11 U.S.C. § 766 — Treatment of customer property

(a) The trustee must meet margin calls for a customer’s specifically identifiable commodity contract until the trustee returns or transfers the contract. The trustee may not make a margin payment that effectively gives the customer more than the customer is entitled to under subsection (h) or (i).

(b) The trustee must prevent an open commodity contract from staying open after the last trading day or until the first day when notice of intent to deliver may be tendered, whichever comes first. For a contract still open after the last trading day, or requiring delivery under the contract market’s rules, the trustee may operate the debtor’s business to (1) accept or tender notice of intent to deliver the underlying physical commodity, (2) facilitate delivery, or (3) dispose of the commodity if a party defaults.

(c) The trustee must promptly return to a customer any specifically identifiable security, property, or commodity contract to which the customer is entitled, or transfer^* it for the customer to a commodity broker^* that is not a debtor^* under this title. This is subject to Commission rules and regulations and applies when the item’s value does not exceed the amount the customer would receive under subsection (h) or (i) if it were not returned or transferred.

(d) If the value of a specifically identifiable security, property, or commodity contract exceeds the amount the customer is entitled to under subsection (h) or (i), that customer may deposit cash equal to the difference with the trustee. The trustee must then (1) promptly return that security, property, or commodity contract to the customer, or (2) transfer it for the customer to a commodity broker that is not a debtor under this title, subject to Commission rules and regulations.

(e) Subject to subsection (b), the trustee must liquidate any commodity contract that (1) is identified to a customer who did not timely tell the trustee how to dispose of it, (2) cannot be transferred under subsection (c), or (3) cannot be identified to a particular customer.

(f) As soon as practical after the case begins, the trustee must convert to money, consistent with good market practice, all securities and other property held as estate property, other than commodity contracts, except specifically identifiable securities or property distributable under subsection (h) or (i).

(g) The trustee may not distribute a security or other property except under subsection (h) or (i).

(h) Except as subsection (b) provides, the trustee must distribute customer property proportionally among customers, based on and up to the amount of their allowed net-equity claims. Customer-property claims have priority over all other claims, except claims described in section 507(a)(2) that result from administering customer property. Distribution may be (1) cash, (2) return or transfer of specifically identifiable customer securities, property, or contracts under subsection (c) or (d), or (3) margin-call payments under subsection (a). A customer net-equity claim^* based on a proprietary account, as defined by a Commission rule, regulation, or order, may not be paid directly or indirectly from customer property unless every other customer net-equity claim has been paid in full.

(i) If the debtor is a clearing organization, the trustee must distribute:

(1) customer property other than member property proportionally to customers, based on and up to their allowed net-equity claims from accounts other than proprietary accounts, with priority over all other claims except section 507(a)(2) claims resulting from administering that customer property; and

(2) member property proportionally to customers, based on and up to their allowed net-equity claims from proprietary accounts, with priority over all other claims except section 507(a)(2) claims resulting from administering member or customer property.

(j)(1) The trustee must distribute customer property left over after distributions under subsection (h) or (i) according to section 726.

(2) Except as section 510 provides, if customer property does not fully pay a customer’s allowed net-equity claim, the unpaid part is a claim eligible for distribution under section 726.