Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Notices 63555

7 DTC will accept past due coupons into the

coupon collection service program for up to three

years after the original coupon payment date.

8According to DTC, payments due DTC from

issuers and paying agents are received on or before

the payable date between 97 and 98 percent of the

time. Typically, late payments are the result of

transmission problems or equipment failures that

are unrelated to the ability of the issuer or paying

agent to actually make such payments. Telephone

conversation between Piku K. Thakkar, Assistant

Counsel, DTC; Ann Reich, DTC; and Mark

Steffensen, Attorney, Division, Commission

(October 17, 1995).

9 15 U.S.C. § 78q–1 (1988).

10 17 CFR 200.30–3(a)(12) (1994).

1 15 U.S.C. 78s(b)(1) (1988).

2Letter from Jeffrey F. Ingber, General Counsel

and Secretary, GSCC, to Jerry W. Carpenter,

Assistant Director, Division of Market Regulation,

Commission (October 26, 1995).

3The netting system is a system for aggregating

and matching offsetting obligations resulting from

trades submitted by or on behalf of members in

eligible securities. The resulting deliver, receive,

and payment obligations are settled through

designated clearing banks.

eight business days prior to payable date

will be credited to the participant on the

payable date. Interest for coupons for

which the paying agent is located

outside of New York City that are

deposited less than eight business days

prior to payable date will be credited to

the participant ten business days

following the date of the deposit.

Interest for coupons for which the

paying agent is located in New York

City that are deposited at least five

business days prior to the payable date

will be credited to the participant on the

payable date. Interest for coupons for

which the paying agent is located in

New York City that are deposited less

than five business days prior to payable

date will be credited to the participant

seven business days following the date

of the deposit. Interest for past due

coupons will be credited to the

participant as if they were received less

than eight business days prior to the

original payable date if the paying agent

is located outside New York City and

less than five business days prior to the

original payable date if the paying agent

is located in New York City.7

DTC will credit the accounts of its

depositing participants on the foregoing

payable dates without regard to whether

DTC actually has received the interest

payment from the issuer or paying agent

as of such date.8 All coupons deposited

after 11:00 a.m. will be considered to be

received the following business day. In

addition, during the first quarter of

1996, a new Participant Terminal

System function will be made available

which will enable DTC participants to

view the status of their coupon deposits.

DTC proposes to charge its

participants the following fees for this

service:

Shells deposited a minimum of 15 days

before payable date: $4.50.

Shells deposited less than 15 days

before payable date (including past

due coupons): $5.25.

Rejected shells: $15.00.

DTC believes the proposed rule

change is consistent with the

requirements of Section 17A of the Act 9

and the rules and regulations

thereunder because it promotes

efficiencies in the clearance and

settlement of securities transactions.

The proposed rule change will be

implemented in a manner designed to

safeguard the securities and funds in

DTC’s custody or under its control.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

DTC does not believe that the

proposed rule change will impose any

burden on competition that is not

necessary or appropriate in furtherance

of the purposes of the Act, in the public

interest, and for the protection of

investors.

(C) Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received from

Members, Participants, or Others

Written comments from DTC

participants and others have not been

solicited nor received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within thirty-five days of the date of

publication of this notice in the Federal

Register or within such longer period (i)

as the Commission may designate up to

ninety days of such date if it finds such

longer period to be appropriate and

publishes its reasons for so finding or

(ii) as to which DTC consents, the

Commission will:

(a) By order approve such proposed

rule change or

(b) Institute proceedings to determine

whether the proposed rule change

should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of the

submission, all subsequent

amendments, all written statements

with respect to the proposed rule

change that are filed with the

Commission, and all written

communications relating to the

proposed rule change between the

Commission and any person, other than

those that may be withheld from the

public in accordance with the

provisions of 5 U.S.C. 552, will be

available for inspection and copying in

the commission’s Public Reference

Room 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of DTC. All submissions should

refer to the file number SR–DTC–95–18

and should be submitted by January 2,

1996.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.10

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–30072 Filed 12–8–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–36544; International Series

Release No. 897; File No. SR–GSCC–95–

05]

Self-Regulatory Organizations;

Government Securities Clearing

Corporation; Notice of Filing of a

Proposed Rule Change Permitting

Entities Established or Organized in a

Foreign Country to Become Members

of GSCC’s Netting System

December 1, 1995.

Pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’),1 notice is hereby given that on

October 6, 1995, Government Securities

Clearing Corporation (‘‘GSCC’’) filed

with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change (File No. SR–

GSCC–95–05) as described in Items, I, II,

and III below, which items have been

prepared primarily by GSCC. On

October 30, 1995, GSCC filed an

amendment to the proposed rule

change.2 The Commission is publishing

this notice to solicit comments on the

proposed rule change from interested

persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The purpose of the proposed rule

change is to amend GSCC’s rules to

enable entities that are established or

organized in a foreign country and

regulated in a manner comparable to

domestic entities eligible for GSCC

membership to become members of

GSCC’s netting system.3
63556 Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Notices

4The Commission has modified the text of the

summaries prepared by GSCC.

5 GSCC maintains a list of ‘‘grandfathered’’

entities which are non-netting system members that

historically have done business with GSCC’s

interdealer netting members. Business done by the

interdealer broker netting members with

grandfathered entities is treated by GSCC as

business done with an actual netting member.

GSCC’s goal is to eliminate the list of granfathered

entities by having each of the entities on that list

become a member of the netting system.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

GSCC included statements concerning

the purpose of and basis for the

proposed rule change and discussed any

comments it received on the proposed

rule change. The text of these statements

may be examined at the places specified

in Item IV below. GSCC has prepared

summaries, set forth in sections (A), (C),

and (B) below, of the most significant

aspects of such statements.4

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

The purpose of this proposed rule

change is to permit entities that are

organized or established under the laws

of a country other than the United States

(‘‘foreign entities’’) and that are

regulated in a manner comparable to

domestic entities eligible for GSCC

membership to become members of

GSCC’s netting system. Currently, a

foreign entity is eligible to apply to

become a comparison-only member if it

has demonstrated to GSCC that its

business and capabilities are such that

it could reasonably expect material

benefit from direct access to GSCC’s

services. The proposed rule change also

will establish new requirements

applicable to foreign comparison-only

members.

Currently, GSCC has eleven

enumerated categories of netting system

membership. A foreign entity is not

eligible for any of these categories of

netting membership. Nevertheless,

foreign entities are among the most

significant participants in the

government securities marketplace and

trade actively with many current netting

members. Six of the seven firms on

GSCC’s list of grandfathered entities

(Daiwa Europe Ltd.; Nikko Europe PLC;

The Nikko Securities Co., Ltd., Tokyo;

Nomura International PLC, London;

Nomura International Inc., Tokyo; and

Nomura Securities Co., Ltd., Tokyo) are

foreign entities.5 GSCC believes it is

appropriate for regulated foreign entities

to be eligible for netting system

membership and proposes to establish a

new category of netting system

membership for such foreign entities.

GSCC recognizes that admitting

foreign entities to netting system

membership raises various unique

issues and concerns for GSCC in

connection with the legal and financial

requirements for those entities,

information sharing obligations, the

requirements of the foreign entities’

home country, and the physical

presence of the foreign entities in the

United States. GSCC’s proposed rule

change addresses each of these issues as

discussed below. Except as otherwise

indicated, the requirements set forth

below are not applicable to a foreign

entity that applies for membership only

in GSCC’s comparison system.

1. Legal Considerations

In order to address the particular legal

concerns raised by the admission of

foreign entities to netting system

membership, GSCC will require foreign

netting system applicants to enter into

a special netting member agreement

(‘‘Agreement’’). The Agreement, which

generally requires the foreign netting

system applicant to adhere to GSCC’s

rules, will provide that the Agreement

shall be governed by and construed in

accordance with the laws of the State of

New York.

Under the Agreement, the foreign

entity (i) irrevocably waives all

immunity for attachment of its assets in

this country, (ii) irrevocably submits to

the jurisdiction of a court in the U.S.

with respect to any action or proceeding

brought against it relating in any way to

the Agreement, (iii) irrevocably waives

any objection to the laying of venue in

a court in the U.S., (iv) expressly states

that any judgment obtained against it by

GSCC may be enforced in the courts of

any jurisdiction where it or any of its

property may be found and will

irrevocably submit to the jurisdiction of

each such court, (v) agrees that payment

of any judgment obtained by GSCC shall

be in U.S. dollars, and (vi) agrees to

provide GSCC with information on its

financial condition and/or trading

activity that is deemed pertinent by

GSCC and understands and agrees that

any such information may be provided

by GSCC to the Commission.

GSCC further will require the foreign

netting system applicant to submit an

opinion of foreign counsel (‘‘Opinion’’).

The Opinion must provide that the

execution by the foreign entity of the

Agreement with GSCC, the foreign

entity’s performance under the

Agreement, and the exercise by GSCC of

its rights and remedies under the

Agreement will not conflict with or be

impeded by the laws or regulations of

the foreign entity’s home country and

will be respected by the foreign entity’s

primary foreign regulator. In addition,

the Opinion must state that the

Agreement’s provision for governance

by and construction in accordance with

the laws of the State of New York will

be recognized and given effect by the

courts of the foreign entity’s home

country.

The Opinion also must provide the (i)

The waiver by the foreign entity of all

immunity from attachment of its assets

in the U.S. is valid and will be

recognized and given effect by the

courts of the foreign entity’s home

country, (ii) for foreign entity has the

power to irrevocably submit to the

jurisdiction of a court in the U.S. and to

waive all objections to venue, (iii) any

judgment obtained against the foreign

entity by GSCC may be enforced in the

courts of any jurisdiction where the

foreign entity or any of its property may

be enforced in the courts of any

jurisdiction where the foreign entity or

any of its property may be found and its

submission to the jurisdiction of each

such court is valid and will be

recognized and given effect by the

courts of the foreign entity’s home

country, (iv) GSCC can institute in the

foreign entity’s home country an action

for breach of the Agreement without

first having to obtain a judgment against

the entity in the U.S., and (v) GSCC can

institute in the U.S. an action for breach

of the Agreement without first having to

obtain a judgment against the entity in

the entity’s home country. Finally, the

Opinion must state that the foreign

entity has the power to provide GSCC

with information in its financial

condition and/or trading activity that is

deemed pertinent by GSCC and that

neither the foreign entity’s compliance

with such a request nor the sharing by

GSCC of such information with the

Commission will conflict with or be

impeded by the laws or regulations of

the foreign entity’s home country and

will be respected by the foreign entity’s

primary foreign regulator.

In addition to the Agreement and the

Opinion, GSCC also will require any

foreign netting system applicant to

submit a designation specifying an

appropriate person or persons located in

the State of New York as its agent to

receive service of process or other legal

summons.

While there will be no special

agreement applicable to a foreign entity

that applies for membership in GSCC’s

comparison system, such entity will be

required to provide to GSCC an opinion

of foreign counsel stating that (i) the

execution by the foreign entity of the
Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Notices 63557

comparison-only member agreement

(‘‘Comparison Agreement’’) with GSCC,

its performance under that agreement,

and the exercise by GSCC of its rights

and remedies under that agreement will

not conflict with or be impeded by the

laws or regulations of the foreign

entity’s home country and will be

respected by the foreign entity’s primary

foreign regulator and (ii) the language in

the Comparison Agreement providing

that the agreement shall be governed by

and construed in accordance with the

laws of the State of New York will be

recognized and given effect by the

courts of the foreign entity’s home

country.

2. Minimum Financial Standards and

Clearing Fund Requirements

GSCC also seeks to amend its rules to

establish minimum financial standards

and clearing fund requirements for

foreign netting system applicants. The

minimum financial standards, the

clearing fund deposit, and any other

payments or deposits called for under

GSCC’s rules required to be met by a

foreign meeting system member will be

the same as those applicable to the

domestic netting system membership

category that in GSCC’s sole

determination is most comparable in

type to the foreign entity. In making this

determination, GSCC will take into

account, among other things, whether

the entity’s trading activity is done

primarily for itself or for others. If a

foreign netting system members falls out

of compliance with its minimum

financial requirements, the

consequences of such noncompliance

shall be determined by reference to the

subsection of GSCC Rule 3, Section 5

that is applicable to the netting system

membership category upon which the

foreign entity’s minimum financial

standards are based.

3. Home Country Standards

In order to be eligible for netting

system membership, the foreign entity

will have to be in compliance with the

financial reporting and responsibility

standards of its home country. The

foreign entity applying for netting

system membership will have to be

regulated in its home country in ways

and pursuant to provisions comparable

to those imposed on domestic members

of a comparable type.

4. Information Sharing/Regulatory and

Financial Reporting

To insure appropriate information

sharing, the foreign entity applying for

netting system membership must have a

home country regulator that has entered

into a memorandum of understanding

with the Commission regarding the

sharing or exchange of information. In

its application for membership (either

comparison-only or netting system), the

foreign entity will have to agree to

provide GSCC with all material

regulatory filings made with its primary

home country regulator over the prior

year, audited financial statements for

the prior three years, and any other

financial information deemed by GSCC

to be necessary in order to protect GSCC

and its members. Upon acceptance to

comparison-only or netting system

membership, a foreign member must

provide GSCC with all material

regulatory filings made with its primary

home country regulator promptly

following its filing with such regulator,

audited financial statement, and any

other financial information deemed by

GSCC to be necessary in order to protect

GSCC and its members.

GSCC ordinarily will accept for

financial monitoring purposes audited

financial statements prepared in

accordance with the home country’s

generally accepted accounting

principles (‘‘GAAP’’). If GSCC believes

that those statements are not

satisfactory, it will assess whether the

foreign entity can provide information

equivalent to that information provided

by financial statements prepared in

accordance with U.S. GAAP. All

required financial and other reports will

have to be submitted to GSCC in

English. All required financial reports

will have to be submitted to GSCC in

dollar equivalents indicating the

conversion rate and date used.

As noted above, pursuant to the

Agreement the foreign netting system

member will have agreed to provide

GSCC with information on its financial

condition and/or trading activity

deemed pertinent by GSCC and that

GSCC may share this information with

the Commission. In addition, GSCC will

expect the foreign entity to prepare and

provide to GSCC information in the

form of unaudited financials sufficient

for GSCC to monitor and assess the

entity’s financial condition on no less

than a quarterly basis.

5. Physical Presence

With respect to the foreign netting

member’s physical presence in the U.S.,

GSCC will require every foreign entity

to maintain an office in the U.S. either

directly or through a suitable agent that

(i) has available individuals fluent in

English who are knowledgeable about

the entity’s business and can assist

GSCC representatives as necessary and

(ii) ensures that the foreign member can

meet its data submission and settlement

obligations to GSCC.

GSCC believes the proposed rule

change is consistent with the

requirements of Section 17A of the Act

and the rules and regulations

thereunder because the rule proposal

will extend the benefits of GSCC’s

netting and risk management processes

to a broader segment of government

securities market participants and will

provide those benefits to trades of

current members with foreign entity

counterparties.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

GSCC does not believe that the

proposed rule will have an impact on or

impose a burden on competition.

(C) Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

Comments on the proposed rule

change have not yet been solicited.

GSCC members will be notified of the

rule filing and comments will be

solicited by an important notice. GSCC

will notify the Commission of any

written comments received by GSCC.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within thirty-five days of the date of

publication in this notice in the Federal

Register or within such longer period (i)

as the Commission may designate up to

ninety days of such date if it finds such

longer period to be appropriate and

publishes its reasons for so finding or

(ii) as to which the self-regulatory

organization consents, the Commission

will:

(a) By order approve such proposed

rule change or

(b) Institute proceedings to determine

whether the proposed rule change

should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street NW.,

Washington, DC 20549. Copies of the

submission, all subsequent

amendments, all written statements

with respect to the proposed rule

change that are filed with the

Commission, and all written

communications relating to the

proposed rule change between the

Commission and any person, other than

those that may be withheld from the

public in accordance with provisions of
63558 Federal Register / Vol. 60, No. 237 / Monday, December 11, 1995 / Notices

6 17 CFR 200.30–3(a)(12) (1994).

1 15 U.S.C. § 78s(b)(1) (1988).

2Letters from Jean M. Cawley, OCC, to Jerry W.

Carpenter, Assistant Director, Division of Market

Regulation, Commission (September 11, 1995, and

October 10, 1995).

3The CFTC’s distributional requirements are set

forth in Appendix B to Part 190 of the CFTC’s

General Regulations. 17 CFR 190. The CFTC’s

distributional framework was adopted in April

1994. 59 FR 17468 (April 13, 1994).

4The Commission has modified the text of the

summaries prepared by OCC.

5Securities Exchange Act Release Nos. 29991

(November 26, 1991), 56 FR 61458 (order approving

OCC/CME non-proprietary XM program); 56 FR

61404 (Comm. F. T. Comm’n 1991) (order

approving OCC/CME non-proprietary XM program);

30041 (December 5, 1991) 56 FR 64824 [File Nos.

SR–OCC–90–04 and SR–ICC 90–03] (order

approving OCC/ICC non-proprietary, market

professional cross-margin program); and 56 FR

61406 (Comm. F. T. Comm’n 1991) (order

approving OCC/ICC non-proprietary cross-margin

program). In August 1993, the Commission

approved expansion of the OCC/KCC XM program

established in February of 1992 to include nonproprietary positions. Securities Exchange Act

Release No. 32708 (August 2, 1993), 58 FR 42586

[File No. SR–OCC–93–13] (order approving OCC/

KCC non-proprietary XM program).

6 7 U.S.C. § 6d(2) (1988) and 17 CFR 1.20 (1991).

7 15 U.S.C. §§ 78aaa–78lll (1988).

8 11 U.S.C. §§ 741–752 (1988).

9 11 U.S.C. §§ 761–766 (1988).

10 17 CFR 190.01–190.10.

5 U.S.C. § 552, will be available for

inspection and copying in the

Commission’s Public Reference Section,

450 Fifth Street NW., Washington, DC

20549. Copies of such filing also will be

available for inspection and copying at

the principal office of GSCC. All

submissions should refer to the file

number SR–GSCC–95–05 and should be

submitted by January 2, 1996.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–30069 Filed 12–8–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–36551; File No. SR–OCC–

95–12]

Self-Regulatory Organizations; The

Options Clearing Corporation; Notice

of Filing of a Proposed Rule Change

Amending the Agreements Governing

Non-Proprietary Cross-Margining

Accounts of Market Professionals in

the Cross-Margining Program Among

The Options Clearing Corporation

(‘‘OCC’’), the Intermarket Clearing

Corporation (‘‘ICC’’), and the Chicago

Mercantile Exchange, in the CrossMargining Program Between OCC and

ICC, and in the Cross-Margining

Program Between OCC and the Kansas

City Board of Trade Clearing

Corporation

December 4, 1995.

Pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’),1 notice is hereby given that on

August 15, 1995, The Options Clearing

Corporation (‘‘OCC’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’) the proposed rule

change (File No. SR–OCC–95–12) as

described in Items I, II, and III below,

which items have been prepared

primarily by OCC. On September 12,

1995, and on October 11, 1995, OCC

filed amendments to the proposed rule

change to include in addition to

proposed changes to the agreements

governing non-proprietary crossmargining (‘‘XM’’) accounts in the XM

program between OCC, The Intermarket

Clearing Corporation (‘‘ICC’’), and the

Chicago Mercantile Exchange (‘‘CME’’),

proposed changes to the agreements

governing non-proprietary XM accounts

in the XM program between OCC and

ICC and in the XM program between

OCC and the Kansas City Board of Trade

Clearing Corporation (‘‘KCC’’),

respectively.2 The Commission is

publishing this notice to solicit

comments on the proposed rule change

from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The purpose of the proposed rule

change is to amend the agreements

governing non-proprietary XM accounts

of market professionals in the OCC/ICC/

CME XM program, in the OCC/ICC XM

program, and in the OCC/KCC XM

program in order to implement the

revised distributional scheme adopted

by the Commodity Futures Trading

Commission (‘‘CFTC’’) in the new

appendix to the CFTC’s bankruptcy

rules.3 The proposed rule change also

seeks to revise the terms of the

agreements government the proprietary

and non-proprietary XM accounts in the

OCC/KCC XM program to conform the

terms of those agreements to the terms

currently used in the forms of

agreements in the OCC/ICC/CME XM

program and in the OCC/ICC XM

program.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

OCC included statements concerning

the purpose of and basis for the

proposed rule change and discussed any

comments it received on the proposed

rule change. The text of these statements

may be examined at the places specified

in Item IV below. OCC has prepared

summaries, set forth in sections (A), (B),

and (C) below, of the most significant

aspects of such statements.4

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

The proposed rule change seeks to

amend the agreements governing nonproprietary XM accounts of market

professionals to correspond with the

requirements of the distributional

scheme adopted by the CFTC as a new

appendix to its bankruptcy rules. The

proposed rule change also seeks to

conform the terms of the agreements

governing the proprietary and nonproprietary XM accounts in the OCC/

KCC XM program to make the terms of

those agreements substantially identical

to the terms currently used in the forms

of agreements in the OCC/ICC/CME XM

program and the OCC/ICC XM program.

In November 1991, the Commission

and the CFTC approved non-proprietary

cross-margining.5 As part of the CFTC’s

approval, it required each futures

commission merchant (‘‘FCM’’)

participating in cross-margining to agree

that all funds and property in a nonproprietary XM account would be

treated as customer property subject to

the segregation requirements of the

Commodity Exchange Act 6 and to

segregate such fund and property from

that of non-XM customers. In addition,

the CFTC required each market

professional to subordinate its XM

related claims to customer claims based

on non-XM positions.

Pursuant to that subordination

requirement, if a clearing member

became insolvent, all non-XM

customers of the FCM would be paid

their pro-rata share of the combined

segregated funds pool, including funds

of XM market professionals, before the

XM market professionals received any

portion of their claims. The

subordination was intended to insulate

non-XM customers from losses arising

from XM accounts. The subordination

also ensured that the XM accounts of

market professional would not be

treated as accounts of securities

customers subject to liquidation under

the Securities Investors Protection Act

of 1970 7 or the stock broker liquidation

provisions of the Bankruptcy Code.8

Therefore, the accounts could be

liquidated as accounts of commodity

customers under the commodity broker

liquidation provisions of the

Bankruptcy Code 9 and the CFTC’s

bankruptcy rules,10 and both the