Our Colloidal Oatmeal is USP grade and can be used as OTC ingredient if a claim is made about skin protection on the final product. The use of colloidal oatmeal as a skin protectant is regulated by the FDA according to the OTC Final Monograph for Skin Protectant Drug Products issued in 2003. The Monograph designates colloidal oatmeal Category I for the indication, "temporarily protects and helps relieve minor skin irritation and itching due to: rashes, eczema, poison ivy, oak or sumac, insect bites." Colloidal oatmeal requires a 0.007% minimum, and a 0.003% minimum in combination with mineral oil. To the best of my knowledge the FDA does not require colloidal oatmeal to be used at a certain particle size, even though its preparation is standardized by the United States Pharmacopeia (USP). There are no special formulating requirements.