
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 15USC687l]

 
                      TITLE 15--COMMERCE AND TRADE
 
             CHAPTER 14B--SMALL BUSINESS INVESTMENT PROGRAM
 
              SUBCHAPTER III--INVESTMENT DIVISION PROGRAMS
 
               Part A--Small Business Investment Companies
 
Sec. 687l. Issuance and guarantee of trust certificates


(a) Issuance; debentures or participating securities composing trust or 
        pool

    The Administration is authorized to issue trust certificates 
representing ownership of all or a fractional part of debentures issued 
by small business investment companies and guaranteed by the 
Administration under this chapter, or participating securities which are 
issued by such companies and purchased and guaranteed pursuant to 
section 683(g) of this title: Provided, That such trust certificates 
shall be based on and backed by a trust or pool approved by the 
Administration and composed solely of guaranteed debentures or 
guaranteed participating securities.

(b) Terms and conditions of guarantee; payment of principal and interest

    The Administration is authorized, upon such terms and conditions as 
are deemed appropriate, to guarantee the timely payment of the principal 
of and interest on trust certificates issued by the Administration or 
its agent for purposes of this section. Such guarantee shall be limited 
to the extent of principal and interest on the guaranteed debentures or 
the redemption price of and priority payments on the participating 
securities, which compose the trust or pool. In the event that a 
debenture in such trust or pool is prepaid, or participating securities 
are redeemed, either voluntarily or involuntarily, or in the event of 
default of a debenture or voluntary or involuntary redemption of a 
participating security, the guarantee of timely payment of principal and 
interest on the trust certificates shall be reduced in proportion to the 
amount of principal and interest such prepaid debenture or redeemed 
participating security and priority payments represent in the trust or 
pool. Interest on prepaid or defaulted debentures, or priority payments 
on participating securities, shall accrue and be guaranteed by the 
Administration only through the date of payment on the guarantee. During 
the term of the trust certificate, it may be called for redemption due 
to prepayment or default of all debentures or redemption, whether 
voluntary or involuntary, of all participating securities residing in 
the pool.

(c) Full faith and credit of United States

    The full faith and credit of the United States is pledged to the 
payment of all amounts which may be required to be paid under any 
guarantee of such trust certificates issued by the Administration or its 
agent pursuant to this section.

(d) Collection of fees

    The Administration shall not collect a fee for any guarantee under 
this section: Provided, That nothing herein shall preclude any agent of 
the Administration from collecting a fee approved by the Administration 
for the functions described in subsection (f)(2) of this section.

(e) Subrogation rights; ownership rights in debentures or participating 
        securities

    (1) In the event the Administration pays a claim under a guarantee 
issued under this section, it shall be subrogated fully to the rights 
satisfied by such payment.
    (2) No State or local law, and no Federal law, shall preclude or 
limit the exercise by the Administration of its ownership rights in the 
debentures or participating securities residing in a trust or pool 
against which trust certificates are issued.

(f) Central registration requirements; regulation of brokers and dealers

    (1) The Administration shall provide for a central registration of 
all trust certificates sold pursuant to this section.
    (2) The Administrator shall contract with an agent or agents to 
carry out on behalf of the Administration the pooling and the central 
registration functions of this section including, notwithstanding any 
other provision of law, maintenance on behalf of and under the direction 
of the Administration, such commercial bank accounts or investments in 
obligations of the United States as may be necessary to facilitate 
trusts or pools backed by debentures or participating securities 
guaranteed under this chapter, and the issuance of trust certificates to 
facilitate such poolings. Such agent or agents shall provide a fidelity 
bond or insurance in such amounts as the Administration determines to be 
necessary to fully protect the interests of the Government.
    (3) Prior to any sale, the Administrator shall require the seller to 
disclose to a purchaser of a trust certificate issued pursuant to this 
section, information on the terms, conditions, and yield of such 
instrument.
    (4) The Administrator is authorized to regulate brokers and dealers 
in trust certificates sold pursuant to this section.
    (5) Nothing in this subsection shall prohibit the use of a book-
entry or other electronic form of registration for trust certificates.

(Pub. L. 85-699, title III, Sec. 319, formerly Sec. 321, as added Pub. 
L. 99-272, title XVIII, Sec. 18005(a), Apr. 7, 1986, 100 Stat. 364; 
amended Pub. L. 101-162, title V, (5), Nov. 21, 1989, 103 Stat. 1028; 
Pub. L. 102-366, title IV, Sec. 404, Sept. 4, 1992, 106 Stat. 1013; 
renumbered Sec. 319 and amended Pub. L. 104-208, div. D, title II, 
Secs. 205(b), 208(h)(1)(E), (F), Sept. 30, 1996, 110 Stat. 3009-738, 
3009-747.)

                       References in Text

    For definition of ``this chapter'', referred to in subsecs. (a) and 
(f)(2), see References in Text note set out under section 661 of this 
title.


                            Prior Provisions

    A prior section 319 of Pub. L. 85-699, which amended section 80a-18 
of this title, was renumbered section 317.


                               Amendments

    1996--Subsec. (a). Pub. L. 104-208, Sec. 208(h)(1)(F)(i), struck out 
``, including companies operating under the authority of section 681(d) 
of this title,'' after ``investment companies''.
    Subsec. (f)(1). Pub. L. 104-208, Sec. 205(b)(1), struck out at end 
``Such central registration shall include with respect to each sale--
        ``(A) identification of each small business investment company;
        ``(B) the interest rate or prioritized payment rate paid by the 
    small business investment company;
        ``(C) commissions, fees, or discounts paid to brokers and 
    dealers in trust certificates;
        ``(D) identification of each purchaser of the trust certificate;
        ``(E) the price paid by the purchaser for the trust certificate;
        ``(F) the interest rate on the trust certificate;
        ``(G) the fee of any agent for carrying out the functions 
    described in paragraph (2); and
        ``(H) such other information as the Administration deems 
    appropriate.''
    Subsec. (f)(2). Pub. L. 104-208, Sec. 208(h)(1)(F)(ii), inserted 
``or investments in obligations of the United States'' after 
``accounts''.
    Subsec. (f)(5). Pub. L. 104-208, Sec. 205(b)(2), added par. (5).
    1992--Pub. L. 102-366 amended section generally, in subsec. (a) 
authorizing issuance of trust certificates representing ownership of 
participating securities, in subsec. (b) inserting provisions 
authorizing Administration to guarantee payment of redemption price of 
and priority payments on participating securities, in subsec. (e)(2) 
including participating securities within prohibition against preclusion 
or limitation of Administration's ownership rights, and in subsec. (f) 
in par. (1) substituting provisions relating to small business 
investment company for provisions relating to development company and 
requiring prioritized payment rate to be included in central 
registration requirements, and in par. (2) inserting provisions relating 
to participating securities, contracts to carry out pooling, and 
maintenance of commercial bank accounts.
    1989--Subsec. (a). Pub. L. 101-162 inserted ``, including companies 
operating under the authority of section 681(d) of this title,'' after 
``investment companies''.


                    Effective Date of 1996 Amendment

    Amendment by section 205 of Pub. L. 104-208 effective Oct. 1, 1996, 
see section 3 of Pub. L. 104-208, set out as a note under section 633 of 
this title.
    Amendment by section 208 of Pub. L. 104-208 effective Sept. 30, 
1996, see section 208(j) of Pub. L. 104-208, set out as a note under 
section 634 of this title.


                               Regulations

    Section 18005(b) of Pub. L. 99-272 provided that:
    ``(1) Notwithstanding any law, rule, or regulation, within 60 days 
after the date of the enactment of this Act [Apr. 7, 1986], the Small 
Business Administration shall develop and promulgate final rules and 
regulations to implement the central registration provisions provided 
for in section 321(f)(1) of the Small Business Investment Act [15 U.S.C. 
687l(f)(1)], and shall contract with an agent for an initial period of 
not to exceed two years to carry out the functions provided for in 
sections 321(f)(2) and 321(f)(3) of such Act.
    ``(2) Notwithstanding any law, rule, or regulation, within 60 days 
after the date of the enactment of this Act [Apr. 7, 1986], the Small 
Business Administration also shall consult with representatives of 
appropriate Federal and State agencies and officials, the securities 
industry, financial institutions and lenders, and small business 
persons, and shall develop and promulgate final rules and regulations to 
implement sections 504 and 505 [section 321; 15 U.S.C. 687l] of the 
Small Business Investment Act.''


 Effect of Small Business Equity Enhancement Act of 1992 on Securities 
                                  Laws

    Nothing in amendment by Pub. L. 102-366 to be construed to affect 
applicability of securities laws or to otherwise supersede or limit 
jurisdiction of Securities and Exchange Commission, see section 418 of 
Pub. L. 102-366, set out as a note under section 661 of this title.

                  Section Referred to in Other Sections

    This section is referred to in section 687m of this title.
