15 U.S. Code § 687l - Issuance and guarantee of trust certificates
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.
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.
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.
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.
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.
Subsec. (f)(1). Pub. L. 104–208, § 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, § 208(h)(1)(F)(ii), inserted “or investments in obligations of the United States” after “accounts”.
Subsec. (f)(5). Pub. L. 104–208, § 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.
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.
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