United States Code (Last Updated: May 24, 2014) |
Title 11. BANKRUPTCY |
Chapter 7. LIQUIDATION |
SubChapter III. STOCKBROKER LIQUIDATION |
§ 745. Treatment of accounts
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(a) Accounts held by the debtor for a particular customer in separate capacities shall be treated as accounts of separate customers. (b) If a stockbroker or a bank holds a customer net equity claim against the debtor that arose out of a transaction for a customer of such stockbroker or bank, each such customer of such stockbroker or bank shall be treated as a separate customer of the debtor. (c) Each trustee’s account specified as such on the debtor’s books, and supported by a trust deed filed with, and qualified as such by, the Internal Revenue Service, and under the Internal Revenue Code of 1986, shall be treated as a separate customer account for each beneficiary under such trustee account.
Historical And Revision
Miscellaneous
Section 745(a) indicates that each account held by a customer in a separate capacity is to be considered a separate account. This prevents the offset of accounts held in different capacities.
Subsection (b) indicates that a bank or another stockbroker that is a customer of a debtor is considered to hold its customers accounts in separate capacities. Thus a bank or other stockbroker is not treated as a mutual fund for purposes of bulk investment. This protects unrelated customers of a bank or other stockholder from having their accounts offset.
Subsection (c) effects the same result with respect to a trust so that each beneficiary is treated as the customer of the debtor rather than the trust itself. This eliminates any doubt whether a trustee holds a personal account in a separate capacity from his trustee’s account.
References In Text
The Internal Revenue Code of 1986, referred to in subsec. (c), is classified generally to Title 26, Internal Revenue Code.
Amendments
1994—Subsec. (c). Pub. L. 103–394 substituted “Internal Revenue Code of 1986” for “Internal Revenue Code of 1954 (26 U.S.C. 1 et seq.)”.
1984—Subsec. (a). Pub. L. 98–353 inserted “the debtor for” after “by”.
1982—Subsec. (c). Pub. L. 97–222 substituted “Each” for “A”.
Effective Date Of Amendment
Amendment by Pub. L. 103–394 effective
Amendment by Pub. L. 98–353 effective with respect to cases filed 90 days after