### Question
Can you define what failed member means?


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

> 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 due

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

