts in security futures products held in a securities account shall not be considered to be “from or for the commodity futures account” or “from or for the commodity options account” of such customers, as such terms are used in section 761(9) of the Bankruptcy Code. (f) Receivers. In the event that a receiver for a futures commission merchant is appointed due to the violation or imminent violation of the customer property protection requirements of section 4d of the Act, or of the regulations in part 1, 22, or 30 of this chapter that implement section 4d or 4(b)(2) of the Act, or of the futures commission merchant's minimum capital requirements in § 1.17 of this chapter, such receiver may, in an appropriate case, file a petition for bankruptcy of such futures commission merchant pursuant to section 301 of the Bankruptcy Code. (g) Definition of “allowed.” The term “allowed” in this part shall have the meaning ascribed to it in the Bankruptcy Code." 17:17:2.0.1.1.33.2.1.1,17,Commodity and Securities Exchanges,I,,190,PART 190—BANKRUPTCY RULES,B,Subpart B—Futures Commission Merchant as Debtor,,§ 190.03 Notices and proofs of claims.,CFTC,,,,"(a) Notices-means of providing —(1) To the Commission. Unless instructed otherwise by the Commission, all mandatory or discretionary notices to be given to the Commission under this subpart shall be directed by electronic mail to bankruptcyfilings@cftc.gov. For purposes of this subpart, notice to the Commission shall be deemed to be given only upon actual receipt. (2) To Customers. The trustee, after consultation with the Commission, and unless otherwise instructed by the Commission, will establish and follow procedures reasonably designed for giving adequate notice to customers under this subpart and for receiving claims or other notices from customers. Such procedures should include, absent good cause otherwise, the use of a prominent website as well as communication to customers' electronic addresses that are available in the debtor's books and records. (b) Notices to the Commission and designated self-regulatory organizations —(1) Of commencement of a proceeding. Each commodity broker that is a futures commission merchant and files a petition in bankruptcy shall as soon as practicable before, and in any event no later than, the time of such filing, notify the Commission and such commodity broker's designated self-regulatory organization of the anticipated or actual filing date, the court in which the proceeding will be or has been filed and, as soon as known, the docket number assigned to that proceeding. Each commodity broker that is a futures commission merchant and against which a bankruptcy petition is filed or with respect to which an application for a protective decree under SIPA is filed shall immediately upon the filing of such petition or application notify the Commission and such commodity broker's designated self-regulatory organization of the filing date, the court in which the proceeding has been filed, and, as soon as known, the docket number assigned to that proceeding. (2) Of transfers under section 764(b) of the Bankruptcy Code. As soon as possible, the trustee of a commodity broker that is a futures commissions merchant, the relevant designated self-regulatory organization, or the applicable clearing organization must notify the Commission, and in the case of a futures commission merchant, the trustee shall also notify its designated self-regulatory organization and clearing organization(s), if such person intends to transfer or to apply to transfer open commodity contracts or customer property on behalf of the public customers of the debtor in accordance with section 764(b) of the Bankruptcy Code and § 190.07(c) or (d). (c) Notices to customers —(1) Specifically identifiable property other than open commodity contracts. In any case in which an order for relief has been entered, the trustee must use all reasonable efforts to promptly notify, in accordance with paragraph (a)(2) of this section, any customer whose futures account, foreign futures account, or cleared swaps account includes specifically identifiable property, other than open commodity contracts, which has not been liquidated, that such specifically identifiable property may be liquidated commencing on and after the seventh day after the order for relief (or such other date as is specified by the trustee in the notice with the approval of the Commission or court) if the customer has not instructed the trustee in writing before the deadline specified in the notice to return such property pursuant to the terms for distribution of specifically identifiable property contained in § 190.09(d)(1). Such notice must describe the specifically identifiable property and specify the terms upon which that property may be returned, including if applicable and to the extent practicable any substitute customer property that must be provided by the customer. (2) Open commodity contracts carried in hedging accounts. To the extent reasonably practicable under the circumstances of the case, and following consultation with the Commission, the trustee may treat open commodity contracts of public customers identified on the books and records of the debtor as held in a futures account, foreign futures account, or cleared swaps account designated as a hedging account in the debtor's records, as specifically identifiable property of such customer. (i) If the trustee does not exercise such authority, such open commodity contracts do not constitute specifically identifiable property. (ii) If the trustee exercises such authority: (A) The trustee shall use reasonable efforts to promptly notify, in accordance with paragraph (a)(2) of this section, each relevant public customer of such determination. (B)( 1 ) Where, in the judgment of the trustee, the books and records of the debtor reveal a clear preference by a relevant public customer with respect to transfer or liquidation of open commodity contracts, the trustee shall endeavor, to the extent reasonably practicable, to comply with that preference. ( 2 ) Where, in the judgment of the trustee, the books and records of the debtor do not reveal a clear preference by a relevant public customer with respect to transfer or liquidation of open commodity contracts, the trustee will request the customer to provide written instructions whether to transfer or liquidate such open commodity contracts. Such notice must specify the manner for providing such instructions and the deadline by which the customer must provide instructions. (C) Such notice must also inform the customer that: ( 1 ) (Where instructions have been requested pursuant to paragraph (c)(2)(ii)(B)( 2 ) of this section), if the customer does not provide instructions in the prescribed manner and by the prescribed deadline, the customer's open commodity contracts will not be treated as specifically identifiable property under this part; ( 2 ) Any transfer of the open commodity contracts is subject to the terms for distribution contained in § 190.09(d)(2); ( 3 ) Absent compliance with any terms imposed by the trustee or the court, the trustee may liquidate the open commodity contracts; and ( 4 ) Providing (or having provided) instructions may not prevent the open commodity contracts from being liquidated. (3) Involuntary cases. Prior to entry of an order for relief, and upon leave of the court, a trustee appointed in an involuntary proceeding pursuant to section 303 of the Bankruptcy Code may notify customers, in accordance with paragraph (a)(2) of this section, of the commencement of such proceeding and may request customer instructions with respect to the return, liquidation, or transfer of specifically identifiable property. (4) Notice of bankruptcy and request for proof of customer claim. The trustee shall promptly notify, in accordance with paragraph (a)(2) of this section, each customer that an order for relief has been entered and instruct each customer to file a proof of customer claim containing the information specified in paragraph (e) of this section. Such notice may be given separately from any notice provided in accordance with paragraph (c) of this section. The trustee shall cause the proof of customer claim form referred to in paragraph (e) of this section to set forth the bar date for its filing. (d) Notice of court filings. The trustee shall promptly provide the Commission with copies of any complaint, motion, or petition filed in a commodity broker bankruptcy which concerns the disposition of customer property. Court filings shall be directed to the Commission addressed as provided in paragraph (a)(1) of this section. (e) Proof of customer claim. The trustee shall request that customers provide, to the extent reasonably practicable, information sufficient to determine a customer's claim in accordance with the regulations contained in this part, including in the discretion of the trustee: (1) The class of commodity contract account upon which each claim is based ( i.e., futures account, foreign futures account, cleared swaps account, or delivery account (and, in the case of a delivery account, how much is based on cash delivery property and how much is based on the value of physical delivery property); (2) Whether the claimant is a public customer or a non-public customer; (3) The number of commodity contract accounts held by each claimant, and, for each such account: (i) The account number; (ii) The name in which the account is held; (iii) The balance as of the last account statement for the account, and information regarding any activity in the account from the date of the last account statement up to and including the filing date that affected the balance of the account; (iv) The capacity in which the account is held; (v) Whether the account is a joint account and, if so, the amount of the claimant's percentage interest in that account and whether participants in the joint account are claiming jointly or separately; (vi) Whether the account is a discretionary account; (vii) Whether the account is an individual retirement account for which there is a custodian; and (viii) Whether the account is a cross-margining account for futures and securities; (4) A description of any accounts held by the claimant with the debtor that are not commodity contract accounts; (5) A description of all claims against the debtor not based upon a commodity contract account of the claimant or an account listed in response to paragraph (e)(4) of this section; (6) A description of all claims of the debtor against the claimant not included in the balance of a commodity contract account of the claimant; (7) A description of and the value of any open positions, unliquidated securities, or other unliquidated property held by the debtor on behalf of the claimant, indicating the portion of such property, if any, which was included in the information provided in paragraph (e)(3) of this section, and identifying any such property which would be specifically identifiable property as defined in § 190.01; (8) Whether the claimant holds positions in security futures products, and, if so, whether those positions are held in a futures account, a foreign futures account, or a securities account; (9) Whether the claimant wishes to receive payment in kind, to the extent practicable, for any claim for unliquidated securities or other unliquidated property; and (10) Copies of any documents which support the information contained in the proof of customer claim, including without limitation, customer confirmations, account statements, and statements of purchase or sale. (f) Proof of claim form. A template customer proof of claim form which may (but is not required to) be used by the trustee is set forth in appendix A to this part. (1) If there are no open commodity contracts that are being treated as specifically identifiable property (e.g., if the customer proof of claim form was distributed after the primary liquidation date), the trustee should modify the customer proof of claim form to delete references to open commodity contracts as specifically identifiable property. (2) In the event the trustee determines that the debtor's books and records reflecting customer transactions are not reasonably reliable, or account statements are not available from which account balances as of the date of transfer or liquidation of customer property may be determined, the proof of claim form used by the trustee should be modified to take into account the particular facts and circumstances of the case." 17:17:2.0.1.1.33.2.1.2,17,Commodity and Securities Exchanges,I,,190,PART 190—BANKRUPTCY RULES,B,Subpart B—Futures Commission Merchant as Debtor,,§ 190.04 Operation of the debtor's estate—customer property.,CFTC,,,,"(a) Transfers —(1) All cases. The trustee for a commodity broker shall promptly use its best efforts to effect a transfer in accordance with § 190.07(c) and (d) no later than the seventh calendar day after the order for relief of the open commodity contracts and property held by the commodity broker for or on behalf of its public customers. (2) Involuntary cases. A commodity broker against which an involuntary petition in bankruptcy is filed, or the trustee if a trustee has been appointed in such case, shall use its best efforts to effect a transfer in accordance with § 190.07(c) and (d) of all open commodity contracts and property held by the commodity broker for or on behalf of its public customers and such other property as the Commission in its discretion may authorize, on or before the seventh calendar day after the filing date, and immediately cease doing business; provided, however, that if the commodity broker demonstrates to the Commission within such period that it was in compliance with the segregation and financial requirements of this chapter on the filing date, and the Commission determines, in its sole discretion, that such transfer is neither appropriate nor in the public interest, the commodity broker may continue in business subject to applicable provisions of the Bankruptcy Code and of this chapter. (b) Treatment of open commodity contracts —(1) Payments by the trustee. Prior to the primary liquidation date, the trustee may make payments of initial margin and variation settlement to a clearing organization, commodity broker, foreign clearing organization, or foreign futures intermediary, carrying the account of the debtor, pending the transfer, or liquidation of any open commodity contracts, whether or not such contracts are specifically identifiable property of a particular customer, provided, that: (i) To the extent within the trustee's control, the trustee shall not make any payments on behalf of any commodity contract account on the books and records of the debtor that is in deficit; provided, however, that the provision in this paragraph (b)(1) shall not be construed to prevent a clearing organization, foreign clearing organization, futures commission merchant, or foreign futures intermediary carrying an account of the debtor from exercising its rights to the extent permitted under applicable law; (ii) Any margin payments made by the trustee with respect to a specific customer account shall not exceed the funded balance for that account; (iii) The trustee shall not make any payments on behalf of non-public customers of the debtor from funds that are segregated for the benefit of public customers; (iv) If the trustee receives payments from a customer in response to a margin call, then to the extent within the trustee's control, the trustee must use such payments to make margin payments for the open commodity contract positions of such customer; (v) The trustee may not use payments received from one public customer to meet the margin (or any other) obligations of any other customer; and (vi) If funds segregated for the benefit of public customers in a particular account class exceed the aggregate net equity claims for all public customers in such account class, the trustee may use such excess funds to meet the margin obligations for any public customer in such account class whose account is under-margined (as described in paragraph (b)(4) of this section) but not in deficit, provided that the trustee issues a margin call to such customer and provided further that the trustee shall liquidate such customer's open commodity contracts if the customer fails to make the margin payment within a reasonable time as provided in paragraph (b)(4) of this section. (2) Margin calls. The trustee (or, prior to appointment of the trustee, the debtor against which an involuntary petition was filed) may issue a margin call to any public customer whose commodity contract account contains open commodity contracts if such account is under-margined. (3) Margin payments by the customer. The full amount of any margin payment by a customer in response to a margin call under paragraph (b)(2) of this section must be credited to the funded balance of the particular account for which it was made. (4) Trustee obligation to liquidate certain open commodity contracts. The trustee shall, as soon as practicable under the circumstances, liquidate all open commodity contracts in any commodity contract account that is in deficit, or for which any mark-to-market calculation would result in a deficit, or for which the customer fails to meet a margin call made by the trustee within a reasonable time. Except as otherwise provided in this part, absent exigent circumstances, a reasonable time for meeting margin calls made by the trustee shall be deemed to be one hour, or such greater period not to exceed one business day, as the trustee may determine in its sole discretion. (5) Partial liquidation of open commodity contracts by others. In the event that a clearing organization, foreign clearing organization, futures commission merchant, foreign futures intermediary, or other person carrying a commodity customer account for the debtor in the nature of an omnibus account has liquidated only a portion of open commodity contracts in such account, the trustee will exercise reasonable business judgment in assigning the liquidating transactions to the underlying commodity customer accounts carried by the debtor. Specifically, the trustee should endeavor to assign the contracts as follows: First, to liquidate open commodity contracts in a risk-reducing manner in any accounts that are in deficit; second, to liquidate open commodity contracts in a risk-reducing manner in any accounts that are undermargined; third, to liquidate open commodity contracts in a risk-reducing manner in any other accounts, and finally to liquidate any remaining open commodity contracts in any accounts. If more than one commodity contract account reflects open commodity contracts in a particular account class for which liquidating transactions have been executed, the trustee shall to the extent practicable allocate the liquidating transactions to such commodity contract accounts pro rata based on the number of open commodity contracts of such commodity contract accounts. For purposes of this section, the term “a risk-reducing manner” is measured by margin requirements set using the margin methodology and parameters followed by the derivatives clearing organization at which such contracts are cleared. (c) Contracts moving into delivery position. After entry of the order for relief and subject to paragraph (a) of this section, which requires the trustee to attempt to make transfers to other commodity brokers permitted by § 190.07 and section 764(b) of the Bankruptcy Code, the trustee shall use its best efforts to liquidate any open commodity contract that settles upon expiration or exercise via the making or taking of delivery of a commodity: (1) If such contract is a futures contract or a cleared swaps contract, before the earlier of the last trading day or the first day on which notice of intent to deliver may be tendered with respect thereto, or otherwise before the debtor or its customer incurs an obligation to make or take delivery of the commodity under such contract; (2) If such contract is a long option on a commodity and has value, before the first date on which the contract could be automatically exercised or the last date on which the contract could be exercised if not subject to automatic exercise; or (3) If such contract is a short option on a commodity that is in-the-money in favor of the long position holder, before the first date on which the long option position could be exercised. (d) Liquidation or offset. After entry of the order for relief and subject to paragraph (a) of this section, which requires the trustee to attempt to make transfers to other commodity brokers permitted by § 190.07 and section 764(b) of the Bankruptcy Code, and except as otherwise set forth in this paragraph (d), the following commodity contracts and other property held by or for the account of a debtor must be liquidated in the market in accordance with paragraph (e)(1) of this section or liquidated via book entry in accordance with paragraph (e)(2) of this section by the trustee promptly and in an orderly manner: (1) Open commodity contracts. All open commodity contracts, except for: (i) Commodity contracts that are specifically identifiable property (if applicable) and are subject to customer instructions to transfer (in lieu of liquidating) as provided in § 190.03(c)(2), provided that the customer is in compliance with the terms of § 190.09(d)(2); and (ii) Open commodity contract positions that are in a delivery position, which shall be treated in accordance with the provisions of § 190.06. (2) Specifically identifiable property, other than open commodity contracts or physical delivery property. Specifically identifiable property, other than open commodity contracts or physical delivery property, to the extent that: (i) The fair market value of such property is less than 75% of its fair market value on the date of entry of the order for relief; (ii) Failure to liquidate the specifically identifiable property may result in a deficit balance in the applicable customer account; or (iii) The trustee has not received instructions to return pursuant to § 190.03(c)(1), or has not returned such property upon the terms contained in § 190.09(d)(1). (3) Letters of credit. The trustee may request that a customer deliver substitute customer property with respect to any letter of credit received, acquired, or held to margin, guarantee, secure, purchase, or sell a commodity contract, whether the letter of credit is held by the trustee on behalf of the debtor's estate or a derivatives clearing organization or a foreign intermediary or foreign clearing organization on a pass-through or other basis, including in cases where the letter of credit has expired since the date of the order for relief. The amount of the request may equal the full face amount of the letter of the credit or any portion thereof, to the extent required or may be required in the trustee's discretion to ensure pro rata treatment among customer claims within each account class, consistent with §§ 190.08 and 190.09. (i) If a customer fails to provide substitute customer property within a reasonable time specified by the trustee, the trustee may, if the letter of credit has not expired, draw upon the full amount of the letter of credit or any portion thereof. (ii) For any letter of credit referred to in this paragraph (d)(3), the trustee shall treat any portion that is not drawn upon (less the value of any substitute customer property delivered by the customer) as having been distributed to the customer for purposes of calculating entitlements to distribution or transfer. The expiration of the letter of credit on or at any time after the date of the order for relief shall not affect such calculation. (iii) Any proceeds of a letter of credit drawn by the trustee, or substitute customer property posted by a customer, shall be considered customer property in the account class applicable to the original letter of credit. (iv) The trustee shall, in exercising their discretion with regard to addressing letters of credit, including as to the timing and amount of a request for substitute customer property, endeavor to mitigate, to the extent practicable, the adverse effects upon customers that have posted letters of credit, in a manner that achieves pro rata treatment among customer claims. (4) All other property. All other property, other than physical delivery property held for delivery in accordance with the provisions of § 190.06, which is not required to be transferred or returned pursuant to customer instructions and which has not been liquidated in accordance with paragraphs (d)(1) through (3) of this section. (e) Liquidation of open commodity contracts —(1) By the trustee or a clearing organization in the market —(i) Debtor as a clearing member. For open commodity contracts cleared by the debtor as a member of a clearing organization, the trustee or clearing organization, as applicable, shall liquidate such open commodity contracts pursuant to the rules of the clearing organization, a designated contract market, or a swap execution facility, if and as applicable. Any such rules providing for liquidation other than on the open market shall be designed to achieve, to the extent feasible under market conditions at the time of liquidation, a process for liquidating open commodity contracts that results in competitive pricing. For open commodity contracts that are futures or options on futures that were established on or subject to the rules of a foreign board of trade and cleared by the debtor as a member of a foreign clearing organization, the trustee shall liquidate such open commodity contracts pursuant to the rules of the foreign clearing organization or foreign board of trade or, in the absence of such rules, in the manner the trustee determines appropriate. (ii) Debtor not a clearing member. For open commodity contracts submitted by the debtor for clearing through one or more accounts established with a futures commission merchant (as defined in § 1.3 of this chapter) or foreign futures intermediary, the trustee shall use commercially reasonable efforts to liquidate the open commodity contracts to achieve competitive pricing, to the extent feasible under market conditions at the time of liquidation and subject to any rules or orders of the relevant clearing organization, foreign clearing organization, designated contract market, swap execution facility, or foreign board of trade governing the liquidation of open commodity contracts. (2) By the trustee or a clearing organization via book entry offset. Upon application by the trustee or clearing organization, the Commission may permit open commodity contracts to be liquidated, or settlement on such contracts to be made, by book entry. Such book entry shall offset open commodity contracts, whether matched or not matched on the books of the commodity broker, using the settlement price for such commodity contracts as determined by the clearing organization in accordance with its rules. Such rules shall be designed to establish, to the extent feasible under market conditions at the time of liquidation, such settlement prices in a competitive manner. (3) By a futures commission merchant or foreign futures intermediary. For open commodity contracts cleared by the debtor through one or more accounts established with a futures commission merchant or a foreign futures intermediary, such futures commission merchant or foreign futures intermediary may exercise any enforceable contractual rights it has to liquidate such commodity contracts, provided, that it shall use commercially reasonable efforts to liquidate the open commodity contracts to achieve competitive pricing, to the extent feasible under market conditions at the time of liquidation and subject to any rules or orders of the relevant clearing organization, foreign clearing organization, designated contract market, swap execution facility, or foreign board of trade governing its liquidation of such open commodity contracts. If a futures commission merchant or foreign futures intermediary fails to use commercially reasonable efforts to liquidate open commodity contracts to achieve competitive pricing in accordance with this paragraph (e)(3), the trustee may seek damages reflecting the difference between the price (or prices) at which the relevant commodity contracts would have been liquidated using commercially reasonable efforts to achieve competitive pricing and the price (or prices) at which the commodity contracts were liquidated, which shall be the sole remedy available to the trustee. In no event shall any such liquidation be voided. (4) Liquidation only. (i) Nothing in this part shall be interpreted to permit the trustee to purchase or sell new commodity contracts for the debtor or its customers except to offset open commodity contracts or to transfer any transferable notice received by the debtor or the trustee under any commodity contract; provided, however, that the trustee may, in its discretion and with approval of the Commission, cover uncovered inventory or commodity contracts of the debtor which cannot be liquidated immediately because of price limits or other market conditions, or may take an offsetting position in a new month or at a strike price for which limits have not been reached. (ii) Notwithstanding paragraph (e)(4)(i) of this section, the trustee may, with the written permission of the Commission, operate the business of the debtor in the ordinary course, including the purchase or sale of new commodity contracts on behalf of the customers of the debtor under appropriate circumstances, as determined by the Commission. (f) Long option contracts. Subject to paragraphs (d) and (e) of this section, the trustee shall use its best efforts to assure that a commodity contract that is a long option contract with value does not expire worthless." 17:17:2.0.1.1.33.2.1.3,17,Commodity and Securities Exchanges,I,,190,PART 190—BANKRUPTCY RULES,B,Subpart B—Futures Commission Merchant as Debtor,,§ 190.05 Operation of the debtor's estate—general.,CFTC,,,,"(a) Compliance with the Act and regulations in this chapter. Except as specifically provided otherwise in this part, the trustee shall use reasonable efforts to comply with all of the provisions of the Act and of the regulations in this chapter as if it were the debtor. (b) Computation of funded balance. The trustee shall use reasonable efforts to compute a funded balance for each customer account that contains open commodity contracts or other property as of the close of business each business day subsequent to the order for relief until the date all open commodity contracts and other property in such account have been transferred or liquidated, which shall be as accurate as reasonably practicable under the circumstances, including the reliability and availability of information. (c) Records —(1) Maintenance. Except as otherwise ordered by the court or as permitted by the Commission, records required under this chapter to be maintained by the debtor, including records of the computations required by this part, shall be maintained by the trustee until such time as the debtor's case is closed. (2) Accessibility. The records required to be maintained by paragraph (c)(1) of this section shall be available during business hours to the Commission and the U.S. Department of Justice. The trustee shall give the Commission and the U.S. Department of Justice access to all records of the debtor, including records required to be retained in accordance with § 1.31 of this chapter and all other records of the commodity broker, whether or not the Act or this chapter would require such records to be maintained by the commodity broker. (d) Customer statements. The trustee shall use all reasonable efforts to continue to issue account statements with respect to any customer for whose account open commodity contracts or other property is held that has not been liquidated or transferred. With respect to such accounts, the trustee must also issue an account statement reflecting any liquidation or transfer of open commodity contracts or other property promptly after such liquidation or transfer. (e) Other matters —(1) Disbursements. With the exception of transfers of customer property made in accordance with § 190.07, the trustee shall make no disbursements to customers except with approval of the court. (2) Investment. The trustee shall promptly invest the proceeds from the liquidation of commodity contracts or specifically identifiable property, and may invest any other customer property, in obligations of the United States and obligations fully guaranteed as to principal and interest by the United States, provided that such obligations are maintained in a depository located in the United States, its territories or possessions. (f) Residual interest. The trustee shall apply the residual interest provisions of § 1.11 of this chapter in a manner appropriate to the context of their responsibilities as a bankruptcy trustee pursuant subchapter IV of chapter 7 of the Bankruptcy Code and this part, and in light of the existence of a surplus or deficit in customer property available to pay customer claims." 17:17:2.0.1.1.33.2.1.4,17,Commodity and Securities Exchanges,I,,190,PART 190—BANKRUPTCY RULES,B,Subpart B—Futures Commission Merchant as Debtor,,§ 190.06 Making and taking delivery under commodity contracts.,CFTC,,,,"(a) Deliveries —(1) General. The provisions of this paragraph (a) apply to commodity contracts that settle upon expiration or exercise by making or taking delivery of physical delivery property, if such commodity contracts are in a delivery position on the filing date, or the trustee is unable to liquidate such commodity contracts in accordance with § 190.04(c) to prevent them from moving into a delivery position, i.e., before the debtor or its customer incurs bilateral contractual obligations to make or take delivery under such commodity contracts. (2) Delivery made or taken on behalf of a customer outside of the administration of the debtor's estate. (i) The trustee shall use reasonable efforts to allow a customer to deliver physical delivery property that is held directly by the customer and not by the debtor (and thus not recorded in any commodity contract account of the customer) in settlement of a commodity contract, and to allow payment in exchange for such delivery, to occur outside the administration of the debtor's estate, when the rules of the exchange or other market listing the commodity contract, or the clearing organization or the foreign clearing organization clearing the commodity contract, as applicable, prescribe a process for delivery that allows the delivery to be fulfilled: (A) In the normal course directly by the customer; (B) By substitution of the customer for the commodity broker; or (C) Through agreement of the buyer and seller to alternative delivery procedures. (ii) Where a customer delivers physical delivery property in settlement of a commodity contract outside of the administration of the debtors' estate in accordance with paragraph (a)(2)(i) of this section, any property of such customer held at the debtor in connection with such contract must nonetheless 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. (3) Delivery as part of administration of the debtor's estate. When the trustee determines that it is not practicable to effect delivery as provided in paragraph (a)(2) of this section: (i) To facilitate the making or taking of delivery directly by a customer, the trustee may, as it determines reasonable under the circumstances of the case and consistent with the pro rata distribution of customer property by account class: (A) When a customer is obligated to make delivery, return any physical delivery property to the customer that is held by the debtor for or on behalf of the customer under the terms set forth in § 190.09(d)(1)(ii), to allow the customer to deliver such property to fulfill its delivery obligation under the commodity contract; or (B) When a customer is obligated to take delivery: ( 1 ) Return any cash delivery property to the customer that is reflected in the customer's delivery account, provided that cash delivery property returned under this paragraph (a)(3)(i)(B)( 1 ) shall not exceed the lesser of: ( i ) The amount the customer is required to pay for delivery of the commodity; or ( ii ) The customer's net funded balance for all of the customer's commodity contract accounts; ( 2 ) Return cash, securities, or other property held in the customer's non-delivery commodity contract accounts, provided that property returned under this section shall not exceed the lesser of: ( i ) The amount the customer is required to pay for delivery of the commodity; or ( ii ) The net funded balance for all of the customer's commodity contract accounts reduced by any amount returned to the customer pursuant to paragraph (a)(3)(i)(B)( 1 ) of this section, and provided further, however, that the trustee may distribute such property only to the extent that the customer's funded balance for each such account exceeds the minimum margin obligations for such account (as described in § 190.04(b)(2)); and (C) Impose such conditions on the customer as it considers appropriate to assure that property returned to the customer is used to fulfill the customer's delivery obligations. (ii) If the trustee does not return physical delivery property, cash delivery property, or other property in the form of cash or cash equivalents to the customer as provided in paragraph (a)(3)(i) of this section, subject to paragraph (a)(4) of this section: (A) To the extent practical, the trustee shall make or take delivery of physical delivery property in the same manner as if no bankruptcy had occurred, and when making delivery, the party to which delivery is made must pay the full price required for taking such delivery; or (B) When taking delivery of physical delivery property: ( 1 ) The trustee shall pay for the delivery first using the customer's cash delivery property or other property, limited to the amounts set forth in paragraph (a)(3)(i)(B) of this section, along with any cash transferred by the customer to the trustee on or after the filing date for the purpose of paying for delivery. ( 2 ) If the value of the cash or cash equivalents that may be used to pay for deliveries as described in paragraph (a)(3)(i)(B) of this section is less than the amount required to be paid for taking delivery, the trustee shall issue a payment call to the customer. The full amount of any payment made by the customer in response to a payment call must be credited to the funded balance of the particular account for which such payment is made. ( 3 ) If the customer fails to meet a call for payment under paragraph (a)(3)(ii)(B)( 2 ) of this section before payment is made for delivery, the trustee must convert any physical delivery property received on behalf of the customer to cash as promptly as possible. (4) Deliveries in a securities account. If an open commodity contract held in a futures account, foreign futures account, or cleared swaps account requires delivery of a security upon expiration or exercise of such commodity contract, and delivery is not completed pursuant to paragraph (a)(2) or (a)(3)(i) of this section, the trustee may make or take delivery in a securities account in a manner consistent with paragraph (a)(3)(ii) of this section, provided, however, that the trustee may transfer property from the customer's commodity contract accounts to the securities account to fulfill the delivery obligation only to the extent that the customer's funded balance for such commodity contract account exceeds the customer's minimum margin obligations for such accounts (as described in § 190.04(b)(2)) and provided further that the customer is not under-margined or does not have a deficit balance in any other commodity contract accounts. (5) Delivery made or taken on behalf of proprietary account. If delivery of physical delivery property is to be made or taken on behalf of the debtor's own account or the account of any non-public customer of the debtor, the trustee shall make or take delivery, as the case may be, on behalf of the debtor's estate, provided that if the trustee takes delivery of physical delivery property it must convert such property to cash as promptly as possible. (b) Special account class provisions for delivery accounts. (1) Within the delivery account class, the trustee shall treat— (i) Physical delivery property held in delivery accounts as of the filing date, and the proceeds of any such physical delivery property subsequently received, as part of the physical delivery account class; and (ii) Cash delivery property in delivery accounts as of the filing date, along with any physical delivery property for which delivery is subsequently taken on behalf of a customer in accordance with paragraph (a)(3) of this section, as part of a separate cash delivery account class. (2)(i) If the debtor holds any cash or cash equivalents in an account maintained at a bank, clearing organization, foreign clearing organization, or other person, under a name or in a manner that clearly indicates that the account holds property for the purpose of making payment for taking delivery, or receiving payment for making delivery, of a commodity under commodity contracts, such property shall (subject to § 190.09) be considered customer property— (A) In the cash delivery account class if held for making payment for taking delivery; and (B) In the physical delivery account class, if held as a result of receiving such payment for a making delivery after the filing date. (ii) Any other property (excluding property segregated for the benefit of customer in the futures, foreign futures or cleared swaps account class) that is traceable as having been held or received for the purpose of making delivery, or as having been held or received as a result of taking delivery, of a commodity under commodity contracts, shall (subject to § 190.09) be considered customer property— (A) In the cash delivery account class if received after the filing date in exchange for taking delivery; and (B) Otherwise shall be considered customer property in the physical delivery account class." 17:17:2.0.1.1.33.2.1.5,17,Commodity and Securities Exchanges,I,,190,PART 190—BANKRUPTCY RULES,B,Subpart B—Futures Commission Merchant as Debtor,,§ 190.07 Transfers.,CFTC,,,,"(a) Transfer rules. No clearing organization or self-regulatory organization may adopt, maintain in effect, or enforce rules that: (1) Are inconsistent with the provisions of this part; (2) Interfere with the acceptance by its members of transfers of commodity contracts, and the property margining or securing such contracts, from futures commission merchants that are required to transfer accounts pursuant to § 1.17(a)(4) of this chapter; or (3) Interfere with the acceptance by its members of transfers of commodity contracts, and the property margining or securing such contracts, from a futures commission merchant that is a debtor as defined in § 190.01, if such transfers have been approved by the Commission, provided, however, that this paragraph (a)(3) shall not— (i) Limit the exercise of any contractual right of a clearing organization or other registered entity to liquidate or transfer open commodity contracts; or (ii) Be interpreted to limit a clearing organization's ability adequately to manage risk. (b) Requirements for transferees. (1) It is the duty of each transferee to assure that it will not accept a transfer that would cause the transferee to be in violation of the minimum financial requirements set forth in this chapter. (2) Any transferee that accepts a transfer of open commodity contracts from the estate of the debtor— (i) Accepts the transfer subject to any loss that may arise in the event the transferee cannot recover from the customer any deficit balance that may arise related to the transferred open commodity contracts. (ii) If the commodity contracts were held for the account of a customer: (A) Must keep such commodity contracts open at least one business day after their 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 commodity contracts and the margin which such transferee would require with respect to a similar set of commodity contracts held for the account of a customer in the ordinary course of business; and (B) May not collect commissions with respect to the transfer of such commodity contracts. (3) A transferee may accept open commodity contracts and property, and open accounts on its records, for customers whose commodity contracts and property are transferred pursuant to this part prior to completing customer diligence, provided that account opening diligence as required by law (including the risk disclosures referred to in § 1.65(a)(3) of this chapter) is performed, and records and information required by law are obtained, as soon as practicable, but in any event within six months of the transfer, unless this time is extended for a particular account, transferee, or debtor by the Commission. (4)(i) Any account agreements governing a transferred account (including an account that has been partially transferred) shall be deemed assigned to the transferee by operation of law and shall govern the transferee and customer's relationship until such time as the transferee and customer enter into a new agreement; provided, however, that any breach of such agreement by the debtor existing at or before the time of the transfer (including, but not limited to, any failure to segregate sufficient customer property) shall not constitute a default or breach of the agreement on the part of the transferee, or constitute a defense to the enforcement of the agreement by the transferee. (ii) Paragraph (b)(4)(i) of this section shall not apply where the customer has a pre-existing account agreement with the transferee futures commission merchant. In such a case, the transferred account will be governed by that pre-existing account agreement. (5) If open commodity contracts or any specifically identifiable property has been, or is to be, transferred in accordance with section 764(b) of the Bankruptcy Code and this section, customer instructions previously received by the trustee with respect to open commodity contracts or with respect to specifically identifiable property, shall be transmitted to the transferee of property, which shall comply therewith to the extent practicable. (c) Eligibility for transfer under section 764(b) of the Bankruptcy Code—accounts eligible for transfer. All commodity contract accounts (including accounts with no open commodity contract positions) are eligible for transfer after the order for relief pursuant to section 764(b) of the Bankruptcy Code, except: (1) The debtor's own account or the accounts of general partners of the debtor if the debtor is a partnership; and (2) Accounts that are in deficit. (d) Special rules for transfers under section 764(b) of the Bankruptcy Code —(1) Effecting transfer. The trustee for a commodity broker shall use its best efforts to effect a transfer to one or more other commodity brokers of all eligible commodity contract accounts, open commodity contracts and property held by the debtor for or on behalf of its customers, based on customer claims or record, no later than the seventh calendar day after the order for relief. (2) Partial transfers; multiple transferees —(i) Of the customer estate. If all eligible commodity contract 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. Commodity contract accounts may be transferred to one or more transferees, and, subject to paragraph (d)(4) of this section, may be transferred to different transferees by account class. (ii) Of a customer's commodity contract account. If all of a customer's open commodity contracts and property cannot be transferred under this section, a partial transfer of contracts and property may be made so long as such transfer would not result in an increase in the amount of any customer's net equity claim. One, but not the only, means to effectuate a partial transfer is by liquidating a portion of the open commodity contracts held by a customer such that sufficient value is realized, or margin requirements are reduced to an extent sufficient, to permit the transfer of some or all of the remaining open commodity contracts and property. If any open commodity contract to be transferred in a partial transfer is part of a spread or straddle, to the extent practicable under the circumstances, each side of such spread or straddle must be transferred or none of the open commodity contracts comprising the spread or straddle may be transferred. (3) Letters of credit. A letter of credit received, acquired, or held to margin, guarantee, secure, purchase, or sell a commodity contract may be transferred with an eligible commodity contract account if it is held by a derivatives clearing organization on a pass-through or other basis or is transferable by its terms, so long as the transfer will not result in a recovery which exceeds the amount to which the customer would be entitled under §§ 190.08 and 190.09. If the letter of credit cannot be transferred as provided for in the foregoing sentence, and the customer does not deliver substitute customer property to the trustee in accordance with § 190.04(d)(3), the trustee may draw upon a portion or all of the letter of credit, the proceeds of which shall be treated as customer property in the applicable account class. (4) Physical delivery property. The trustee shall use reasonable efforts to prevent physical delivery property held for the purpose of making delivery on a commodity contract from being transferred separate and apart from the related commodity contract, or to a different transferee. (5) No prejudice to other customers. No transfer shall be made under this part by the trustee if, after taking into account all customer property available for distribution to customers in the applicable account class at the time of the transfer, such transfer would result in insufficient remaining customer property to make an equivalent percentage distribution (including all previous transfers and distributions) to all customers in the applicable account class, based on— (i) Customer claims of record; and (ii) Estimates of other customer claims made in the trustee's reasonable discretion based on available information, in each case as of the calendar day immediately preceding transfer. (e) Prohibition on avoidance of transfers under section 764(b) of the Bankruptcy Code —(1) Pre-relief transfers. Notwithstanding the provisions of paragraphs (c) and (d) of this section, the following transfers are approved and may not be avoided under sections 544, 546, 547, 548, 549, or 724(a) of the Bankruptcy Code: (i) The transfer of commodity contract accounts or customer property 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; (ii) The transfer, withdrawal, or settlement, prior to the order for relief at the request of a public customer, including a transfer, withdrawal, or settlement at the request of a public customer that is a commodity broker, of commodity contract accounts or customer property 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 customer property or the bankruptcy estate than that to which it would be entitled under this part; or (B) The transfer is disapproved by the Commission; (iii) The transfer prior to the order for relief by a clearing organization, or by a receiver that has been appointed for the futures commission merchant (FCM) that is now a debtor, of one or more accounts held for or on behalf of customers of the debtor, or of commodity contracts and other customer property held for or on behalf of customers of the debtor, provided that the transfer is not disapproved by the Commission. (2) Post-relief transfers. Notwithstanding the provisions of paragraphs (c) and (d) of this section, the following transfers are approved and may not be avoided under sections 544, 546, 547, 548, 549, or 724(a) of the Bankruptcy Code: (i) The transfer of a commodity contract account or customer property eligible to be transferred under paragraphs (c) and (d) of this section made by the trustee or by any clearing organization on or before the seventh calendar day after the entry of the order for relief, as to which the Commission has not disapproved the transfer; or (ii) The transfer of a commodity contract account or customer property 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. (f) Commission action. Notwithstanding any other provision of this section (other than paragraphs (d)(2)(ii) and (d)(5) of this section), in appropriate cases and to protect the public interest, the Commission may: (1) Prohibit the transfer of a particular set or sets of commodity contract accounts and customer property; or (2) Permit transfers of a particular set or sets of commodity contract accounts and customer property that do not comply with the requirements of this section." 17:17:2.0.1.1.33.2.1.6,17,Commodity and Securities Exchanges,I,,190,PART 190—BANKRUPTCY RULES,B,Subpart B—Futures Commission Merchant as Debtor,,§ 190.08 Calculation of funded net equity.,CFTC,,,,"For purposes of this subpart, funded net equity shall be computed as follows: (a) Funded claim. The funded net equity claim of a customer shall be equal to the aggregate of the funded balances of such customer's net equity claim for each account class. (b) Net equity. Net equity means a customer's total customer claim of record against the estate of the debtor based on the customer property, including any commodity contracts, held by the debtor for or on behalf of such customer less any indebtedness of the customer to the debtor. Net equity shall be calculated as follows: (1) Step 1-equity determination. (i) Determine the equity balance of each commodity contract account of a customer by computing, with respect to such account, the sum of: (A) The ledger balance; (B) The open trade balance; and (C) The realizable market value, determined as of the close of the market on the last preceding market day, of any securities or other property held by or for the debtor from or for such account, plus accrued interest, if any. (ii) For the purposes of this paragraph (b)(1), the ledger balance of a customer account shall be calculated by: (A) Adding: ( 1 ) Cash deposited to purchase, margin, guarantee, secure, or settle a commodity contract; ( 2 ) Cash proceeds of liquidations of any securities or other property referred to in paragraph (b)(1)(i)(C) of this section; ( 3 ) Gains realized on trades; and ( 4 ) The face amount of any letter of credit received, acquired or held to margin, guarantee, secure, purchase or sell a commodity contract; and (B) Subtracting from the result: ( 1 ) Losses realized on trades; ( 2 ) Disbursements to or on behalf of the customer (including, for these purposes, transfers made pursuant to §§ 190.04(a) and 190.07); and ( 3 ) The normal costs attributable to the payment of commissions, brokerage, interest, taxes, storage, transaction fees, insurance, and other costs and charges lawfully incurred in connection with the purchase, sale, exercise, or liquidation of any commodity contract in such account. (iii) For purposes of this paragraph (b)(1), the open trade balance of a customer's account shall be computed by subtracting the unrealized loss in value of the open commodity contracts held by or for such account from the unrealized gain in value of the open commodity contracts held by or for such account. (iv) For purposes of this paragraph (b)(1), in calculating the ledger balance or open trade balance of any customer, exclude any security futures products, any gains or losses realized on trades in such products, any property received to margin, guarantee, or secure such products (including interest thereon or the proceeds thereof), to the extent any of the foregoing are held in a securities account, and any disbursements to or on behalf of such customer in connection with such products or such property held in a securities account. (2) Step 2-customer determination (aggregation). Aggregate the credit and debit equity balances of all accounts of the same class held by a customer in the same capacity. Paragraphs (b)(2)(i) through (xii) of this section prescribe which accounts must be treated as being held in the same capacity and which accounts must be treated as being held in a separate capacity. (i) Except as otherwise provided in this paragraph (b)(2), all accounts that are maintained with a debtor in a person's name and that, under this paragraph (b)(2), are deemed to be held by that person in its individual capacity shall be deemed to be held in the same capacity. (ii) An account maintained with a debtor by a guardian, custodian, or conservator for the benefit of a ward, or for the benefit of a minor under the Uniform Gift to Minors Act, shall be deemed to be held in a separate capacity from accounts held by such guardian, custodian or conservator in its individual capacity. (iii) An account maintained with a debtor in the name of an executor or administrator of an estate in its capacity as such shall be deemed to be held in a separate capacity from accounts held by such executor or administrator in its individual capacity. (iv) An account maintained with a debtor in the name of a decedent, in the name of the decedent's estate, or in the name of the executor or administrator of such estate in its capacity as such shall be deemed to be accounts held in the same capacity. (v) An account maintained with a debtor by a trustee shall be deemed to be held in the individual capacity of the grantor of the trust unless the trust is created by a valid written instrument for a purpose other than avoidance of an offset under the regulations contained in this part. A trust account which is not deemed to be held in the individual capacity of its grantor under this paragraph (b)(2)(v) shall be deemed to be held in a separate capacity from accounts held in an individual capacity by the trustee, by the grantor or any successor in interest of the grantor, or by any trust beneficiary, and from accounts held by any other trust. (vi) An account maintained with a debtor by a corporation, partnership, or unincorporated association shall be deemed to be held in a separate capacity from accounts held by the shareholders, partners or members of such corporation, partnership, or unincorporated association, if such entity was created for purposes other than avoidance of an offset under the regulations contained in this part. (vii) A hedging account of a person shall be deemed to be held in the same capacity as a speculative account of such person. (viii) Subject to paragraphs (b)(2)(ix) and (xiv) of this section, the futures accounts, foreign futures accounts, delivery accounts, and cleared swaps accounts of the same person shall not be deemed to be held in separate capacities: Provided, however, that such accounts may be aggregated only in accordance with paragraph (b)(3) of this section. (ix) An omnibus customer account for public customers of a futures commission merchant maintained with a debtor shall be deemed to be held in a separate capacity from any omnibus customer account for non-public customers of such futures commission merchant and from any account maintained with the debtor on its own behalf or on behalf of any non-public customer. (x) A joint account maintained with the debtor shall be deemed to be held in a separate capacity from any account held in an individual capacity by the participants in such account, from any account held in an individual capacity by a commodity pool operator or commodity trading advisor for such account, and from any other joint account; provided, however, that if such account is not transferred in accordance with §§ 190.04(a) and 190.07, it shall be deemed to be held in the same capacity as any other joint account held by identical participants and a participant's percentage interest therein shall be deemed to be held in the same capacity as any account held in an individual capacity by such participant. (xi) An account maintained with a debtor in the name of a plan that is subject to the terms of the Employee Retirement Income Security Act of 1974 and the regulations in 29 CFR chapter XXV, or similar state, Federal, or foreign laws or regulations applicable to retirement or pension plans, shall be deemed to be held in a separate capacity from an account held in an individual capacity by the plan administrator, any employer, employee, participant, or beneficiary with respect to such plan. (xii) Except as otherwise provided in this section, an account maintained with a debtor by an agent or nominee for a principal or a beneficial owner shall be deemed to be an account held in the individual capacity of such principal or beneficial owner. (xiii) With respect to the cleared swaps account class, each individual cleared swaps customer account within each cleared swap omnibus customer account referred to in paragraph (b)(2)(viii) of this section shall be deemed to be held in a separate capacity from each other such individual cleared swaps customer account, subject to the provisions of paragraphs (b)(2)(i) through (xi) of this section. (xiv) Accounts held by a customer in separate capacities shall be deemed to be accounts of different customers. The burden of proving that an account is held in a separate capacity shall be upon the customer. (3) Step 3-setoffs. (i) The net equity of one customer account may not be offset against the net equity of any other customer account. (ii) Any obligation to the debtor owed by a customer which is not required to be included in computing the equity of that customer under paragraph (b)(1) of this section (defined as x), must be deducted from any obligation to the customer owed by the debtor which is not required to be included in computing the equity of that customer (defined as y). If the former amount (x) exceeds the latter (y), the excess (x-y) must be deducted from the equity balance of the customer obtained after performing the preceding calculations required by paragraph (b) of this section, provided, that if the customer owns more than one class of accounts with a positive equity balance, the excess (again, x-y) must be allocated and offset against each positive equity balance in the same proportion as that positive equity balance bears to the total of all positive equity balances of accounts of different classes held by such customer. (iii) A negative equity balance obtained with respect to one customer account class must be set off against a positive equity balance in any other account class of such customer held in the same capacity, provided, that if a customer owns more than one class of accounts with a positive equity balance, such negative equity balance must be offset against each positive equity balance in the same proportion as that positive equity balance bears to the total of all positive equity balances in accounts of different classes held by such customer. (iv) To the extent any indebtedness of the debtor to the customer which is not required to be included in computing the equity of such customer under paragraph (b)(1) of this section exceeds such indebtedness of the customer to the debtor, the customer claim therefor will constitute a general creditor claim rather than a customer property claim, and the net equity therefor shall be separately calculated. (v) The rules pertaining to separate capacities and permitted setoffs contained in this section shall only be applied subsequent to the entry of an order for relief; prior to that date, the provisions of § 1.22 of this chapter and of sections 4d(a)(2) and 4d(f) of the Act (and, in each case, the regulations in part 1, 22, or 30 of this chapter that implement sections 4d(a)(2) and 4d(f)) shall govern what setoffs are permitted. (4) Step 4-correction for distributions. The value on the date of transfer or distribution of any property transferred or distributed subsequent to the filing date and prior to the primary liquidation date with respect to each class of account held by a customer must be added to the equity obtained for that customer for accounts of that class after performing the steps contained in paragraphs (b)(1) through (3) of this section: Provided, however, that if all accounts for which there are customer claims of record and 100% of the equity pertaining thereto is transferred in accordance with § 190.07 and section 764(b) of the Bankruptcy Code, net equity shall be computed based solely upon those allowed customer claims, if any, filed subsequent to the order for relief which are not claims of record on the filing date. (5) Step 5-correction for ongoing events. Compute any adjustments to the steps in paragraphs (b)(1) through (4) of this section required to correct misestimates or errors including, without limitation, corrections for ongoing events such as the liquidation of unliquidated claims or specifically identifiable property at a value different from the estimated value previously used in computing net equity. (c) Calculation of funded balance. Funded balance means a customer's pro rata share of the customer estate with respect to each account class available for distribution to customers of the same customer class. (1) Funded balance computation. The funded balance of any customer claim shall be computed (separately by account class and customer class) by: (i) Multiplying the ratio of the amount of the net equity claim of such customer (defined as x) less the amounts referred to in paragraph (c)(1)(ii) of this section of such customer for any account class (defined as y) divided by the sum of the net equity claims of all customers for accounts of that class (defined as p) less the amounts referred to in paragraph (c)(1)(ii) of this section of all customers for accounts of that class (defined as q) (thus, ((x-y)/(p-q)) by the sum of: (A) The value of letters of credit received, acquired, or held to margin, guarantee, secure, purchase, or sell a commodity contract relating to all customer accounts of the same class; (B) The value of the money, securities, or other property segregated on behalf of all customer accounts of the same class less the amounts referred to in paragraph (c)(1)(ii) of this section; (C) The value of any money, securities, or other property which must be allocated under § 190.09 to all customer accounts of the same class; and (D) The amount of any add-back required under paragraph (b)(4) of this section; and (ii) Then adding 100% of— (A) Any margin payment made between the entry of the order for relief (or, in an involuntary case, the date on which the petition for bankruptcy is filed) and the primary liquidation date; provided, however, that if margin is posted to substitute for a letter of credit, such margin does not increase the funded balance; and (B) For cash delivery property, any cash transferred to the trustee on or after the filing date for the purpose of paying for delivery. (2) Corrections to funded balance. The funded balance must be adjusted to correct for ongoing events including, without limitation: (i) Added claimants; (ii) Disallowed claims; (iii) Liquidation of unliquidated claims at a value other than their estimated value; and (iv) Recovery of property. (d) Valuation. In computing net equity, commodity contracts and other property held by or for a commodity broker must be valued as provided in this paragraph (d). (1) Commodity contracts —(i) Open contracts. Unless otherwise specified in this paragraph (d), the value of an open commodity contract shall be equal to the settlement price as calculated by the clearing organization pursuant to its rules; provided, however, that if an open commodity contract is transferred to another commodity broker, its value on the debtor's books and records shall be determined as of the end of the last settlement cycle on the day preceding such transfer. (ii) Liquidated contracts. Except as specified in paragraphs (d)(1)(ii)(A) and (B) of this section, the value of a commodity contract liquidated on the open market shall equal the actual value realized on liquidation of the commodity contract. (A) Weighted average. If identical commodity contracts are liquidated within a 24-hour period or business day (or such other period as the bankruptcy court may determine is appropriate) as part of a general liquidation of commodity contracts, but cannot be liquidated at the same price, the trustee may use the weighted average of the liquidation prices in computing the net equity of each customer for which the debtor held such commodity contracts. (B) Bulk liquidation. The value of a commodity contract liquidated as part of a bulk auction, taken into inventory or under management by a clearing organization, or similarly liquidated outside of the open market shall be equal to the settlement price calculated by the clearing organization as of the end of the settlement cycle during which the commodity contract was liquidated. (2) Securities. The value of a listed security shall be equal to the closing price for such security on the exchange upon which it is traded. The value of all securities not traded on an exchange shall be equal in the case of a long position, to the average of the bid prices for long positions, and in the case of a short position, to the average of the asking prices for the short positions. If liquidated, the value of such security shall be equal to the actual value realized on liquidation of the security; provided, however, that if identical securities are liquidated within a 24-hour period or business day (or such other period as the bankruptcy court may determine is appropriate) as part of a general liquidation of securities, but cannot be liquidated at the same price, the trustee may use the weighted average of the liquidation prices in computing the net equity of each customer for which the debtor held such securities. Securities which are not publicly traded shall be valued by the trustee pursuant to paragraph (d)(5) of this section. (3) Commodities held in inventory. Commodities held in inventory, as collateral or otherwise, shall be valued at their fair market value. If such fair market value is not readily ascertainable based upon public sources of prices, the trustee shall value such commodities pursuant to paragraph (d)(5) of this section. (4) Letters of credit. The value of any letter of credit received, acquired or held to margin, guarantee, secure, purchase, or sell a commodity contract shall be its face amount, less the amount, if any, drawn and outstanding, provided that, if the trustee makes a determination in good faith that a draw on a letter of credit is unlikely to be honored on either a temporary or a permanent basis, the trustee shall value the letter of credit pursuant to paragraph (d)(5) of this section. (5) All other property. Subject to the other provisions of this paragraph (d), all other property shall be valued by the trustee using such professional assistance as the trustee deems necessary in its sole discretion under the circumstances; provided, however, that if such property is sold, its value for purposes of the calculations required by this part shall be equal to the actual value realized on the sale of such property; and, provided further, that the sale shall be made in compliance with all applicable statutes, rules, and orders of any court or governmental entity with jurisdiction there over." 17:17:2.0.1.1.33.2.1.7,17,Commodity and Securities Exchanges,I,,190,PART 190—BANKRUPTCY RULES,B,Subpart B—Futures Commission Merchant as Debtor,,§ 190.09 Allocation of property and allowance of claims.,CFTC,,,,"The property of the debtor's estate must be allocated among account classes and between customer classes as provided in this section. (Property connected with certain cross-margining arrangements is subject to the provisions of framework 1 in appendix B to this part.) The property so allocated will constitute a separate estate of the customer class and the account class to which it is allocated, and will be designated by reference to such customer class and account class. (a) Scope of customer property. (1) Customer property includes the following: (i) All cash, securities, or other property or the proceeds of such cash, securities, or other property received, acquired, or held by or for the account of the debtor, from or for the account of a customer, including a non-public customer, which is: (A) Property received, acquired, or held to margin, guarantee, secure, purchase or sell a commodity contract; (B) Open commodity contracts; (C) Physical delivery property as that term is defined in paragraphs (1) through (3) in the definition of that term in § 190.01; (D) Cash delivery property, or other cash, securities, or other property received by the debtor as payment for a commodity to be delivered to fulfill a commodity contract from or for the commodity customer account of a customer; (E) Profits or contractual rights accruing to a customer as the result of a commodity contract; (F) Letters of credit, including any proceeds of a letter of credit drawn by the trustee, or substitute customer property posted by the customer, pursuant to § 190.04(d)(3); (G) Securities held in a portfolio margining account carried as a futures account or a cleared swaps customer account; or (H) Property hypothecated under § 1.30 of this chapter to the extent that the value of such property exceeds the proceeds of any loan of margin made with respect thereto; and (ii) All cash, securities, or other property which: (A) Is segregated for customers on the filing date; (B) Is a security owned by the debtor to the extent there are customer claims for securities of the same class and series of an issuer; (C) Is specifically identifiable to a customer; (D) Was property of a type described in paragraph (a)(1)(i)(A) of this section that is subsequently recovered by the avoidance powers of the trustee or is otherwise recovered by the trustee on any other claim or basis; (E) Represents recovery of any debit balance, margin deficit, or other claim of the debtor against a customer; (F) Was unlawfully converted but is part of the debtor's estate; (G) Constitutes current assets of the debtor (as of the date of the order for relief) within the meaning of § 1.17(c)(2) of this chapter, including the debtor's trading or operating accounts and commodities of the debtor held in inventory, in the greater of— ( 1 ) The amount that the debtor is obligated to set aside as its targeted residual interest amount pursuant to § 1.11 of this chapter and the debtor's residual interest policies adopted thereunder, with respect to each of the futures account class, the foreign futures account class, and the cleared swaps account class; or ( 2 ) The debtor's obligations to cover debit balances or under-margined amounts as provided in §§ 1.20, 1.22, 22.2, and 30.7 of this chapter; (H) Is other property of the debtor that any applicable law, rule, regulation, or order requires to be set aside for the benefit of customers; (I) Is property of the debtor's estate recovered by the Commission in any proceeding brought against the principals, agents, or employees of the debtor; (J) Is proceeds from the investment of customer property by the trustee pending final distribution; (K) Is a payment from an insurer to the trustee arising from or related to a claim related to the conversion or misuse of customer property; or (L) Is cash, securities, or other property of the debtor's estate, including the debtor's trading or operating accounts and commodities of the debtor held in inventory, but only to the extent that the property enumerated in paragraphs (a)(1)(i)(F) and (a)(1)(ii)(A) through (K) of this section is insufficient to satisfy in full all claims of public customers. Such property includes “customer property,” as defined in section 16(4) of SIPA, 15 U.S.C. 78lll(4), that remains after allocation in accordance with section 8(c)(1)(A)-(D) of SIPA, 15 U.S.C. 78fff-2(c)(1)(A)-(D) and that is allocated to the debtor's general estate in accordance with section 8(c)(1) of SIPA, 15 U.S.C. 78fff-2(c)(1). (2) Customer property will not include: (i) Claims against the debtor for damages for any wrongdoing of the debtor, including claims for misrepresentation or fraud, or for any violation of the Act or of the regulations in this chapter; (ii) Other claims for property which are not based upon property received, acquired, or held by or for the account of the debtor, from or for the account of the customer; (iii) Forward contracts (unless such contracts are cleared by a clearing organization or, in the case of forward contracts treated as foreign futures, a foreign clearing organization); (iv) Physical delivery property that is not held by the debtor, and is delivered or received by a customer in accordance with § 190.06(a)(2) or § 190.16(a) to fulfill the customer's delivery obligation under a commodity contract; (v) Property deposited by a customer with a commodity broker after the entry of an order for relief which is not necessary to meet the margin requirements applicable to the accounts of such customer; (vi) Property hypothecated pursuant to § 1.30 of this chapter to the extent of the loan of margin with respect thereto; (vii) Money, securities, or property held to margin, guarantee or secure security futures products, or accruing as a result of such products, if held in a securities account; and (viii) Money, securities, or property held in a securities account to fulfill delivery, under a commodity contract from or for the account of a customer, as described in § 190.06(b)(2). (3) Nothing contained in this section, including, but not limited to, the satisfaction of customer claims by operation of this section, shall prevent a trustee from asserting claims against any person to recover the shortfall of property enumerated in paragraphs (a)(1)(i)(F) and (a)(1)(ii)(A) through (L) of this section. (b) Allocation of customer property between customer classes. No customer property may be allocated to pay non-public customer claims until all public customer claims have been satisfied in full. Any property segregated on behalf of or attributable to non-public customers must be treated initially as part of the public customer estate and allocated in accordance with paragraph (c)(2) of this section. (c) Allocation of customer property among account classes —(1) Property identified to an account class —(i) Segregated property. Subject to paragraph (b) of this section, property held by or for the account of a customer, which is segregated on behalf of a specific account class, or readily traceable on the filing date to customers of such account class, or recovered by the trustee on behalf of or for the benefit of an account class, must be allocated to the customer estate of the account class for which it is segregated, to which it is readily traceable, or for which it is recovered. (ii) Excess property. If, after payment in full of all allowed customer claims in a particular account class, any property remains allocated to that account class, such excess shall be allocated in accordance with paragraph (c)(2) of this section. (2) All other property. Money, securities, and property received from or for the account of customers which cannot be allocated in accordance with paragraph (c)(1)(i) of this section, must be allocated in the following order: (i) To the estate of the account class for which, after the allocation required in paragraph (c)(1) of this section, the percentage of each public customer net equity claim which is funded is the lowest, until the funded percentage of net equity claims of such class equals the percentage of each public customer's net equity claim which is funded for the account class with the next lowest percentage of the funded claims; and then (ii) To the estate of the two account classes referred to in paragraph (c)(2)(i) of this section so that the percentage of the net equity claims which are funded for each class remains equal until the percentage of each public customer net equity claim which is funded equals the percentage of each public customer net equity claim which is funded for the account class with the next lowest percentage of funded claims, and so forth, until the percentage of each public customer net equity claim which is funded is equal for all classes of accounts; and then, (iii) Among account classes in the same proportion as the public customer net equity claims for each such account class bears to the total of public customer net equity claims of all account classes until the public customer claims of each account class are paid in full; and, thereafter, (iv) To the non-public customer estate for each account class in the same order as is prescribed in paragraphs (c)(2)(i) through (iii) of this section for the allocation of the customer estate among account classes. (d) Distribution of customer property —(1) Return or transfer of specifically identifiable property. Specifically identifiable property not required to be liquidated under § 190.04(d)(2) may be returned or transferred on behalf of the customer to which it is identified: (i) If it is margining an open commodity contract, only if substitute customer property is first deposited with the trustee with a value equal to the greater of the full fair market value of such property on the return date or the balance due on the return date on any loan by the debtor to the customer for which such property constitutes security; or (ii) If it is not margining an open commodity contract, at the option of the customer, either pursuant to the terms of paragraph (d)(1)(i) of this section, or pursuant to the following terms: Such customer first deposits substitute customer property with the trustee with a value equal to the amount by which the greater of the value of the specifically identifiable property to be transferred or returned on the date of such transfer or return or the balance due on the return date on any loan by the debtor to the customer for which such property constitutes security, together with any other disbursements made, or to be made, to such customer, plus a reasonable reserve in the trustee's sole discretion, exceeds the estimated aggregate of the funded balances for each class of account of such customer less the value on the date of its transfer or return of any property transferred or returned prior to the primary liquidation date with respect to the customer's net equity claim for such account; provided, however, that adequate security to assure the recovery of any overpayments by the trustee is provided to the debtor's estate by the customer. (2) Transfers of specifically identifiable commodity contracts under section 766 of the Bankruptcy Code. Any open commodity contract that is specifically identifiable property and which is not required to be liquidated under § 190.04(d), and which is not otherwise liquidated, may be transferred on behalf of a public customer, provided, however, that such customer must first deposit substitute customer property with the trustee with a value equal to the amount by which the equity to be transferred to margin such contract together with any other transfers or returns of specifically identifiable property or disbursements made, or to be made, to such customer, plus a reasonable reserve in the trustee's sole discretion, exceeds the estimated aggregate of the funded balances for each class of account of such customer less the value on the date of its transfer or return of any property transferred or returned prior to the primary liquidation date with respect to the customer's net equity claim for such account; and, provided further, that adequate security to assure the recovery of any overpayments by the trustee is provided to the debtor's estate by the customer. (3) Distribution in kind of specifically identifiable securities. If any securities of a customer are specifically identifiable property as defined in paragraph (1)(i)(A) of the definition of that term in § 190.01 of this chapter, but the customer has no open commodity contracts, the customer may request that the trustee purchase or otherwise obtain the largest whole number of like-kind securities ( i.e., securities of the same class and series of an issuer), with a fair market value (inclusive of transaction costs) which does not exceed that portion of the funded balance of such customer's allowed net equity claim that constitutes a claim for securities, if like-kind securities can be purchased in a fair and orderly manner. (4) Proof of customer claim. No distribution shall be made pursuant to paragraphs (d)(1) and (3) of this section prior to receipt of a completed proof of customer claim as described in § 190.03(e) or (f). (5) No differential distributions. No further disbursements may be made to customers with respect to a particular account class for whom transfers have been made pursuant to § 190.07 and paragraph (d)(2) of this section, until a percentage of each net equity claim equivalent to the percentage distributed to such customers is distributed to all public customers in such account class. Partial distributions, other than the transfers referred to in § 190.07 and paragraph (d)(2) of this section, with respect to a particular account class made prior to the final net equity determination date must be made pursuant to a preliminary plan of distribution approved by the court, upon notice to the parties and to all customers, which plan requires adequate security to the debtor's estate to assure the recovery of any overpayments by the trustee and distributes an equal percentage of net equity to all public customers in such account class." 17:17:2.0.1.1.33.2.1.8,17,Commodity and Securities Exchanges,I,,190,PART 190—BANKRUPTCY RULES,B,Subpart B—Futures Commission Merchant as Debtor,,§ 190.10 Current records during business as usual.,CFTC,,,,"A person that is a futures commission merchant is required to maintain current records relating to its customers' accounts, including copies of all account agreements and related account documentation, and “know your customer” materials, pursuant to §§ 1.31, 1.35, 1.36, and 1.37 of this chapter, which may be provided to another futures commission merchant to facilitate the transfer of open commodity contracts or other customer property held by such person for or on behalf of its customers to the other futures commission merchant, in the event an order for relief is entered with respect to such person." 17:17:2.0.1.1.33.3.1.1,17,Commodity and Securities Exchanges,I,,190,PART 190—BANKRUPTCY RULES,C,Subpart C—Clearing Organization as Debtor,,§ 190.11 Scope and purpose of this subpart.,CFTC,,,,"(a) This subpart applies to a proceeding commenced under subchapter IV of chapter 7 of the Bankruptcy Code in which the debtor is a clearing organization. (b) If the debtor clearing organization is organized outside the United States, and is subject to a foreign proceeding, as defined in 11 U.S.C. 101(23), in the jurisdiction in which it is organized, then only the following provisions of this part shall apply: (1) Subpart A. (2) Section 190.12. (3) Section 190.13, but only with respect to futures contracts and cleared swaps contracts cleared by FCM clearing members on behalf of their public customers and the property margining or securing such contracts. (4) Sections 190.17 and 190.18, but only with respect to claims of FCM clearing members on behalf of their public customers, as well as to property that is or should have been segregated for the benefit of FCM clearing members' public customers, or that has been recovered for the benefit of FCM clearing members' public customers." 17:17:2.0.1.1.33.3.1.2,17,Commodity and Securities Exchanges,I,,190,PART 190—BANKRUPTCY RULES,C,Subpart C—Clearing Organization as Debtor,,§ 190.12 Required reports and records.,CFTC,,,,"(a) Notices —(1) Means of providing —(i) To the Commission. Unless instructed otherwise by the Commission, all mandatory or discretionary notices to be given to the Commission under this subpart shall be directed by electronic mail to bankruptcyfilings@cftc.gov. For purposes of this subpart, notice to the Commission shall be deemed to be given only upon actual receipt. (ii) To members. The trustee, after consultation with the Commission, and unless otherwise instructed by the Commission, will establish and follow procedures reasonably designed for giving adequate notice to members under this subpart and for receiving claims or other notices from members. Such procedures should include, absent good cause otherwise, the use of a prominent website as well as communication to members' electronic addresses that are available in the debtor's books and records. (2) Of commencement of a proceeding. A debtor that files a petition in bankruptcy that is subject to this subpart shall, at or before the time of such filing, and a debtor against which such a petition is filed shall, as soon as possible, but in any event no later than three hours after the receipt of notice of such filing, notify the Commission of the filing date, the court in which the proceeding has been or will be filed, and, as soon as available, the docket number assigned to that proceeding by the court. (b) Reports and records to be provided to the trustee and the Commission within three hours. (1) As soon as practicable following the commencement of a proceeding that is subject to this subpart and in any event no later than three hours following the later of the commencement of such proceeding or the appointment of the trustee, the debtor shall provide to the trustee copies of each of the most recent reports that the debtor was required to file with the Commission under § 39.19(c) of this chapter, including copies of any reports required under § 39.19(c)(2), (3), and (4) of this chapter (including the most up-to-date version of any recovery and wind-down plans of the debtor maintained pursuant to § 39.39(b) of this chapter) that the debtor filed with the Commission during the preceding 12 months. (2) As soon as practicable following the commencement of a proceeding that is subject to this subpart and in any event no later than three hours following the commencement of such proceeding (or, with respect to the trustee, the appointment of the trustee), the debtor shall provide to the trustee and the Commission copies of the most up-to-date versions of the default management plan and default rules and procedures maintained by the debtor pursuant to § 39.16 and, as applicable, § 39.35 of this chapter. (c) Records to be provided to the trustee and the Commission by the next business day. As soon as practicable following commencement of a proceeding that is subject to this subpart and in any event no later than the next business day, the debtor shall make available to the trustee and the Commission copies of the following records: (1) All records maintained by the debtor described in § 39.20(a) of this chapter; and (2) Any opinions of counsel or other legal memoranda provided to the debtor (whether by external or internal counsel) in the five years preceding the commencement of such proceeding relating to the enforceability of the rules and procedures of the debtor in the event of an insolvency proceeding involving the debtor." 17:17:2.0.1.1.33.3.1.3,17,Commodity and Securities Exchanges,I,,190,PART 190—BANKRUPTCY RULES,C,Subpart C—Clearing Organization as Debtor,,§ 190.13 Prohibition on avoidance of transfers.,CFTC,,,,"The following transfers are approved and may not be avoided under sections 544, 546, 547, 548, 549, or 724(a) of the Bankruptcy Code: (a) Pre-relief transfers. Any transfer of open commodity contracts and the property margining or securing such contracts made to another clearing organization that was approved by the Commission, either before or after such transfer, and was made prior to entry of the order for relief; and (b) Post-relief transfers. Any transfers of open commodity contracts and the property margining or securing such contracts made to another clearing organization on or before the seventh calendar day after the entry of the order for relief, that was made with the approval of the Commission, either before or after such transfer." 17:17:2.0.1.1.33.3.1.4,17,Commodity and Securities Exchanges,I,,190,PART 190—BANKRUPTCY RULES,C,Subpart C—Clearing Organization as Debtor,,§ 190.14 Operation of the estate of the debtor subsequent to the filing date.,CFTC,,,,"(a) Proofs of claim. The trustee may, in its discretion based upon the facts and circumstances of the case, instruct each customer to file a proof of claim containing such information as is deemed appropriate by the trustee, and seek a court order establishing a bar date for the filing of such proofs of claim. (b) Operation of the derivatives clearing organization. Subsequent to the order for relief, the derivatives clearing organization shall cease making calls for variation settlement or initial margin. (c) Liquidation. (1) The trustee shall liquidate all open commodity contracts that have not been terminated, liquidated, or transferred no later than seven calendar days after entry of the order for relief. Such liquidation of open commodity contracts shall be conducted in accordance with the rules and procedures of the debtor, to the extent applicable and practicable. (2) In lieu of liquidating securities held by the debtor and making distributions in the form of cash, the trustee may, in its reasonable discretion, make distributions in the form of securities that are equivalent ( i.e., securities of the same class and series of an issuer) to the securities originally delivered to the debtor by a clearing member or such clearing member's customer. (d) Computation of funded balance. The trustee shall use reasonable efforts to compute a funded balance for each customer account immediately prior to any distribution of property within the account, which shall be as accurate as reasonably practicable under the circumstances, including the reliability and availability of information." 17:17:2.0.1.1.33.3.1.5,17,Commodity and Securities Exchanges,I,,190,PART 190—BANKRUPTCY RULES,C,Subpart C—Clearing Organization as Debtor,,§ 190.15 Recovery and wind-down plans; default rules and procedures.,CFTC,,,,"(a) Prohibition on avoidance of actions taken pursuant to recovery and wind-down plans. Subject to the provisions of section 766 of the Bankruptcy Code and §§ 190.13 and 190.18, the trustee shall not avoid or prohibit any action taken by a debtor subject to this subpart that was reasonably within the scope of and was provided for in any recovery and wind-down plans maintained by the debtor and filed with the Commission pursuant to § 39.39 of this chapter. (b) Implementation of debtor's default rules and procedures. In administering a proceeding under this subpart, the trustee shall implement, in consultation with the Commission, the default rules and procedures maintained by the debtor under § 39.16 and, as applicable, § 39.35 of this chapter and any termination, close-out and liquidation provisions included in the rules of the debtor, subject to the reasonable discretion of the trustee and to the extent that implementation of such default rules and procedures is practicable. (c) Implementation of recovery and wind-down plans. In administering a proceeding under this subpart, the trustee shall, in consultation with the Commission, take actions in accordance with any recovery and wind-down plans maintained by the debtor and filed with the Commission pursuant to § 39.39 of this chapter, to the extent reasonable and practicable, and consistent with the protection of customers." 17:17:2.0.1.1.33.3.1.6,17,Commodity and Securities Exchanges,I,,190,PART 190—BANKRUPTCY RULES,C,Subpart C—Clearing Organization as Debtor,,§ 190.16 Delivery.,CFTC,,,,"(a) General. In the event that a commodity contract, cleared by the derivatives clearing organization, that settles upon expiration or exercise by making or taking delivery of physical delivery property, has moved into delivery position prior to the date and time of the order for relief, or moves into delivery position after that date and time, but before being terminated, liquidated, or transferred, then, in either such event, the trustee must use reasonable efforts to facilitate and cooperate with the completion of delivery on behalf of the clearing member or the clearing member's customer in a manner consistent with § 190.06(a) and the pro rata distribution principle addressed in § 190.00(c)(5). (b) Special provisions for delivery accounts. (1) Consistent with the separation of the physical delivery property account class and the cash delivery account class set forth in § 190.06(b), the trustee shall treat— (i) Physical delivery property held in delivery accounts as of the filing date, along with the proceeds from any subsequent sale of such physical delivery property in accordance with § 190.06(a)(3) to fulfill a clearing member's or its customer's delivery obligation or any other subsequent sale of such property, as part of the physical delivery account class; and (ii) Cash delivery property in delivery accounts as of the filing date, along with any physical delivery property for which delivery is subsequently taken on behalf of a clearing member or its customer in accordance with § 190.06(a)(3), as part of the separate cash delivery account class. (2) If the debtor holds any cash or property in the form of cash equivalents in an account with a bank or other person under a name or in a manner that clearly indicates that the account holds property for the purpose of making payment for taking physical delivery, or receiving payment for making physical delivery, of a commodity under any commodity contracts, such property shall (subject to § 190.19) be considered customer property in the cash delivery account class if held for making payment for taking delivery, or in the physical delivery account class, if held for the purpose of receiving such payment." 17:17:2.0.1.1.33.3.1.7,17,Commodity and Securities Exchanges,I,,190,PART 190—BANKRUPTCY RULES,C,Subpart C—Clearing Organization as Debtor,,§ 190.17 Calculation of net equity.,CFTC,,,,"(a) Net equity-separate capacities and calculations. (1) If a member of the clearing organization clears trades in commodity contracts through a commodity contract account carried by the debtor as a customer account for the benefit of the clearing member's public customers and separately through a house account, the clearing member shall be treated as having customer claims against the debtor in separate capacities with respect to the customer account and house account at the clearing organization, and by account class. A member shall be treated as part of the public customer class with respect to claims based on any commodity customer accounts carried as “customer accounts” by the clearing organization for the benefit of the member's public customers, and as part of the non-public customer class with respect to claims based on its house account. (2) Net equity shall be calculated separately for each separate customer capacity in which the clearing member has a claim against the debtor, i.e., separately by the member's customer account and house account and by account class. (b) Net equity—application of debtor's loss allocation rules and procedures. (1)(i) The calculation of a clearing member's net equity claim shall include the full application of the debtor's loss allocation rules and procedures, including the default rules and procedures referred to in § 39.16 and, if applicable, § 39.35 of this chapter. (ii) The calculation in paragraph (b)(1)(i) of this section will include, with respect to the clearing member's house account, any assessments or similar loss allocation arrangements provided for under those rules and procedures that were not called for before the filing date, or, if called for, have not been paid. Such loss allocation arrangements shall be applied to the extent necessary to address losses arising from default by clearing members. (2) Appropriate adjustments shall be made to the net equity claims of the clearing members that are so entitled under the following circumstances: Where the debtor's loss allocation rules and procedures would entitle clearing members to additional payments of cash or other property due to— (i) Portions of mutualized default resources that are prefunded, or assessed and collected, but in either event not used; or (ii) The debtor's recoveries on claims against others (including, but not limited to, recoveries on claims against clearing members who have defaulted on their obligations to the debtor). (c) Net equity—general. Subject to paragraph (b) of this section, net equity shall be calculated in the manner provided in § 190.08, to the extent applicable. (d) Calculation of funded balance. Funded balance means a clearing member's pro rata share of customer property other than member property (for accounts for a clearing member's customer accounts) or member property (for a clearing member's house accounts) with respect to each account class available for distribution to customers of the same customer class, calculated in the manner provided in § 190.08(c) to the extent applicable." 17:17:2.0.1.1.33.3.1.8,17,Commodity and Securities Exchanges,I,,190,PART 190—BANKRUPTCY RULES,C,Subpart C—Clearing Organization as Debtor,,§ 190.18 Treatment of property.,CFTC,,,,"(a) General. The property of the debtor's estate must be allocated between member property and customer property other than member property as provided in this section to satisfy claims of clearing members, as customers of the debtor. The property so allocated will constitute a separate estate of the customer class ( i.e., member property, and customer property other than member property) and the account class to which it is allocated, and will be designated by reference to such customer class and account class. (b) Scope of customer property. Customer property is the property available for distribution within the relevant account class in respect of claims by clearing members, as customers of the clearing organization, based on customer accounts carried by the debtor for the benefit of such members' public customers or, considered separately, such members' house accounts. (1) Customer property includes the following: (i) All cash, securities, or other property, or the proceeds of such cash, securities, or other property, that is received, acquired, or held by or for the account of the debtor, from or for any commodity contract account of a clearing member carried by the debtor, which is: (A) Property received, acquired, or held, in order to margin, guarantee, secure, purchase, or sell a commodity contract; (B) Open commodity contracts; (C) Physical delivery property as that term is defined in paragraphs (1) through (3) of the definition of that term in § 190.01; (D) Cash, securities or other property received by the debtor as payment for a commodity to be delivered to fulfill a commodity contract from or for the commodity customer account of a clearing member or a customer of a clearing member; (E) Profits or contractual rights accruing as a result of a commodity contract; (F) Letters of credit, including any proceeds of a letter of credit drawn upon by the trustee, or substitute customer property posted by a clearing member or a customer of a clearing member, pursuant to § 190.04(d)(3); or (G) Securities held in a portfolio margining account carried as a futures account or a cleared swaps customer account; (ii) All cash, securities, or other property which: (A) Is segregated by the debtor on the filing date for the benefit of clearing members' house accounts or clearing members' public customer accounts; (B) Was of a type described in paragraph (b)(1)(i)(A) of this section that is subsequently recovered by the avoidance powers of the trustee or is otherwise recovered by the trustee on any other claim or basis; (C) Represents a recovery of any debit balance, margin deficit or other claim of the debtor against any commodity contract account carried for the benefit of a member's house accounts or a member's public customer accounts; (D) Was unlawfully converted but is part of the debtor's estate; or (E) Was of a type described in paragraphs (a)(1)(ii)(H) through (K) of § 190.09 (as if the term debtor used therein refers to a clearing organization as debtor); (iii) Any guaranty fund deposit, assessment, or similar payment or deposit made by a clearing member, or recovered by the trustee, to the extent any remains following administration of the debtor's default rules and procedures, and any other property of a member available under the debtor's rules and procedures to satisfy claims made by or on behalf of public customers of a member; and (iv) Amounts of its own funds that the debtor had committed as part of its loss allocation rules, to the extent that such amounts have not already been applied under such rules. (2) Customer property will not include property of the type described in § 190.09(a)(2), as if the term debtor used therein refers to a clearing organization and to the extent relevant to a clearing organization. (c) Allocation of customer property between customer classes. (1) Where the funded balance for members' house accounts is greater than one hundred percent with respect to any account class: (i) Any excess should be allocated to customer property other than member property to the extent that the funded balance is less than one hundred percent of net equity claims for members' public customers in any account class; and (ii) Any remaining excess after the application of paragraph (c)(1)(i) of this section should be allocated to member property to the extent that the funded balance is less than one hundred percent of net equity claims for members' house accounts in any other account class. (2) Where the funded balance for members' public customers in any account class is greater than one hundred percent: (i) Any excess should be allocated to customer property other than member property to the extent that the funded balance is less than one hundred percent of net equity claims for members' public customers in any other account class; and (ii) Any remaining excess after the application of paragraph (c)(2)(i) of this section should be allocated to member property to the extent that the funded balance is less than one hundred percent of net equity claims for members' house accounts in any account class. (d) Allocation of customer property among account classes —(1) Segregated property. Subject to paragraph (b) of this section, property held by or for the account of a customer, which is segregated on behalf of a specific account class within a customer class, or readily traceable on the filing date to customers of such account class within a customer class, or recovered by the trustee on behalf of or for the benefit of an account class within a customer class, must be allocated to the customer estate of the account class for which it is segregated, to which it is readily traceable, or for which it is recovered. (2) All other property. Customer property which cannot be allocated in accordance with paragraph (d)(1) of this section, shall be allocated within customer classes, but between account classes, in the following order: (i) To the estate of the account class for which the percentage of each members' net equity claim which is funded is the lowest, until the funded percentage of net equity claims of such account class equals the percentage of each members' net equity claim which is funded for the account class with the next lowest percentage of the funded claims; and then (ii) To the estate of the two account classes so that the percentage of the net equity claims which are funded for each such account class remains equal until the percentage of each net equity claim which is funded equals the percentage of each net equity claim which is funded for the account class with the next lowest percentage of funded claims, and so forth, until all account classes within the customer class are fully funded. (e) Accounts without separation by account class. Where the debtor has, prior to the order for relief, kept initial margin for house accounts in accounts without separation by account class, then member property will be considered to be in a single account class. (f) Assertion of claims by trustee. Nothing in this section, including, but not limited to, the satisfaction of customer claims by operation of this section, shall prevent a trustee from asserting claims against any person to recover the shortfall of property enumerated in paragraphs (b)(1)(i)(E) and (b)(1)(ii) and (iii) of this section." 17:17:2.0.1.1.33.3.1.9,17,Commodity and Securities Exchanges,I,,190,PART 190—BANKRUPTCY RULES,C,Subpart C—Clearing Organization as Debtor,,§ 190.19 Support of daily settlement.,CFTC,,,,"(a) Notwithstanding any other provision of this part, funds received (whether from clearing members' house or customer accounts) by a debtor clearing organization as part of the daily settlement required pursuant to § 39.14 of this chapter shall, upon and after an order for relief, be included as customer property that is reserved for and traceable to, and promptly shall be distributed to, members entitled to payments of such funds with respect to such members' house and customer accounts as part of that same daily settlement. Such funds when received, other than deposits of initial margin described in § 39.14(a)(1)(iii) of this chapter, shall be considered member property and, separately, customer property other than member property, in proportion to the ratio of total gains in member accounts with net gains, and total gains in clearing members' customer accounts with net gains, respectively. Deposits of initial margin described in § 39.14(a)(1)(iii) of this chapter shall be considered member property and, separately, customer property other than member property, to the extent deposited on behalf of, respectively, clearing members' house accounts and customer accounts. (b) To the extent there is a shortfall in funds received pursuant to paragraph (a) of this section: (1) Such funds shall be supplemented with the property described in paragraphs (b)(1)(i) through (iv) of this section, as applicable, to the extent necessary to meet the shortfall, in accordance with the derivatives clearing organization's default rules and procedures adopted pursuant to § 39.16 and, as applicable, § 39.35 of this chapter, and (with respect to paragraph (b)(1)(ii) of this section) any recovery and wind-down plans maintained pursuant to § 39.39 of this chapter and submitted pursuant to § 39.19 of this chapter. Such funds shall be included as member property and customer property other than member property in the proportion described in paragraph (a) of this section, and shall be distributed promptly to members' house accounts and members' customer accounts which accounts are entitled to payment of such funds as part of that daily settlement. (i) Initial margin held for the account of a member, including initial margin segregated for the customers of such member, that has defaulted on payments required pursuant to a daily settlement, but only to the extent that such margin is permitted to be used pursuant to parts 1, 22, and 30 of this chapter. (ii) Assets of the debtor, to the extent dedicated to such use as part of the debtor's default rules and procedures, and any recovery and wind-down plans, described in this paragraph (b)(1). (iii) Prefunded guarantee or default funds maintained pursuant to the debtor's default rules and procedures. (iv) Payments made by members pursuant to assessment powers maintained pursuant to the debtor's default rules and procedures. (2) If the funds that are included as customer property pursuant to paragraph (a) of this section, supplemented as described in paragraph (b)(1) of this section, are insufficient to pay in full members entitled to payment of such funds as part of daily settlement, then such funds shall be distributed pro rata to such members' house accounts and customer accounts in proportion to the ratio of total gains in member accounts with net gains, and total gains in customer accounts with net gains, respectively." 21:21:3.0.1.1.17.2.1.1,21,Food and Drugs,I,B,190,PART 190—DIETARY SUPPLEMENTS,B,Subpart B—New Dietary Ingredient Notification,,§ 190.6 Requirement for premarket notification.,FDA,,,"[62 FR 49891, Sept. 23, 1997, as amended at 66 FR 17359, Mar. 30, 2001, 81 FR 49897, July 29, 2016; 88 FR 17725, Mar. 24, 2023]","(a) At least 75 days before introducing or delivering for introduction into interstate commerce a dietary supplement that contains a new dietary ingredient that has not been present in the food supply as an article used for food in a form in which the food has not been chemically altered, the manufacturer or distributor of that supplement, or of the new dietary ingredient, shall submit to the Office of Dietary Supplement Programs (HFS-810), Center for Food Safety and Applied Nutrition, Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740, information including any citation to published articles that is the basis on which the manufacturer or distributor has concluded that a dietary supplement containing such dietary ingredient will reasonably be expected to be safe. An original and two copies of this notification shall be submitted. (b) The notification required by paragraph (a) of this section shall include: (1) The name and complete address of the manufacturer or distributor of the dietary supplement that contains a new dietary ingredient, or of the new dietary ingredient; (2) The name of the new dietary ingredient that is the subject of the premarket notification, including the Latin binomial name (including the author) of any herb or other botanical; (3) A description of the dietary supplement or dietary supplements that contain the new dietary ingredient including: (i) The level of the new dietary ingredient in the dietary supplement; and (ii) The conditions of use recommended or suggested in the labeling of the dietary supplement, or if no conditions of use are recommended or suggested in the labeling of the dietary supplement, the ordinary conditions of use of the supplement; (4) The history of use or other evidence of safety establishing that the dietary ingredient, when used under the conditions recommended or suggested in the labeling of the dietary supplement, will reasonably be expected to be safe, including any citation to published articles or other evidence that is the basis on which the distributor or manufacturer of the dietary supplement that contains the new dietary ingredient has concluded that the new dietary supplement will reasonably be expected to be safe. Any reference to published information offered in support of the notification shall be accompanied by reprints or photostatic copies of such references. If any part of the material submitted is in a foreign language, it shall be accompanied by an accurate and complete English translation; and (5) The signature of the person designated by the manufacturer or distributor of the dietary supplement that contains a new dietary ingredient. (c) FDA will acknowledge its receipt of a notification made under section 413 of the Federal Food, Drug, and Cosmetic Act (the act) and will notify the submitter of the date of receipt of such a notification. The date that the agency receives the notification submitted under paragraph (a) of this section is the filing date for the notification. For 75 days after the filing date, the manufacturer or distributor of a dietary supplement that contains a new dietary ingredient shall not introduce, or deliver for introduction, into interstate commerce the dietary supplement that contains the new dietary ingredient. (d) If the manufacturer or distributor of a dietary supplement that contains a new dietary ingredient, or of the new dietary ingredient, provides additional information in support of the new dietary ingredient notification, the agency will review all submissions pertaining to that notification, including responses made to inquiries from the agency, to determine whether they are substantive and whether they require that the 75-day period be reset. If the agency determines that the new submission is a substantive amendment, FDA will assign a new filing date. FDA will acknowledge receipt of the additional information and, when applicable, notify the manufacturer of the new filing date, which is the date of receipt by FDA of the information that constitutes the substantive amendment. (e) FDA will not disclose the existence of, or the information contained in, the new dietary ingredient notification for 90 days after the filing date of the notification. After the 90th day, all information in the notification will be placed on public display, except for any information that is trade secret or otherwise confidential commercial information. (f) Failure of the agency to respond to a notification does not constitute a finding by the agency that the new dietary ingredient or the dietary supplement that contains the new dietary ingredient is safe or is not adulterated under section 402 of the act." 40:40:27.0.1.1.1.1.1.1,40,Protection of Environment,I,F,190,PART 190—ENVIRONMENTAL RADIATION PROTECTION STANDARDS FOR NUCLEAR POWER OPERATIONS,A,Subpart A—General Provisions,,§ 190.01 Applicability.,EPA,,,,The provisions of this part apply to radiation doses received by members of the public in the general environment and to radioactive materials introduced into the general environment as the result of operations which are part of a nuclear fuel cycle. 40:40:27.0.1.1.1.1.1.2,40,Protection of Environment,I,F,190,PART 190—ENVIRONMENTAL RADIATION PROTECTION STANDARDS FOR NUCLEAR POWER OPERATIONS,A,Subpart A—General Provisions,,§ 190.02 Definitions.,EPA,,,,"(a) Nuclear fuel cycle means the operations defined to be associated with the production of electrical power for public use by any fuel cycle through utilization of nuclear energy. (b) Uranium fuel cycle means the operations of milling of uranium ore, chemical conversion of uranium, isotopic enrichment of uranium, fabrication of uranium fuel, generation of electricity by a light-water-cooled nuclear power plant using uranium fuel, and reprocessing of spent uranium fuel, to the extent that these directly support the production of electrical power for public use utilizing nuclear energy, but excludes mining operations, operations at waste disposal sites, transportation of any radioactive material in support of these operations, and the reuse of recovered non-uranium special nuclear and by-product materials from the cycle. (c) General environment means the total terrestrial, atmospheric and aquatic environments outside sites upon which any operation which is part of a nuclear fuel cycle is conducted. (d) Site means the area contained within the boundary of a location under the control of persons possessing or using radioactive material on which is conducted one or more operations covered by this part. (e) Radiation means any or all of the following: Alpha, beta, gamma, or X-rays; neutrons; and high-energy electrons, protons, or other atomic particles; but not sound or radio waves, nor visible, infrared, or ultraviolet light. (f) Radioactive material means any material which spontaneously emits radiation. (g) Curie (Ci) means that quantity of radioactive material producing 37 billion nuclear transformations per second. (One millicurie (mCi) = 0.001 Ci.) (h) Dose equivalent means the product of absorbed dose and appropriate factors to account for differences in biological effectiveness due to the quality of radiation and its spatial distribution in the body. The unit of dose equivalent is the “rem.” (One millirem (mrem)= 0.001 rem.) (i) Organ means any human organ exclusive of the dermis, the epidermis, or the cornea. (j) Gigawatt-year refers to the quantity of electrical energy produced at the busbar of a generating station. A gigawatt is equal to one billion watts. A gigawatt-year is equivalent to the amount of energy output represented by an average electric power level of one gigawatt sustained for one year. (k) Member of the public means any individual that can receive a radiation dose in the general environment, whether he may or may not also be exposed to radiation in an occupation associated with a nuclear fuel cycle. However, an individual is not considered a member of the public during any period in which he is engaged in carrying out any operation which is part of a nuclear fuel cycle. (l) Regulatory agency means the government agency responsible for issuing regulations governing the use of sources of radiation or radioactive materials or emissions therefrom and carrying out inspection and enforcement activities to assure compliance with such regulations." 40:40:27.0.1.1.1.2.1.1,40,Protection of Environment,I,F,190,PART 190—ENVIRONMENTAL RADIATION PROTECTION STANDARDS FOR NUCLEAR POWER OPERATIONS,B,Subpart B—Environmental Standards for the Uranium Fuel Cycle,,§ 190.10 Standards for normal operations.,EPA,,,,"Operations covered by this subpart shall be conducted in such a manner as to provide reasonable assurance that: (a) The annual dose equivalent does not exceed 25 millirems to the whole body, 75 millirems to the thyroid, and 25 millirems to any other organ of any member of the public as the result of exposures to planned discharges of radioactive materials, radon and its daughters excepted, to the general environment from uranium fuel cycle operations and to radiation from these operations. (b) The total quantity of radioactive materials entering the general environment from the entire uranium fuel cycle, per gigawatt-year of electrical energy produced by the fuel cycle, contains less than 50,000 curies of krypton-85, 5 millicuries of iodine-129, and 0.5 millicuries combined of plutonium-239 and other alpha-emitting transuranic radionuclides with half-lives greater than one year." 40:40:27.0.1.1.1.2.1.2,40,Protection of Environment,I,F,190,PART 190—ENVIRONMENTAL RADIATION PROTECTION STANDARDS FOR NUCLEAR POWER OPERATIONS,B,Subpart B—Environmental Standards for the Uranium Fuel Cycle,,§ 190.11 Variances for unusual operations.,EPA,,,,"The standards specified in § 190.10 may be exceeded if: (a) The regulatory agency has granted a variance based upon its determination that a temporary and unusual operating condition exists and continued operation is in the public interest, and (b) Information is promptly made a matter of public record delineating the nature of unusual operating conditions, the degree to which this operation is expected to result in levels in excess of the standards, the basis of the variance, and the schedule for achieving conformance with the standards." 40:40:27.0.1.1.1.2.1.3,40,Protection of Environment,I,F,190,PART 190—ENVIRONMENTAL RADIATION PROTECTION STANDARDS FOR NUCLEAR POWER OPERATIONS,B,Subpart B—Environmental Standards for the Uranium Fuel Cycle,,§ 190.12 Effective date.,EPA,,,,"(a) The standards in § 190.10(a) shall be effective December 1, 1979, except that for doses arising from operations associated with the milling of uranium ore the effective date shall be December 1, 1980. (b) The standards in § 190.10(b) shall be effective December 1, 1979, except that the standards for krypton-85 and iodine-129 shall be effective January 1, 1983, for any such radioactive materials generated by the fission process after these dates." 46:46:7.0.1.4.24.1.63.1,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.00,Subpart 190.00—General Provisions,,§ 190.00-1 Preemptive effect.,USCG,,,,The regulations in this part have preemptive effect over State or local regulations in the same field. 46:46:7.0.1.4.24.10.63.1,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.25,Subpart 190.25—Rails and Guards,,§ 190.25-1 Application.,USCG,,,"[CGFR 69-72, 34 FR 17503, Oct. 29, 1969]","(a) The provisions of this subpart with the exception of § 190.25-90, apply to all vessels contracted for on or after July 1, 1969. (b) Vessels contracted for prior to July 1, 1969 shall meet the requirements of § 190.25-90." 46:46:7.0.1.4.24.10.63.2,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.25,Subpart 190.25—Rails and Guards,,§ 190.25-5 Where rails required.,USCG,,,"[CGFR 69-72, 34 FR 17503, Oct. 29, 1969]","(a) All vessels shall have efficient guard rails or bulwarks on decks and bridges. The height of rails or bulwarks shall be at least 39 1/2 inches from the deck. At exposed peripheries of the freeboard and superstructure decks, the rails shall be in at least three courses, including the top. The opening below the lowest course shall not be more than 9 inches. The courses shall not be more than 15 inches apart. In the case of ships with rounded gunwales the guard rail supports shall be placed in the flat of the deck. On other decks and bridges the rails shall be in at least two courses, including the top, approximately evenly spaced. If it can be shown to the satisfaction of the Officer in Charge, Marine Inspection, that the installation of rails of such height will be unreasonable and impracticable, having regard to the business of the vessel, rails of a lesser height or in some cases grab rails may be accepted and inboard rails may be eliminated if the deck is not generally accessible. (b) Where it can be shown to the satisfaction of the Commandant that a vessel is engaged exclusively in voyages of a sheltered nature, the provisions of paragraph (a) of this section may be relaxed." 46:46:7.0.1.4.24.10.63.3,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.25,Subpart 190.25—Rails and Guards,,§ 190.25-10 Storm rails.,USCG,,,,"(a) On vessels in ocean and coastwise service, suitable storm rails shall be installed in all passageways and at the deckhouse sides where persons on board might have normal access. Storm rails shall be installed on both sides of passageways which are 6 feet or more in width." 46:46:7.0.1.4.24.10.63.4,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.25,Subpart 190.25—Rails and Guards,,§ 190.25-15 Guards in dangerous places.,USCG,,,,"(a) Suitable hand covers, guards, or rails shall be installed in way of all exposed and dangerous places such as gears, machinery, etc." 46:46:7.0.1.4.24.10.63.5,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.25,Subpart 190.25—Rails and Guards,,"§ 190.25-90 Vessels contracted for prior to July 1, 1969.",USCG,,,"[CGFR 67-83, 33 FR 1125, Jan. 27, 1968, as amended by CGFR 69-72, 34 FR 17503, Oct. 29, 1969]","(a) Existing structures, arrangements, materials, and facilities previously approved will be considered satisfactory so long as they are maintained in good condition to the satisfaction of the Officer in Charge, Marine Inspection. Minor repairs and alterations may be made to the same standards as the original construction: Provided, That in no case will a greater departure from the standards of §§ 190.25-5 through 190.25-15 be permitted than presently exists." 46:46:7.0.1.4.24.2.63.1,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.01,Subpart 190.01—Hull Structure,,§ 190.01-1 Application.,USCG,,,,"(a) The provisions of this subpart, with the exception of § 190.01-90, shall apply to all vessels contracted for on or after March 1, 1968. (b) Vessels contracted for prior to March 1, 1968, shall meet the requirements of § 190.01-90." 46:46:7.0.1.4.24.2.63.2,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.01,Subpart 190.01—Hull Structure,,§ 190.01-5 Vessels subject to load line.,USCG,,,,"(a) For vessels assigned a load line, see Subchapter E (Load Lines) of this chapter for special requirements as to strength, closure of openings, etc." 46:46:7.0.1.4.24.2.63.3,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.01,Subpart 190.01—Hull Structure,,§ 190.01-10 Structural standards.,USCG,,,,"(a) In general, compliance with the standards established by the American Bureau of Shipping, see subpart 188.35 of this subchapter, will be considered as satisfactory evidence of the structural efficiency of the vessel. However, in special cases, a detailed analysis of the entire structure or some integral part may be made by the Coast Guard to determine the structural requirements." 46:46:7.0.1.4.24.2.63.4,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.01,Subpart 190.01—Hull Structure,,§ 190.01-15 Special consideration.,USCG,,,,(a) Special consideration will be given to the structural requirements for small vessels or vessels of an unusual design not contemplated by the rules of the American Bureau of Shipping. 46:46:7.0.1.4.24.2.63.5,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.01,Subpart 190.01—Hull Structure,,"§ 190.01-90 Vessels contracted for prior to March 1, 1968.",USCG,,,,"(a) Existing structure previously approved will be considered satisfactory so long as it is maintained in good condition to the satisfaction of the Officer in Charge, Marine Inspection. Minor repairs and alterations may be made to the same standards as the original construction. (b) Conversions, major alterations, new installations, and replacements, shall meet the applicable specifications in this subpart for new vessels." 46:46:7.0.1.4.24.3.63.1,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.02,Subpart 190.02—Navigation Bridge Visibility,,§ 190.02-1 Navigation bridge visibility.,USCG,,,"[CGD 85-099, 55 FR 32249, Aug. 8, 1990]","Each oceanographic research vessel which is 100 meters (328 feet) or more in length and contracted for on or after September 7, 1990, must meet the following requirements: (a) The field of vision from the navigation bridge, whether the vessel is in a laden or unladen condition, must be such that: (1) From the conning position, the view of the sea surface is not obscured forward of the bow by more than the lesser of two ship lengths or 500 meters (1640 feet) from dead ahead to 10 degrees on either side of the vessel. Within this arc of visibility any blind sector caused by cargo, cargo gear, or other permanent obstruction must not exceed 5 degrees. (2) From the conning position, the horizontal field of vision extends over an arc from at least 22.5 degrees abaft the beam on one side of the vessel, through dead ahead, to at least 22.5 degrees abaft the beam on the other side of the vessel. Blind sectors forward of the beam caused by cargo, cargo gear, or other permanent obstruction must not exceed 10 degrees each, nor total more than 20 degrees, including any blind sector within the arc of visibility described in paragraph (a)(1) of this section. (3) From each bridge wing, the field of vision extends over an arc from at least 45 degrees on the opposite bow, through dead ahead, to at least dead astern. (4) From the main steering position, the field of vision extends over an arc from dead ahead to at least 60 degrees on either side of the vessel. (5) From each bridge wing, the respective side of the vessel is visible forward and aft. (b) Windows fitted on the navigation bridge must be arranged so that: (1) Framing between windows is kept to a minimum and is not installed immediately in front of any work station. (2) Front windows are inclined from the vertical plane, top out, at an angle of not less than 10 degrees and not more than 25 degrees. (3) The height of the lower edge of the front windows is limited to prevent any obstruction of the forward view previously described in this section. (4) The height of the upper edge of the front windows allows a forward view of the horizon at the conning position, for a person with a height of eye of 1.8 meters (71 inches), when the vessel is at a forward pitch angle of 20 degrees. (c) Polarized or tinted windows must not be fitted." 46:46:7.0.1.4.24.4.63.1,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.03,Subpart 190.03—Subdivision and Stability,,§ 190.03-1 General.,USCG,,,"[CGD 79-023, 48 FR 51053, Nov. 4, 1983]",Each vessel must comply with the applicable requirements in Subchapter S of this chapter. 46:46:7.0.1.4.24.5.63.1,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.05,Subpart 190.05—General Fire Protection,,§ 190.05-1 Application.,USCG,,,,"(a) The provisions of this subpart shall apply to all vessels, except as noted otherwise in this subpart. (b) Non-self-propelled vessels of less than 300 gross tons shall not be subject to the provisions of this subpart." 46:46:7.0.1.4.24.5.63.2,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.05,Subpart 190.05—General Fire Protection,,§ 190.05-3 Fire hazards to be minimized.,USCG,,,,(a) The general construction of the vessel shall be such as to minimize fire hazards. 46:46:7.0.1.4.24.5.63.3,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.05,Subpart 190.05—General Fire Protection,,§ 190.05-5 Woodwork insulated from heated surfaces.,USCG,,,,"(a) Internal combustion engine exhausts, boiler, and galley uptakes, and similar sources of ignition shall be kept clear of and suitably insulated from any woodwork or other combustible matter." 46:46:7.0.1.4.24.5.63.4,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.05,Subpart 190.05—General Fire Protection,,§ 190.05-10 Chemical storeroom and lamp room construction.,USCG,,,,"(a) Chemical storerooms, lamp, paint, and oil lockers and similar compartments shall be constructed of steel or shall be wholly lined with metal." 46:46:7.0.1.4.24.5.63.5,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.05,Subpart 190.05—General Fire Protection,,§ 190.05-15 Segregation of spaces containing the emergency source of electric power.,USCG,,,,"(a) When a compartment containing the emergency source of electric power, or vital components thereof, adjoins a space containing either the ship's service generators or machinery necessary for the operation of the ship's service generators, all common bulkheads and/or decks shall be protected by approved “structural insulation” or other approved material. This protection shall be such as to be capable of preventing an excessive temperature rise in the space containing the emergency source of electric power, or vital components thereof, for a period of at least 1 hour in the event of fire in the adjoining space. Bulkheads or decks meeting Class A-60 requirements, as defined by § 72.05-10 of Subchapter H (Passenger Vessels) of this chapter, will be considered as meeting the requirements of this paragraph." 46:46:7.0.1.4.24.5.63.6,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.05,Subpart 190.05—General Fire Protection,,§ 190.05-20 Segregation of chemical laboratories and chemical storerooms.,USCG,,,"[CGFR 67-83, 33 FR 1125, Jan. 27, 1968, as amended by USCG-2014-0688, 79 FR 58289, Sept. 29, 2014]","(a) The provisions of this section shall apply to all vessels contracted for on or after March 1, 1968. (b) Chemical storerooms shall not be located in horizontal proximity to nor below accommodation or safety areas. (c) Chemical storerooms shall not be located adjacent to the collision bulkhead, nor boundary divisions of the boilerroom, engineroom, galley, or other high fire hazard area. (d) Chemical laboratories shall not be located adjacent to nor immediately below safety areas. Wherever possible they shall be similarly separated from accommodation spaces and high fire hazard areas such as the galley." 46:46:7.0.1.4.24.6.63.1,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.07,Subpart 190.07—Structural Fire Protection,,§ 190.07-1 Application.,USCG,,,"[CGFR 67-83, 33 FR 1125, Jan. 27, 1968, as amended by USCG-2012-0196, 81 FR 48301, July 22, 2016]","(a) The provisions of this subpart, with the exception of § 190.07-90, apply to all vessels of 4,000 gross tons or more carrying not more than 150 persons and contracted for on or after March 1, 1968. (b) The provisions of this subpart, with the exception of § 190.07-90, apply to all vessels of 300 gross tons or more, but less than 4,000 gross tons, carrying in excess of 16 persons in the scientific party but not more than 150 persons and contracted for on or after March 1, 1968. (c) Vessels contracted for prior to March 1, 1968, must meet the requirements of § 190.07-90. (d) Those vessels which carry more than 150 persons must meet the requirements in §§ 72.05-5 through 72.05-60 of Subchapter H (Passenger Vessels) of this chapter. (e) Structural fire protection requirements in § 92.07-1(c) of this chapter may be considered equivalent to the provisions of this subpart." 46:46:7.0.1.4.24.6.63.2,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.07,Subpart 190.07—Structural Fire Protection,,§ 190.07-5 Definitions.,USCG,,,"[CGFR 67-83, 33 FR 1125, Jan. 27, 1968, as amended by CGD 74-155, 41 FR 17910, Apr. 29, 1976]","(a) Standard fire tests. A standard fire test is one which develops in the test furnace a series of time temperature relationships as follows: 5 minutes—1,000 °F. 10 minutes—1,300 °F. 30 minutes—1,550 °F. 60 minutes—1,700 °F. 5 minutes—1,000 °F. 10 minutes—1,300 °F. 30 minutes—1,550 °F. 60 minutes—1,700 °F. (b) A Class divisions. Bulkheads or decks of the A Class shall be composed of steel or equivalent metal construction, suitably stiffened and made intact with the main structure of the vessel; such as shell, structural bulkheads, and decks. They shall be so constructed, that if subjected to the standard fire test, they would be capable of preventing the passage of flame and smoke for 1 hour. (c) B Class bulkheads. Bulkheads of the B Class shall be constructed with approved incombustible materials and made intact from deck to deck and to shell or other boundaries. They shall be so constructed that, if subjected to the standard fire test, they would be capable of preventing the passage of flame for one-half hour. (d) C Class divisions. Bulkheads or decks of the C Class shall be constructed of approved incombustible materials, but need meet no requirements relative to the passage of flame. (e) Steel or other equivalent metal. Where the term steel or other equivalent metal is used in this subpart, it is intended to require a material which, by itself or due to insulation provided, has structural and integrity qualities equivalent to steel at the end of the applicable fire exposure. (f) Approved material. Where in this subpart approved materials are required, they refer to materials approved under the applicable subparts of part 164 of Subchapter Q (Specifications) of this chapter, as follows:" 46:46:7.0.1.4.24.6.63.3,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.07,Subpart 190.07—Structural Fire Protection,,§ 190.07-10 Construction.,USCG,,,"[CGFR 67-83, 33 FR 1125, Jan. 27, 1968, as amended by CGD 84-073, 52 FR 18364, May 15, 1987; 52 FR 22751, June 15, 1987; USCG-2014-0688, 79 FR 58289, Sept. 29, 2014]","(a) The hull, superstructure, structural bulkheads, decks, and deckhouses shall be constructed of steel. Alternately, the Commandant may permit the use of other suitable material in special cases, having in mind the risk of fire. (b) The boundary bulkheads of general laboratory areas, chemical storerooms, galleys, paint and lamp lockers and emergency generator rooms shall be of “A” class construction. (1) Permanently installed divisional bulkheads between laboratories spaces within a general laboratory area may be of B or C class construction. (2) Temporary divisional bulkheads between laboratory spaces within a general laboratory area may be constructed of combustible materials when they are necessary to facilitate a specific scientific mission. (c) The boundary bulkheads and decks separating the accommodations and control stations from hold and machinery spaces, galleys, main pantries, laboratories, and storerooms, other than small service lockers, shall be of “A” Class construction. (1) The boundary bulkheads and decks separating general laboratory areas of 500 square feet or less from accommodations and control stations shall be of “A-15” Class construction as defined by § 72.05-10 of Subchapter H (Passenger Vessels) of this chapter. (2) The boundary bulkheads and decks separating general laboratory areas of over 500 square feet from accommodations and control stations shall be of “A-30” Class construction as defined by § 72.05-10 of Subchapter H (Passenger Vessels) of this chapter. (d) Within the accommodation and service areas the following conditions shall apply: (1) Corridor bulkheads in accommodation spaces shall be of the “A” or “B” Class intact from deck to deck. Stateroom doors in such bulkheads may have a louver in the lower half. (2) Elevator, dumbwaiter, stairtower, and other trunks shall be of “A” Class construction. (3) Bulkheads not already specified to be of “A” or “B” Class construction may be of “A”, “B”, or “C” Class construction. (4) The integrity of any deck in way of a stairway, shall be maintained by means of “A” or “B” class bulkheads and doors at one level. The integrity of a stairtower shall be maintained by “A” class doors at every level. The door shall be of the self-closing type. Holdback hooks will not be permitted. However, magnetic holdbacks operated from the bridge or other suitable remote control positions are acceptable. (5) Interior stairs, including stringers and treads, shall be of steel. (6) Except for washrooms and toilet spaces, deck coverings within accommodation spaces shall be of an approved type. However, overlays for leveling or finishing purposes which do not meet the requirements for an approved deck covering may be used in thicknesses not exceeding three-eighths of an inch. (7) Ceilings, linings, and insulation, including pipe and duct laggings, shall be approved incombustible materials. (8) Any sheathing, furring, or holding pieces incidental to the securing of any bulkhead, ceiling, lining, or insulation shall be of approved incombustible materials. (9) Bulkheads, linings, and ceiling may have a combustible veneer within a room not to exceed two twenty-eighths of an inch in thickness. However, combustible veneers, trim, decorations, etc., shall not be used in corridors or hidden spaces. This is not intended to preclude the use of an approved interior finish or a reasonable number of coats of paint. (e) Nitrocellulose or other highly flammable or noxious fume-producing paints or lacquers shall not be used. (f) The provisions of paragraphs (d) (1) through (9) of this section apply to control spaces on vessels whose initial Application for Inspection is submitted to an Officer in Charge, Marine Inspection on or after June 15, 1987." 46:46:7.0.1.4.24.6.63.4,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.07,Subpart 190.07—Structural Fire Protection,,"§ 190.07-90 Vessels contracted for prior to March 1, 1968.",USCG,,,,"(a) Existing structure arrangements and materials previously approved will be considered satisfactory so long as they are maintained in good condition to the satisfaction of the Officer in Charge, Marine Inspection. Minor repairs and alterations may be made to the same standards as the original construction. (b) Conversions, major alterations, new installations, and replacements shall comply with the applicable specifications and requirements in this subpart for new vessels." 46:46:7.0.1.4.24.7.63.1,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.10,Subpart 190.10—Means of Escape,,§ 190.10-1 Application.,USCG,,,,"(a) The provisions of this subpart, with the exception of § 190.10-90, shall apply to all vessels other than non-self-propelled vessels of less than 300 gross tons, contracted for on or after March 1, 1968. (b) Vessels contracted for prior to March 1, 1968, shall meet the requirements of § 190.10-90. (c) Non-self-propelled vessels of less than 300 gross tons shall not be subject to the provisions of this subpart." 46:46:7.0.1.4.24.7.63.10,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.10,Subpart 190.10—Means of Escape,,§ 190.10-45 Weather deck communications.,USCG,,,,(a) Vertical communication shall be provided between the various weather decks by means of permanent inclined ladders. 46:46:7.0.1.4.24.7.63.11,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.10,Subpart 190.10—Means of Escape,,"§ 190.10-90 Vessels contracted for prior to March 1, 1968.",USCG,,,,"(a) Existing arrangements previously approved will be considered satisfactory so long as they are maintained in good condition to the satisfaction of the Officer in Charge, Marine Inspection. Minor repairs and alterations may be made to the same standards as the original design: Provided, That in no case will a greater departure from the standards of §§ 190.10-5 through 190.10-45 be permitted than presently exists. Nothing in this paragraph shall be construed as exempting any vessel from having two means of escape from all main compartments where persons on board may be quartered or normally employed." 46:46:7.0.1.4.24.7.63.2,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.10,Subpart 190.10—Means of Escape,,§ 190.10-5 Two means required.,USCG,,,,"(a) There shall be at least two means of escape from all general areas where the crew or scientific personnel may be quartered or normally employed. At least one of these two means of escape shall be independent of watertight doors and hatches, except for quick acting watertight doors giving final access to weather decks." 46:46:7.0.1.4.24.7.63.3,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.10,Subpart 190.10—Means of Escape,,§ 190.10-10 Location.,USCG,,,,(a) The two means of escape shall be as remote as practicable so as to minimize the possibility of one incident blocking both escapes. 46:46:7.0.1.4.24.7.63.4,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.10,Subpart 190.10—Means of Escape,,§ 190.10-15 Vertical ladders not accepted.,USCG,,,,"(a) Vertical ladders and deck scuttles shall not in general be considered satisfactory as one of the required means of escape. However, where it is demonstrated that the installation of a stairway would be impracticable, a vertical ladder may be used as the second means of escape." 46:46:7.0.1.4.24.7.63.5,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.10,Subpart 190.10—Means of Escape,,§ 190.10-20 No means for locking doors.,USCG,,,,"(a) No means shall be provided for locking door giving access to either of the two required means of escape except that crash doors or locking devices, capable of being easily forced in an emergency, may be employed provided a permanent and conspicuous notice to this effect is attached to both sides of the door. This paragraph shall not apply to outside doors to deckhouses where such doors are locked by key only and such key is under the control of one of the vessel's officers." 46:46:7.0.1.4.24.7.63.6,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.10,Subpart 190.10—Means of Escape,,§ 190.10-25 Stairway size.,USCG,,,,"(a) Stairways shall be of sufficient width having in mind the number of persons having access to such stairs for escape purposes. (b) All interior stairways, other than those within the machinery spaces, shall have minimum width of 28 inches. The angle of inclination with the horizontal of such stairways shall not exceed 50°. (c) Special consideration for relief may be given if it is shown to be unreasonable or impracticable to meet the requirements in this section." 46:46:7.0.1.4.24.7.63.7,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.10,Subpart 190.10—Means of Escape,,§ 190.10-30 Dead end corridors.,USCG,,,,"(a) Dead end corridors, or the equivalent, more than 40 feet in length shall not be permitted." 46:46:7.0.1.4.24.7.63.8,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.10,Subpart 190.10—Means of Escape,,§ 190.10-35 Public spaces.,USCG,,,,"(a) In all cases, public spaces having a deck area of over 300 square feet shall have at least two exits. Where practicable, these exits shall give egress to different corridors, rooms, or spaces to minimize the possibility of one incident blocking both exits." 46:46:7.0.1.4.24.7.63.9,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.10,Subpart 190.10—Means of Escape,,§ 190.10-40 Access to lifeboats.,USCG,,,,"(a) The stairways, corridors, and doors shall be so arranged as to permit a ready and direct access to the various lifeboat and liferaft embarkation areas." 46:46:7.0.1.4.24.8.63.1,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.15,Subpart 190.15—Ventilation,,§ 190.15-1 Application.,USCG,,,,"(a) The provisions of this subpart, with the exception of § 190.15-90, shall apply to all vessels other than non-self-propelled vessels of less than 300 gross tons, contracted for on or after March 1, 1968. (b) Vessels contracted for prior to March 1, 1968, shall meet the requirements of § 190.15-90. (c) Non-self-propelled vessels of less than 300 gross tons shall not be subject to the provisions of this subpart." 46:46:7.0.1.4.24.8.63.2,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.15,Subpart 190.15—Ventilation,,§ 190.15-5 Vessels using fuel having a flashpoint of 110 °F. or lower.,USCG,,,"[CGFR 67-83, 33 FR 1125, Jan. 27, 1968, as amended by USCG-2006-24797, 77 FR 33893, June 7, 2012]","(a) Spaces containing machinery which uses, or tanks which contain, fuel having a flashpoint of 110 °F. or lower shall have natural supply and mechanical exhaust ventilation as required by this section. (b) The mechanical exhaust system shall be such as to assure the air changes as noted in Table 190.15-5(b) depending on the size of the space. Table 190.15-5( b ) (c) Exhaust blower motors, unless of a totally enclosed, explosion-proof type, shall be located outside of the ducts and outside of the compartment required to be ventilated. Exhaust blower motors if mounted in any compartment shall be located as high above the bilge as practicable. Blower blades shall be nonsparking with reference to their housings. (d) Exhaust blower switches shall be located outside of any space required to be ventilated by this section, and shall be of the type interlocked with the ignition switch so that the blowers are started before the engine ignition is switched on. A red warning sign at the switch shall state that the blowers shall be operated prior to starting the engines for a sufficient time to insure at least one complete change of air in the compartments. (e) The area of the ducts shall be such as to limit the air velocity to a maximum of 2,000 feet per minute. Ducts may be of any shape: Provided, That in no case shall one cross section dimension exceed twice the other. (f) At least two inlet ducts shall be located at one end of the compartment and they shall extend to the lowest part of the compartment or bilge on each side. Similar exhaust ducts shall be led to the mechanical exhaust system from the lowest part of the compartment or bilge on each side of the compartment at the end opposite from that at which the inlet ducts are fitted. These ducts shall be so installed that ordinary collection of water in the bilge will not close off the ducts. (g) All ducts shall be of steel construction and reasonably gastight from end to end. The ducts shall lead as direct as possible and be properly fastened and supported. (h) All supply ducts shall be provided with cowls or scoops having a free area not less than twice the required duct area. When the cowls or scoops are screened, the mouth area shall be increased to compensate for the area of the screen wire. Dampers shall not be fitted in the supply ducts. Cowls or scoops shall be kept open at all times except when the stress of weather is such as to endanger the vessel if the openings are not temporarily closed. Supply and exhaust openings shall not be located where the natural flow of air is unduly obstructed, or adjacent to possible sources of vapor ignition, nor shall they be so located that exhaust air may be taken into the supply vents. (i) Provisions must be made for closing all cowls or scoops when the fixed carbon dioxide or clean agent system is operated." 46:46:7.0.1.4.24.8.63.3,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.15,Subpart 190.15—Ventilation,,§ 190.15-10 Ventilation for closed spaces.,USCG,,,,"(a) All enclosed spaces within the vessel shall be properly vented or ventilated. Means shall be provided to close off all vents and ventilators. (b) Means shall be provided for stopping all fans in ventilation systems serving the chemical laboratories, scientific laboratories, chemical storerooms, and machinery spaces and for closing all doorways, ventilators, and annular spaces around funnels and other openings to such spaces, from outside these spaces, in case of fire. (c) See §§ 194.15-5 and 194.20-5 of this subchapter for ventilation of chemical laboratories, scientific laboratories, and storerooms." 46:46:7.0.1.4.24.8.63.4,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.15,Subpart 190.15—Ventilation,,§ 190.15-15 Ventilation for living spaces and quarters.,USCG,,,,"(a) All living spaces shall be adequately ventilated in a manner suitable to the purpose of the space. (b) All spaces used as quarters for crewmembers and scientific personnel shall be ventilated by a mechanical system unless it can be shown that a natural system will provide adequate ventilation. By a natural system is meant those spaces so located that the windows, ports, skylights, etc., and doors to passageways can be kept open and thereby provide adequate ventilation under all ordinary conditions of weather." 46:46:7.0.1.4.24.8.63.5,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.15,Subpart 190.15—Ventilation,,"§ 190.15-90 Vessels contracted for prior to March 1, 1968.",USCG,,,,"(a) Existing arrangements previously approved will be considered satisfactory so long as they are maintained in good condition to the satisfaction of the Officer in Charge, Marine Inspection. Minor repairs and alterations may be made to the same standards as the original design: Provided, That in no case will a greater departure from the standards of §§ 190.15-5 through 190.15-15 be permitted than presently exists." 46:46:7.0.1.4.24.9.63.1,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.20,"Subpart 190.20—Accomodations for Officers, Crew, and Scientific Personnel",,§ 190.20-1 Application.,USCG,,,,"(a) Except as noted below, the provisions of this subpart apply to all vessels contracted for on or after March 1, 1968. (b) Vessels contracted for prior to March 1, 1968, must meet the requirements of § 190.20-90." 46:46:7.0.1.4.24.9.63.10,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.20,"Subpart 190.20—Accomodations for Officers, Crew, and Scientific Personnel",,§ 190.20-45 Lighting.,USCG,,,,Each berth must have a light. 46:46:7.0.1.4.24.9.63.11,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.20,"Subpart 190.20—Accomodations for Officers, Crew, and Scientific Personnel",,§ 190.20-50 Heating and cooling.,USCG,,,,"(a) All manned spaces must be adequately heated and cooled in a manner suitable to the purpose of the space. (b) Radiators and other heating apparatus must be so placed and shielded, where necessary, to avoid risk of fire, danger or discomfort to the occupants. Pipes leading to radiators or heating apparatus must be insulated where those pipes create a hazard to persons occupying the space." 46:46:7.0.1.4.24.9.63.12,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.20,"Subpart 190.20—Accomodations for Officers, Crew, and Scientific Personnel",,§ 190.20-55 Insect screens.,USCG,,,,Provisions must be made to protect the crew quarters against the admission of insects. 46:46:7.0.1.4.24.9.63.13,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.20,"Subpart 190.20—Accomodations for Officers, Crew, and Scientific Personnel",,"§ 190.20-90 Vessels contracted for prior to March 1, 1968.",USCG,,,,"Existing structures, arrangements, materials, and facilities previously approved will be considered satisfactory so long as they are maintained in good condition to the satisfaction of the Officer in Charge, Marine Inspection. Minor repairs and alterations may be made to the same standards as the original construction, provided that in no case will a greater departure from the standards of §§ 190.20-5 through 190.20-55 be permitted than presently exists." 46:46:7.0.1.4.24.9.63.2,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.20,"Subpart 190.20—Accomodations for Officers, Crew, and Scientific Personnel",,§ 190.20-5 Intent.,USCG,,,,"(a) The accommodations provided for officers, crew, and scientific personnel on all vessels must be securely constructed, properly lighted, heated, drained, ventilated, equipped, located, arranged, and, where practicable, shall be insulated from undue noise, heat, and odors. (b) Provided the intent of this subpart is met, consideration may be given by the Officer in Charge, Marine Inspection to relax the requirements relating to the size and separation of accommodations for scientific personnel." 46:46:7.0.1.4.24.9.63.3,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.20,"Subpart 190.20—Accomodations for Officers, Crew, and Scientific Personnel",,§ 190.20-10 Location of crew spaces.,USCG,,,,"(a) Crew quarters must not be located farther forward in the vessel than a vertical plane located at 5 percent of the vessel's length abaft the forward side of the stem at the designated summer load water line. However, for vessels in other than ocean or coastwise service, this distance need not exceed 8.5 meters (28 feet). For purpose of this paragraph, the vessel's length shall be as defined in § 43.15-1 of subchapter E (Load Lines) of this chapter. Unless approved by the Commandant, no section of the deck head of the crew spaces may be below the deepest load line. (b) There must be no direct communication, except through solid, close fitted doors or hatches between crew spaces and chain lockers, or machinery spaces." 46:46:7.0.1.4.24.9.63.4,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.20,"Subpart 190.20—Accomodations for Officers, Crew, and Scientific Personnel",,§ 190.20-15 Construction.,USCG,,,,"All crew spaces are to be constructed and arranged in a manner suitable to the purpose for which they are intended and so they can be kept in a clean, workable and sanitary condition." 46:46:7.0.1.4.24.9.63.5,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.20,"Subpart 190.20—Accomodations for Officers, Crew, and Scientific Personnel",,§ 190.20-20 Sleeping accommodations.,USCG,,,,"(a) Where practicable, each licensed officer must be provided with a separate stateroom. (b) Sleeping accommodations for the crew must be divided into rooms, no one of which must berth more than 4 persons. (c) Each room must be of such size that there are at least 2.78 square meters (30 square feet) of deck area and a volume of at least 5.8 cubic meters (210 cubic feet) for each person accommodated. The clear head room must be not less than 190 centimeters (75 inches). In measuring sleeping accommodations any furnishings contained therein for the use of the occupants are not to be deducted from the total volume or from the deck area. (d) Each person shall have a separate berth and not more than one berth may be placed above another. The berth must be composed of materials not likely to corrode. The overall size of a berth must not be less than 68 centimeters (27 inches) wide by 190 centimeters (75 inches) long, except by special permission of the Commandant. Where two tiers of berths are fitted, the bottom of the lower berth must not be less than 30 centimeters (12 inches) above the deck. The berths must not be obstructed by pipes, ventilating ducts, or other installations. (e) A locker must be provided for each person accommodated in a room." 46:46:7.0.1.4.24.9.63.6,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.20,"Subpart 190.20—Accomodations for Officers, Crew, and Scientific Personnel",,§ 190.20-25 Washrooms and toilet rooms.,USCG,,,,"(a) There must be provided at least 1 toilet, 1 washbasin, and 1 shower or bathtub for each 8 members or portion thereof in the crew to be accommodated who do not occupy rooms to which private or semi-private facilities are attached. (b) The toilet rooms and washrooms must be located convenient to the sleeping quarters of the crew to which they are allotted but must not open directly into such quarters except when they are provided as private or semi-private facilities. (c) All washbasins, showers, and bathtubs must be equipped with adequate plumbing, including hot and cold running water. All toilets must be installed with adequate plumbing for flushing. Where more than 1 toilet is located in a space or compartment, each toilet must be separated by partitions." 46:46:7.0.1.4.24.9.63.7,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.20,"Subpart 190.20—Accomodations for Officers, Crew, and Scientific Personnel",,§ 190.20-30 Messrooms.,USCG,,,,"(a) Messrooms must be located as near to the galley as is practicable except where the messroom is equipped with a steam table. (b) Each messroom must seat the number of persons expected to eat in the messroom at one time." 46:46:7.0.1.4.24.9.63.8,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.20,"Subpart 190.20—Accomodations for Officers, Crew, and Scientific Personnel",,§ 190.20-35 Hospital space.,USCG,,,,"(a) Except as specifically modified by paragraph (f) of this section, each vessel which in the ordinary course of its trade makes voyages of more than 3 days duration between ports and which carries a crew of 12 or more, must be provided with a hospital space. This space must be situated with regard to the comfort of the sick so that they may receive proper attention in all weather. (b) The hospital must be suitably separated from other spaces and must be used for the care of the sick and for no other purpose. (c) The hospital must be fitted with berths in the ratio of 1 berth to every 12 members of the crew or portion thereof who are not berthed in single occupancy rooms, but the number of berths need not exceed 6. Where all single occupancy rooms are provided, the requirement for a separate hospital may be withdrawn, provided that 1 stateroom is fitted with a bunk accessible from both sides. (d) [Reserved] (e) The hospital must have a toilet, washbasin, and bathtub or shower conveniently situated. Other necessary suitable equipment such as a clothes locker, a table and a seat must be provided. (f) On vessels in which the crew is berthed in single occupancy rooms, a hospital space will not be required, provided that 1 room must be designated and fitted with use as a treatment or isolation room. This room must meet the following standards: (1) The room must be available for immediate medical use; and (2) A washbasin with hot and cold running water must be installed either in or immediately adjacent to the space and other required sanitary facilities must be conveniently located." 46:46:7.0.1.4.24.9.63.9,46,Shipping,I,U,190,PART 190—CONSTRUCTION AND ARRANGEMENT,190.20,"Subpart 190.20—Accomodations for Officers, Crew, and Scientific Personnel",,§ 190.20-40 Other spaces.,USCG,,,,"Each vessel shall have— (a) Sufficient facilities where the crew may wash and dry their own clothes, including at least 1 sink supplied with hot and cold fresh water; (b) Recreation spaces; and (c) A space or spaces of adequate size on the open deck to which the crew has access when off duty." 49:49:3.1.1.2.6.1.5.1,49,Transportation,I,D,190,PART 190—PIPELINE SAFETY ENFORCEMENT AND REGULATORY PROCEDURES,A,Subpart A—General,,§ 190.1 Purpose and scope.,PHMSA,,,"[45 FR 20413, Mar. 27, 1980, as amended by Amdt. 190-6, 61 FR 18512, Apr. 26, 1996; 70 FR 11137, Mar. 8, 2005; Amdt. 190-16, 78 FR 58908, Sept. 25, 2013]","(a) This part prescribes procedures used by the Pipeline and Hazardous Materials Safety Administration in carrying out duties regarding pipeline safety under 49 U.S.C. 60101 et seq. (the pipeline safety laws) and 33 U.S.C. 1321 (the water pollution control laws). (b) This subpart defines certain terms and prescribes procedures that are applicable to each proceeding described in this part." 49:49:3.1.1.2.6.1.5.2,49,Transportation,I,D,190,PART 190—PIPELINE SAFETY ENFORCEMENT AND REGULATORY PROCEDURES,A,Subpart A—General,,§ 190.3 Definitions.,PHMSA,,,"[Amdt. 190-6, 61 FR 18513, Apr. 26, 1996, as amended at 68 FR 11749, Mar. 12, 2003; 70 FR 11137, Mar. 8, 2005; Amdt. 190-15, 74 FR 62505, Nov. 30, 2009; Amdt. 190-16, 78 FR 58908, Sept. 25, 2013; Amdt. 190-18, 81 FR 70985, Oct. 14, 2016; Amdt. 190-19, 82 FR 7995, Jan. 23, 2017; Amdt. 190-21, 84 FR 52026, Oct. 1, 2019; Amdt. 190-23, 90 FR 28046, July 1, 2025]","As used in this part: Administrator means the Administrator, Pipeline and Hazardous Materials Safety Administration or his or her delegate. Associate Administrator means the Associate Administrator for Pipeline Safety, or his or her delegate. Chief Counsel means the Chief Counsel of PHMSA. Day means a 24-hour period ending at 11:59 p.m. Unless otherwise specified, a day refers to a calendar day. When a deadline mandated by this part is scheduled to fall on a day that is a Saturday, Sunday, or Federal holiday, the deadline will be adjusted to the next business day. Emergency order means a written order issued in response to an imminent hazard imposing restrictions, prohibitions, or safety measures on owners and operators of gas or hazardous liquid pipeline facilities, without prior notice or an opportunity for a hearing. Formal hearing means a formal review in accordance with 5 U.S.C. 554, conducted by an administrative law judge. Hearing means an informal conference or a proceeding for oral presentation. Unless otherwise specifically prescribed in this part, the use of “hearing” is not intended to require a hearing on the record in accordance with section 554 of title 5, U.S.C. Imminent hazard means the existence of a condition relating to a gas or hazardous liquid pipeline facility that presents a substantial likelihood that death, serious illness, severe personal injury, or a substantial endangerment to health, property, or the environment may occur before the reasonably foreseeable completion date of a formal proceeding begun to lessen the risk of such death, illness, injury or endangerment. New and novel technologies means any products, designs, materials, testing, construction, inspection, or operational procedures that are not addressed in 49 CFR parts 192, 193, or 195, due to technology or design advances and innovation for new construction. Technologies that are addressed in consensus standards that are incorporated by reference into parts 192, 193, and 195 are not “new or novel technologies.” OPS means the Office of Pipeline Safety, which is part of the Pipeline and Hazardous Materials Safety Administration, U.S. Department of Transportation. Operator means any owner or operator. Person means any individual, firm, joint venture, partnership, corporation, association, State, municipality, cooperative association, or joint stock association, and includes any trustee, receiver, assignee, or personal representative thereof. Presiding Official means the person who conducts any hearing relating to civil penalty assessments, compliance orders, orders directing amendment, safety orders, or corrective action orders and who has the duties and powers set forth in § 190.212. Regional Director means the head of any one of the Regional Offices of the Office of Pipeline Safety, or a designee appointed by the Regional Director. Regional Offices are located in Trenton, NJ (Eastern Region); Atlanta, Georgia (Southern Region); Kansas City, Missouri (Central Region); Houston, Texas (Southwest Region); and Lakewood, Colorado (Western Region). Respondent means a person upon whom OPS has served an enforcement action described in this part. PHMSA means the Pipeline and Hazardous Materials Safety Administration of the United States Department of Transportation. State means a State of the United States, the District of Columbia and the Commonwealth of Puerto Rico." 49:49:3.1.1.2.6.1.5.3,49,Transportation,I,D,190,PART 190—PIPELINE SAFETY ENFORCEMENT AND REGULATORY PROCEDURES,A,Subpart A—General,,§ 190.5 Service.,PHMSA,,,"[45 FR 20413, Mar. 27, 1980, as amended at 73 FR 16567, Mar. 28, 2008; Amdt. 190-16, 78 FR 58909, Sept. 25, 2013; Amdt. 190-18, 81 FR 70985, Oct. 14, 2016; Amdt. 190-21, 84 FR 52026, Oct. 1, 2019]","(a) Each order, notice, or other document required to be served under this part, will be served personally, by certified mail, overnight courier, or electronic transmission by facsimile or other electronic means that includes reliable acknowledgement of actual receipt. (b) Service upon a person's duly authorized representative or agent constitutes service upon that person. (c) Service by certified mail or overnight courier is complete upon mailing. Service by electronic transmission is complete upon transmission and acknowledgement of receipt. An official receipt for the mailing from the U.S. Postal Service or overnight courier, or a facsimile or other electronic transmission confirmation, constitutes prima facie evidence of service." 49:49:3.1.1.2.6.1.5.4,49,Transportation,I,D,190,PART 190—PIPELINE SAFETY ENFORCEMENT AND REGULATORY PROCEDURES,A,Subpart A—General,,§ 190.7 Subpoenas; witness fees.,PHMSA,,,"[45 FR 20413, Mar. 27, 1980, as amended by Amdt. 190-6, 61 FR 18513, Apr. 26, 1996; Amdt. 190-7, 63 FR 7722, Feb. 17, 1998; 70 FR 11137, Mar. 8, 2005; Amdt. 190-16, 78 FR 58909, Sept. 25, 2013]","(a) The Administrator, Chief Counsel, or the official designated by the Administrator to preside over a hearing convened in accordance with this part, may sign and issue subpoenas individually on his or her own initiative at any time, including pursuant to an inspection or investigation, or upon request and adequate showing by a participant to an enforcement proceeding that the information sought will materially advance the proceeding. (b) A subpoena may require the attendance of a witness, or the production of documentary or other tangible evidence in the possession or under the control of person served, or both. (c) A subpoena may be served personally by any person who is not an interested person and is not less than 18 years of age, or by certified mail. (d) Service of a subpoena upon the person named in the subpoena is achieved by delivering a copy of the subpoena to the person and by paying the fees for one day's attendance and mileage, as specified by paragraph (g) of this section. When a subpoena is issued at the instance of any officer or agency of the United States, fees and mileage need not be tendered at the time of service. Delivery of a copy of a subpoena and tender of the fees to a natural person may be made by handing them to the person, leaving them at the person's office with a person in charge, leaving them at the person's residence with a person of suitable age and discretion residing there, by mailing them by certified mail to the person at the last known address, or by any method whereby actual notice is given to the person and the fees are made available prior to the return date. (e) When the person to be served is not a natural person, delivery of a copy of the subpoena and tender of the fees may be achieved by handing them to a designated agent or representative for service, or to any officer, director, or agent in charge of any office of the person, or by mailing them by certified mail to that agent or representative and the fees are made available prior to the return date. (f) The original subpoena bearing a certificate of service shall be filed with the official having responsibility for the proceeding in connection with which the subpoena was issued. (g) A subpoenaed witness shall be paid the same fees and mileage as would be paid to a witness in a proceeding in the district courts of the United States. The witness fees and mileage shall be paid by the person at whose instance the subpoena was issued. (h) Notwithstanding the provisions of paragraph (g) of this section, and upon request, the witness fees and mileage may be paid by the PHMSA if the official who issued the subpoena determines on the basis of good cause shown, that: (1) The presence of the subpoenaed witness will materially advance the proceeding; and (2) The person at whose instance the subpoena was issued would suffer a serious hardship if required to pay the witness fees and mileage. (i) Any person to whom a subpoena is directed may, prior to the time specified therein for compliance, but in no event more than 10 days after the date of service of such subpoena, apply to the official who issued the subpoena, or if the person is unavailable, to the Administrator to quash or modify the subpoena. The application shall contain a brief statement of the reasons relied upon in support of the action sought therein. The Administrator, or this issuing official, as the case may be, may: (1) Deny the application; (2) Quash or modify the subpoena; or (3) Condition a grant or denial of the application to quash or modify the subpoena upon the satisfaction of certain just and reasonable requirements. The denial may be summary. (j) Upon refusal to obey a subpoena served upon any person under the provisions of this section, the PHMSA may request the Attorney General to seek the aid of the U. S. District Court for any District in which the person is found to compel that person, after notice, to appear and give testimony, or to appear and produce the subpoenaed documents before the PHMSA, or both." 49:49:3.1.1.2.6.1.5.5,49,Transportation,I,D,190,PART 190—PIPELINE SAFETY ENFORCEMENT AND REGULATORY PROCEDURES,A,Subpart A—General,,§ 190.9 Petitions for finding or approval.,PHMSA,,,"[Amdt. 190-5, 59 FR 17280, Apr. 12, 1994, as amended by Amdt. 190-6, 61 FR 18513, Apr. 26, 1996; 70 FR 11137, Mar. 8, 2005; 73 FR 16566, Mar. 28, 2008]","(a) In circumstances where a rule contained in parts 192, 193 and 195 of this chapter authorizes the Administrator to make a finding or approval, an operator may petition the Administrator for such a finding or approval. (b) Each petition must refer to the rule authorizing the action sought and contain information or arguments that justify the action. Unless otherwise specified, no public proceeding is held on a petition before it is granted or denied. After a petition is received, the Administrator or participating state agency notifies the petitioner of the disposition of the petition or, if the request requires more extensive consideration or additional information or comments are requested and delay is expected, of the date by which action will be taken. (1) For operators seeking a finding or approval involving intrastate pipeline transportation, petitions must be sent to: (i) The State agency certified to participate under 49 U.S.C. 60105. (ii) Where there is no state agency certified to participate, the Administrator, Pipeline and Hazardous Materials Safety Administration, 1200 New Jersey Avenue, SE, Washington, DC 20590. (2) For operators seeking a finding or approval involving interstate pipeline transportation, petitions must be sent to the Administrator, Pipeline and Hazardous Materials Safety Administration, 1200 New Jersey Avenue, SE, Washington, DC 20590. (c) All petitions must be received at least 90 days prior to the date by which the operator requests the finding or approval to be made. (d) The Administrator will make all findings or approvals of petitions initiated under this section. A participating state agency receiving petitions initiated under this section shall provide the Administrator a written recommendation as to the disposition of any petition received by them. Where the Administrator does not reverse or modify a recommendation made by a state agency within 10 business days of its receipt, the recommended disposition shall constitute the Administrator's decision on the petition." 49:49:3.1.1.2.6.1.5.6,49,Transportation,I,D,190,PART 190—PIPELINE SAFETY ENFORCEMENT AND REGULATORY PROCEDURES,A,Subpart A—General,,§ 190.11 Availability of informal guidance and interpretive assistance.,PHMSA,,,"[Amdt. 190-16, 78 FR 58909, Sept. 25, 2013]","(a) Availability of telephonic and Internet assistance. PHMSA has established a Web site and a telephone line to OPS headquarters where information on and advice about compliance with the pipeline safety regulations specified in 49 CFR parts 190-199 is available. The Web site and telephone line are staffed by personnel from PHMSA's OPS from 9:00 a.m. through 5:00 p.m., Eastern Time, Monday through Friday, with the exception of Federal holidays. When the lines are not staffed, individuals may leave a recorded voicemail message or post a message on the OPS Web site. The telephone number for the OPS information line is (202) 366-4595 and the OPS Web site can be accessed via the Internet at http://phmsa.dot.gov/pipeline. (b) Availability of written interpretations. A written regulatory interpretation, response to a question, or an opinion concerning a pipeline safety issue may be obtained by submitting a written request to the Office of Pipeline Safety (PHP-30), PHMSA, U.S. Department of Transportation, 1200 New Jersey Avenue SE., Washington, DC 20590-0001. The requestor must include his or her return address and should also include a daytime telephone number. Written requests should be submitted at least 120 days before the time the requestor needs a response." 49:49:3.1.1.2.6.2.5.1,49,Transportation,I,D,190,PART 190—PIPELINE SAFETY ENFORCEMENT AND REGULATORY PROCEDURES,B,Subpart B—Enforcement,,§ 190.201 Purpose and scope.,PHMSA,,,"[45 FR 20413, Mar. 27, 1980, as amended by Amdt. 190-6, 61 FR 18513, Apr. 26, 1996; Amdt. 190-16, 78 FR 58909, Sept. 25, 2013]","(a) This subpart describes the enforcement authority and sanctions exercised by the Associate Administrator for achieving and maintaining pipeline safety and compliance under 49 U.S.C. 60101 et seq., 33 U.S.C. 1321(j), and any regulation or order issued thereunder. It also prescribes the procedures governing the exercise of that authority and the imposition of those sanctions. (b) A person who is the subject of action pursuant to this subpart may be represented by legal counsel at all stages of the proceeding." 49:49:3.1.1.2.6.2.5.10,49,Transportation,I,D,190,PART 190—PIPELINE SAFETY ENFORCEMENT AND REGULATORY PROCEDURES,B,Subpart B—Enforcement,,"§ 190.212 Presiding official, powers, and duties.",PHMSA,,,"[Amdt. 190-16, 78 FR 58911, Sept. 25, 2013]","(a) General. The Presiding Official for a hearing conducted under § 190.211 is an attorney on the staff of the Deputy Chief Counsel who is not engaged in any investigative or prosecutorial functions, such as the issuance of notices under this subpart. If the designated Presiding Official is unavailable, the Deputy Chief Counsel may delegate the powers and duties specified in this section to another attorney in the Office of Chief Counsel who is not engaged in any investigative or prosecutorial functions under this subpart. (b) Time and place of the hearing. The Presiding Official will set the date, time and location of the hearing. To the extent practicable, the Presiding Official will accommodate the parties' schedules when setting the hearing. Reasonable notice of the hearing will be provided to all parties. (c) Powers and duties of Presiding Official. The Presiding Official will conduct a fair and impartial hearing and take all action necessary to avoid delay in the disposition of the proceeding and maintain order. The Presiding Official has all powers necessary to achieve those ends, including, but not limited to the power to: (1) Regulate the course of the hearing and conduct of the parties and their counsel; (2) Receive evidence and inquire into the relevant and material facts; (3) Require the submission of documents and other information; (4) Direct that documents or briefs relate to issues raised during the course of the hearing; (5) Set the date for filing documents, briefs, and other items; (6) Prepare a recommended decision; and (7) Exercise the authority necessary to carry out the responsibilities of the Presiding Official under this subpart." 49:49:3.1.1.2.6.2.5.11,49,Transportation,I,D,190,PART 190—PIPELINE SAFETY ENFORCEMENT AND REGULATORY PROCEDURES,B,Subpart B—Enforcement,,§ 190.213 Final order.,PHMSA,,,"[Amdt. 190-16, 78 FR 58911, Sept. 25, 2013]","(a) In an enforcement proceeding commenced under § 190.207, an attorney from the Office of Chief Counsel prepares a recommended decision after expiration of the 30-day response period prescribed in § 190.208. If a hearing is held, the Presiding Official prepares the recommended decision as set forth in § 190.211. The recommended decision is forwarded to the Associate Administrator who considers the case file and issues a final order. The final order includes— (1) A statement of findings and determinations on all material issues, including a determination as to whether each alleged violation has been proved; (2) If a civil penalty is assessed, the amount of the penalty and the procedures for payment of the penalty, provided that the assessed civil penalty may not exceed the penalty proposed in the notice of probable violation; and (3) If a compliance order is issued, a statement of the actions required to be taken by the respondent and the time by which such actions must be accomplished. (b) In cases where a substantial delay is expected in the issuance of a final order, notice of that fact and the date by which it is expected that action will be taken is provided to the respondent upon request and whenever practicable." 49:49:3.1.1.2.6.2.5.12,49,Transportation,I,D,190,PART 190—PIPELINE SAFETY ENFORCEMENT AND REGULATORY PROCEDURES,B,Subpart B—Enforcement,,§ 190.215 [Reserved],PHMSA,,,, 49:49:3.1.1.2.6.2.5.13,49,Transportation,I,D,190,PART 190—PIPELINE SAFETY ENFORCEMENT AND REGULATORY PROCEDURES,B,Subpart B—Enforcement,,§ 190.217 Compliance orders generally.,PHMSA,,,"[Amdt. 190-16, 78 FR 58912, Sept. 25, 2013]","When a Regional Director has reason to believe that a person is engaging in conduct that violates 49 U.S.C. 60101 et seq., 33 U.S.C. 1321(j), or any regulation or order issued thereunder, and if the nature of the violation and the public interest so warrant, the Regional Director may initiate proceedings under §§ 190.207 through 190.213 to determine the nature and extent of the violations and for the issuance of an order directing compliance." 49:49:3.1.1.2.6.2.5.14,49,Transportation,I,D,190,PART 190—PIPELINE SAFETY ENFORCEMENT AND REGULATORY PROCEDURES,B,Subpart B—Enforcement,,§ 190.219 Consent order.,PHMSA,,,"[45 FR 20413, Mar. 27, 1980, as amended by Amdt. 190-6, 61 FR 18514, Apr. 26, 1996; Amdt. 190-16, 78 FR 58912, Sept. 25, 2013]","(a) At any time prior to the issuance of a compliance order under § 190.217, a corrective action order under § 190.233, or a safety order under § 190.239, the Regional Director and the respondent may agree to resolve the case by execution of a consent agreement and order, which may be jointly executed by the parties and issued by the Associate Administrator. Upon execution, the consent order is considered a final order under § 190.213. (b) A consent order executed under paragraph (a) of this section shall include: (1) An admission by the respondent of all jurisdictional facts; (2) An express waiver of further procedural steps and of all right to seek judicial review or otherwise challenge or contest the validity of that order; (3) An acknowledgement that the notice of probable violation may be used to construe the terms of the consent order; and (4) A statement of the actions required of the respondent and the time by which such actions shall be accomplished. (c) Prior to the execution of a consent agreement and order arising out of a corrective action order under § 190.233, the Associate Administrator will notify any appropriate State official in accordance with 49 U.S.C. 60112(c)." 49:49:3.1.1.2.6.2.5.2,49,Transportation,I,D,190,PART 190—PIPELINE SAFETY ENFORCEMENT AND REGULATORY PROCEDURES,B,Subpart B—Enforcement,,§ 190.203 Inspections and investigations.,PHMSA,,,"[45 FR 20413, Mar. 27, 1980, as amended by Amdt. 190-3, 56 FR 31090, July 9, 1991; Amdt. 190-6, 61 FR 18513, Apr. 26, 1996; Amdt. 190-7, 61 FR 27792, June 3, 1996; Amdt. 190-7, 63 FR 7722, Feb. 17, 1998; 70 FR 11137, Mar. 8, 2005; Amdt. 190-16, 78 FR 58909, Sept. 25, 2013]","(a) Officers, employees, or agents authorized by the Associate Administrator for Pipeline Safety, PHMSA, upon presenting appropriate credentials, are authorized to enter upon, inspect, and examine, at reasonable times and in a reasonable manner, the records and properties of persons to the extent such records and properties are relevant to determining the compliance of such persons with the requirements of 49 U.S.C. 60101 et seq., or regulations or orders issued thereunder. (b) Inspections are ordinarily conducted pursuant to one of the following: (1) Routine scheduling by the Regional Director of the Region in which the facility is located; (2) A complaint received from a member of the public; (3) Information obtained from a previous inspection; (4) Report from a State Agency participating in the Federal Program under 49 U.S.C. 60105; (5) Pipeline accident or incident; or (6) Whenever deemed appropriate by the Associate Administrator. (c) If the Associate Administrator or Regional Director believes that further information is needed to determine appropriate action, the Associate Administrator or Regional Director may notify the pipeline operator in writing that the operator is required to provide specific information within 30 days from the time the notification is received by the operator, unless otherwise specified in the notification. The notification must provide a reasonable description of the specific information required. An operator may request an extension of time to respond by providing a written justification as to why such an extension is necessary and proposing an alternative submission date. A request for an extension may ask for the deadline to be stayed while the extension is considered. General statements of hardship are not acceptable bases for requesting an extension. (d) To the extent necessary to carry out the responsibilities under 49 U.S.C. 60101 et seq., the Administrator, or the Associate Administrator, may require testing of portions of pipeline facilities that have been involved in, or affected by, an accident. However, before exercising this authority, the Administrator, or the Associate Administrator, shall make every effort to negotiate a mutually acceptable plan with the owner of those facilities and, where appropriate, the National Transportation Safety Board for performing the testing. (e) If a representative of the U.S. Department of Transportation inspects or investigates an accident or incident involving a pipeline facility, the operator must make available to the representative all records and information that pertain to the event in any way, including integrity management plans and test results. The operator must provide all reasonable assistance in the investigation. Any person who obstructs an inspection or investigation by taking actions that were known or reasonably should have been known to prevent, hinder, or impede an investigation without good cause will be subject to administrative civil penalties under this subpart. (f) When OPS determines that the information obtained from an inspection or from other appropriate sources warrants further action, OPS may initiate one or more of the enforcement proceedings prescribed in this subpart." 49:49:3.1.1.2.6.2.5.3,49,Transportation,I,D,190,PART 190—PIPELINE SAFETY ENFORCEMENT AND REGULATORY PROCEDURES,B,Subpart B—Enforcement,,§ 190.205 Warnings.,PHMSA,,,"[Amdt. 190-16, 78 FR 58909, Sept. 25, 2013]","Upon determining that a probable violation of 49 U.S.C. 60101 et seq., 33 U.S.C. 1321(j), or any regulation or order issued thereunder has occurred, the Associate Administrator or a Regional Director may issue a written warning notifying the operator of the probable violation and advising the operator to correct it or be subject to potential enforcement action in the future. The operator may submit a response to a warning, but is not required to. An adjudication under this subpart to determine whether a violation occurred is not conducted for warnings." 49:49:3.1.1.2.6.2.5.4,49,Transportation,I,D,190,PART 190—PIPELINE SAFETY ENFORCEMENT AND REGULATORY PROCEDURES,B,Subpart B—Enforcement,,§ 190.206 Amendment of plans or procedures.,PHMSA,,,"[Amdt. 190-16, 78 FR 58910, Sept. 25, 2013]","(a) A Regional Director begins a proceeding to determine whether an operator's plans or procedures required under parts 192, 193, 195, and 199 of this subchapter are inadequate to assure safe operation of a pipeline facility by issuing a notice of amendment. The notice will specify the alleged inadequacies and the proposed revisions of the plans or procedures and provide an opportunity to respond. The notice will allow the operator 30 days following receipt of the notice to submit written comments, revised procedures, or a request for a hearing under § 190.211. (b) After considering all material presented in writing or at the hearing, if applicable, the Associate Administrator determines whether the plans or procedures are inadequate as alleged. The Associate Administrator issues an order directing amendment of the plans or procedures if they are inadequate, or withdraws the notice if they are not. In determining the adequacy of an operator's plans or procedures, the Associate Administrator may consider: (1) Relevant pipeline safety data; (2) Whether the plans or procedures are appropriate for the particular type of pipeline transportation or facility, and for the location of the facility; (3) The reasonableness of the plans or procedures; and (4) The extent to which the plans or procedures contribute to public safety. (c) An order directing amendment of an operator's plans or procedures prescribed in this section may be in addition to, or in conjunction with, other appropriate enforcement actions prescribed in this subpart." 49:49:3.1.1.2.6.2.5.5,49,Transportation,I,D,190,PART 190—PIPELINE SAFETY ENFORCEMENT AND REGULATORY PROCEDURES,B,Subpart B—Enforcement,,§ 190.207 Notice of probable violation.,PHMSA,,,"[45 FR 20413, Mar. 27, 1980, as amended by Amdt. 190-6, 61 FR 18513, Apr. 26, 1996; Amdt. 190-16, 78 FR 58910, Sept. 25, 2013]","(a) Except as otherwise provided by this subpart, a Regional Director begins an enforcement proceeding by serving a notice of probable violation on a person charging that person with a probable violation of 49 U.S.C. 60101 et seq., 33 U.S.C. 1321(j), or any regulation or order issued thereunder. (b) A notice of probable violation issued under this section shall include: (1) Statement of the provisions of the laws, regulations or orders which the respondent is alleged to have violated and a statement of the evidence upon which the allegations are based; (2) Notice of response options available to the respondent under § 190.208; (3) If a civil penalty is proposed under § 190.221, the amount of the proposed civil penalty and the maximum civil penalty for which respondent is liable under law; and (4) If a compliance order is proposed under § 190.217, a statement of the remedial action being sought in the form of a proposed compliance order. (c) The Regional Director may amend a notice of probable violation at any time prior to issuance of a final order under § 190.213. If an amendment includes any new material allegations of fact, proposes an increased civil penalty amount, or proposes new or additional remedial action under § 190.217, the respondent will have the opportunity to respond under § 190.208." 49:49:3.1.1.2.6.2.5.6,49,Transportation,I,D,190,PART 190—PIPELINE SAFETY ENFORCEMENT AND REGULATORY PROCEDURES,B,Subpart B—Enforcement,,§ 190.208 Response options.,PHMSA,,,"[Amdt. 190-16, 78 FR 58910, Sept. 25, 2013]","Within 30 days of receipt of a notice of probable violation, the respondent must answer the Regional Director who issued the notice in the following manner: (a) When the notice contains a proposed civil penalty— (1) If the respondent is not contesting an allegation of probable violation, pay the proposed civil penalty as provided in § 190.227 and advise the Regional Director of the payment. The payment authorizes the Associate Administrator to make a finding of violation and to issue a final order under § 190.213; (2) If the respondent is not contesting an allegation of probable violation but wishes to submit a written explanation, information, or other materials the respondent believes may warrant mitigation or elimination of the proposed civil penalty, the respondent may submit such materials. This authorizes the Associate Administrator to make a finding of violation and to issue a final order under § 190.213; (3) If the respondent is contesting one or more allegations of probable violation but is not requesting a hearing under § 190.211, the respondent may submit a written response in answer to the allegations; or (4) The respondent may request a hearing under § 190.211. (b) When the notice contains a proposed compliance order— (1) If the respondent is not contesting an allegation of probable violation, agree to the proposed compliance order. This authorizes the Associate Administrator to make a finding of violation and to issue a final order under § 190.213; (2) Request the execution of a consent order under § 190.219; (3) If the respondent is contesting one or more of the allegations of probable violation or compliance terms, but is not requesting a hearing under § 190.211, the respondent may object to the proposed compliance order and submit written explanations, information, or other materials in answer to the allegations in the notice of probable violation; or (4) The respondent may request a hearing under § 190.211. (c) Before or after responding in accordance with paragraph (a) of this section or, when applicable paragraph (b) of this section, the respondent may request a copy of the violation report from the Regional Director as set forth in § 190.209. The Regional Director will provide the violation report to the respondent within five business days of receiving a request. (d) Failure to respond in accordance with paragraph (a) of this section or, when applicable paragraph (b) of this section, constitutes a waiver of the right to contest the allegations in the notice of probable violation and authorizes the Associate Administrator, without further notice to the respondent, to find the facts as alleged in the notice of probable violation and to issue a final order under § 190.213. (e) All materials submitted by operators in response to enforcement actions may be placed on publicly accessible Web sites. A respondent seeking confidential treatment under 5 U.S.C. 552(b) for any portion of its responsive materials must provide a second copy of such materials along with the complete original document. A respondent may redact the portions it believes qualify for confidential treatment in the second copy but must provide a written explanation for each redaction." 49:49:3.1.1.2.6.2.5.7,49,Transportation,I,D,190,PART 190—PIPELINE SAFETY ENFORCEMENT AND REGULATORY PROCEDURES,B,Subpart B—Enforcement,,§ 190.209 Case file.,PHMSA,,,"[Amdt. 190-16, 78 FR 58910, Sept. 25, 2013]","(a) The case file, as defined in this section, is available to the respondent in all enforcement proceedings conducted under this subpart. (b) The case file of an enforcement proceeding consists of the following: (1) In cases commenced under § 190.206, the notice of amendment and the relevant procedures; (2) In cases commenced under § 190.207, the notice of probable violation and the violation report; (3) In cases commenced under § 190.233, the corrective action order or notice of proposed corrective action order and the data report, if one is prepared; (4) In cases commenced under § 190.239, the notice of proposed safety order; (5) Any documents and other material submitted by the respondent in response to the enforcement action; (6) In cases involving a hearing, any material submitted during and after the hearing as set forth in § 190.211; and (7) The Regional Director's written evaluation of response material submitted by the respondent and recommendation for final action, if one is prepared." 49:49:3.1.1.2.6.2.5.8,49,Transportation,I,D,190,PART 190—PIPELINE SAFETY ENFORCEMENT AND REGULATORY PROCEDURES,B,Subpart B—Enforcement,,§ 190.210 Separation of functions.,PHMSA,,,"[Amdt. 190-16, 78 FR 58911, Sept. 25, 2013]","(a) General. An agency employee who assists in the investigation or prosecution of an enforcement case may not participate in the decision of that case or a factually related one, but may participate as a witness or counsel at a hearing as set forth in this subpart. Likewise, an agency employee who prepares a decision in an enforcement case may not have served in an investigative or prosecutorial capacity in that case or a factually related one. (b) Prohibition on ex parte communications. A party to an enforcement proceeding, including the respondent, its representative, or an agency employee having served in an investigative or prosecutorial capacity in the proceeding, may not communicate privately with the Associate Administrator, Presiding Official, or attorney drafting the recommended decision concerning information that is relevant to the questions to be decided in the proceeding. A party may communicate with the Presiding Official regarding administrative or procedural issues, such as for scheduling a hearing." 49:49:3.1.1.2.6.2.5.9,49,Transportation,I,D,190,PART 190—PIPELINE SAFETY ENFORCEMENT AND REGULATORY PROCEDURES,B,Subpart B—Enforcement,,§ 190.211 Hearing.,PHMSA,,,"[Amdt. 190-16, 78 FR 58911, Sept. 25, 2013]","(a) General. This section applies to hearings conducted under this part relating to civil penalty assessments, compliance orders, orders directing amendment, safety orders, and corrective action orders. The Presiding Official will convene hearings conducted under this section. (b) Hearing request and statement of issues. A request for a hearing must be accompanied by a statement of the issues that the respondent intends to raise at the hearing. The issues may relate to the allegations in the notice, the proposed corrective action, or the proposed civil penalty amount. A respondent's failure to specify an issue may result in waiver of the respondent's right to raise that issue at the hearing. The respondent's request must also indicate whether or not the respondent will be represented by counsel at the hearing. The respondent may withdraw a request for a hearing in writing and provide a written response. (c) Telephonic and in-person hearings. A telephone hearing will be held if the amount of the proposed civil penalty or the cost of the proposed corrective action is less than $25,000, unless the respondent or OPS submits a written request for an in-person hearing. In-person hearings will normally be held at the office of the appropriate OPS Region. Hearings may be held by video teleconference if the necessary equipment is available to all parties. (d) Pre-hearing submissions. If OPS or the respondent intends to introduce material, including records, documents, and other exhibits not already in the case file, the material must be submitted to the Presiding Official and the other party at least 10 days prior to the date of the hearing, unless the Presiding Official sets a different deadline or waives the deadline for good cause. (e) Conduct of the hearing. The hearing is conducted informally without strict adherence to rules of evidence. The Presiding Official regulates the course of the hearing and gives each party an opportunity to offer facts, statements, explanations, documents, testimony or other evidence that is relevant and material to the issues under consideration. The parties may call witnesses on their own behalf and examine the evidence and witnesses presented by the other party. After the evidence in the case has been presented, the Presiding Official will permit reasonable discussion of the issues under consideration. (f) Written transcripts. If a respondent elects to transcribe a hearing, the respondent must make arrangements with a court reporter at cost to the respondent and submit a complete copy of the transcript for the case file. The respondent must notify the Presiding Official in advance if it intends to transcribe a hearing. (g) Post-hearing submission. The respondent and OPS may request an opportunity to submit further written material after the hearing for inclusion in the record. The Presiding Official will allow a reasonable time for the submission of the material and will specify the submission date. If the material is not submitted within the time prescribed, the case will proceed to final action without the material. (h) Preparation of decision. After consideration of the case file, the Presiding Official prepares a recommended decision in the case, which is then forwarded to the Associate Administrator for issuance of a final order." 49:49:3.1.1.2.6.2.6.15,49,Transportation,I,D,190,PART 190—PIPELINE SAFETY ENFORCEMENT AND REGULATORY PROCEDURES,B,Subpart B—Enforcement,,§ 190.221 Civil penalties generally.,PHMSA,,,"[Amdt. 190-16, 78 FR 58912, Sept. 25, 2013]","When a Regional Director has reason to believe that a person has committed an act violating 49 U.S.C. 60101 et seq., 33 U.S.C. 1321(j), or any regulation or order issued thereunder, the Regional Director may initiate proceedings under §§ 190.207 through 190.213 to determine the nature and extent of the violations and appropriate civil penalty." 49:49:3.1.1.2.6.2.6.16,49,Transportation,I,D,190,PART 190—PIPELINE SAFETY ENFORCEMENT AND REGULATORY PROCEDURES,B,Subpart B—Enforcement,,§ 190.223 Maximum penalties.,PHMSA,,,"[Amdt. 190-16, 78 FR 58912, Sept. 25, 2013, as amended at 81 FR 42566, June 30, 2016; Amdt. 190-17, 82 FR 19328, Apr. 27, 2017; 84 FR 37071, July 31, 2019; 86 FR 1756, Jan 11, 2021; 86 FR 23252, May 3, 2021; 87 FR 15866, Mar. 21, 2022; 88 FR 1125, Jan. 6, 2023; 88 FR 89560, Dec. 28, 2023; 89 FR 106294, Dec. 30, 2024]","(a) Any person found to have violated a provision of 49 U.S.C. 60101, et seq., or any regulation in 49 CFR parts 190 through 199, or order issued pursuant to 49 U.S.C. 60101, et seq. or 49 CFR part 190, is subject to an administrative civil penalty not to exceed $272,926 for each violation for each day the violation continues, with a maximum administrative civil penalty not to exceed $2,729,245 for any related series of violations. (b) Any person found to have violated a provision of 33 U.S.C. 1321(j), or any regulation or order issued thereunder, is subject to an administrative civil penalty under 33 U.S.C. 1321(b)(6), as adjusted by 40 CFR 19.4. (c) Any person found to have violated any standard or order under 49 U.S.C. 60103 is subject to an administrative civil penalty not to exceed $99,704, which may be in addition to other penalties to which such person may be subject under paragraph (a) of this section. (d) Any person who is determined to have violated any standard or order under 49 U.S.C. 60129 is subject to an administrative civil penalty not to exceed $1,584, which may be in addition to other penalties to which such person may be subject under paragraph (a) of this section. (e) Separate penalties for violating a regulation prescribed under this subchapter and for violating an order issued under §§ 190.206, 190.213, 190.233, or 190.239 may not be imposed under this section if both violations are based on the same act."