§24 — Title 7 Agriculture | U.S. Code

Summary

The Commission can make rules about what counts as customer or member property when a commodity broker is a debtor under chapter 7 of title 11. It can say which cash, securities, other items, or commodity contracts are included or excluded, require some items to be tied to a particular customer, set how the broker’s business is run or wound up after the chapter 7 filing (including handling margin on contracts not tied to a customer), name who may receive customer property under section 766 of title 11, and set how a customer’s net equity is figured. The words "commodity broker," "commodity contract," "customer," "customer property," "member property," "net equity," and "security" are to be read as they are defined in subchapter IV of chapter 7 of title 11. The Commission must also treat securities in a portfolio margining account carried as a futures account as customer property and treat the account owners as customers under that subchapter.

Title 7, §24

Agriculture — Source: USLM XML via OLRC

(a)Notwithstanding title 11, the Commission may provide, with respect to a commodity broker that is a debtor under chapter 7 of title 11, by rule or regulation—

(1)that certain cash, securities, other property, or commodity contracts are to be included in or excluded from customer property or member property;

(2)that certain cash, securities, other property, or commodity contracts are to be specifically identifiable to a particular customer in a specific capacity;

(3)the method by which the business of such commodity broker is to be conducted or liquidated after the date of the filing of the petition under such chapter, 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 title 11; and

(5)how the net equity of a customer is to be determined.

(b)As used in this section, the terms “commodity broker”, “commodity contract”, “customer”, “customer property”, “member property”, “net equity”, and “security” have the meanings assigned such terms for the purposes of subchapter IV of chapter 7 of title 11.

(c)The Commission shall exercise its authority to ensure that securities held in a portfolio margining account carried as a futures account are customer property and the owners of those accounts are customers for the purposes of subchapter IV of chapter 7 of title 11.

Notes & Related Subsidiaries

Editorial Notes

Amendments

2010—Subsec. (c). Pub. L. 111–203 added subsec. (c). 1982—Subsec. (a)(3). Pub. L. 97–222, § 20(b), inserted “, including the payment and allocation of margin with respect to commodity contracts not specifically identifiable to a particular customer pending their orderly liquidation”.

Statutory Notes and Related Subsidiaries

Effective Date

of 2010 AmendmentAmendment by Pub. L. 111–203 effective on the later of 360 days after July 21, 2010, or, to the extent a provision of subtitle A (§§ 711–754) of title VII of Pub. L. 111–203 requires a rulemaking, not less than 60 days after publication of the final rule or regulation implementing such provision of subtitle A, see section 754 of Pub. L. 111–203, set out as a note under section 1a of this title.

Effective Date

Section effective Nov. 6, 1978, see section 402(d) of Pub. L. 95–598, set out as a note preceding section 101 of Title 11, Bankruptcy.

§24 Customer property with respect to commodity broker debtors; definitions

Summary

Title 7, §24

Notes & Related Subsidiaries

Editorial Notes

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Citations & Metadata