Darn good question. I'll take a stab with no claims of being an expert:
I believe that once either target calls the other in sight, they are
technically under VFR separation. According to
http://www.faa.gov/ATpubs/ATC/Chp7/atc0707.html#7-7-3, the minimum
separation is 500 feet vertically. But once one or both call each other in
sight, even the 500 ft. minimum may be out the window and it's a matter of
swapping paint or not. http://www.faa.gov/ATpubs/ATC/Chp7/atc0702.html#7-2-1
explains the phraseology but this may be as far as it goes from a legal
standpoint.

The answer may be found in other regs (i.e. Part 121)

Marco Leon

"Guy Elden Jr" wrote in message
ps.com...
Marco Leon (at) wrote:
Saw this over at LiveATC.net forums. Thought it may be of interest.

I thought the controller was very professional and avoided an over the
air
arguement nicely.

Wow... I listened to the transmission and watched the replay on
passur.com, and have a question: if both planes respond to the
controller that they have the other in sight, and the controller tells
them to maintain visual separation (which it sounds like was done in
this case), does that eliminate the standard IFR separation rules? It
looks like the AA pilot was right in that the LJ came within 300 feet,
but since they were both "seeing and avoiding", is that technically an
FAR violation? i.e., was the controller still obligated to provide
separation?

--
Guy Elden Jr.