### Question
How is the term failed member defined?


### Answer
The term **failed member** is defined in *12 U.S.C. § 4402* as the following:

> any member that—


(A) fails to satisfy a covered clearing obligation when due,


(B) has commenced or had commenced against it insolvency, liquidation, reorganization, receivership (including the appointment of a receiver), conservatorship, or similar proceedings, or


(C) has generally ceased to meet its obligations when dud

#### Citation:
  - *12 U.S.C. § 4402*
  - Heading: **CHAPTER 45-PAYMENT SYSTEM RISK REDUCTION > SUBCHAPTER I-BILATERAL AND CLEARING ORGANIZATION NETTING**

