Regulation

AUTHORIZING Statutory and Regulatory Provisions

INFORMATION COLLECTION 3245-0063

SBA FORM 468: SBIC FINANCIAL REPORTS

• Section 310 of the Small Business Investment Act of 1958, codified at 15 U.S.C §687b

EXAMINATIONS AND INVESTIGATIONS:

(b) Each small business investment company shall be subject to examinations made by direction of the Investment Division of the Administration, which may be conducted with the assistance of a private sector entity that has both the qualifications to conduct and expertise in conducting such examinations, and the cost of such examinations, including the compensation of the examiners, may in the discretion of the Administration be assessed against the company examined and when so assessed shall be paid by such company. Fees collected under this subsection shall be deposited in the account for salaries and expenses of the Administration, and are authorized to be appropriated solely to cover the costs of examinations and other program oversight activities. Every such company shall make such reports to the Administration at such times and in such form as the Administration may require; except that the Administration is authorized to exempt from making such reports any such company which is registered under the Investment Company Act of 1940 to the extent necessary to avoid duplication in reporting requirements.

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(d)(C) INDEPENDENT CERTIFICATION.—

(i) IN GENERAL.—Not less than once during each fiscal year, each licensee shall submit to the Administrator the financial statements of the licensee, audited by an independent certified public accountant approved by the Administrator.

(ii) AUDIT REQUIREMENTS.—Each audit conducted under clause (i) shall include— (I) a review of the procedures and documentation used by the licensee in preparing the valuations required by this section; and

(II) a statement by the independent certified public accountant that such valuations were prepared in conformity with the valuation criteria applicable to the licensee established in accordance with paragraph (2).

• Section 311(a) of the Small Business Investment Act of 1958, codified at 15 U.S.C §687c

INJUNCTIONS AND OTHER ORDERS:

(a) Whenever, in the judgment of the Administration, a licensee or any other person

has engaged or is about to engage in any acts or practices which constitute or will constitute a

violation of any provision of this Act, or of any rule or regulation under this Act, or of any order

issued under this Act, the Administration may make application to the proper district court of the

United States or a United States court of any place subject to the jurisdiction of the United States

for an order enjoining such acts or practices, or for an order enforcing compliance with such

provision, rule, regulation, or order, and such courts shall have jurisdiction of such actions and,

upon a showing by the Administration that such licensee or other person has engaged or is about

to engage in any such acts or practices, a permanent or temporary injunction, restraining order, or

other order, shall be granted without bond.

• 13 CFR §§107.590

§107.590 Licensee's requirement to maintain active operations.

(c) Applicability of activity requirements. The activity requirements in paragraph (a) of this section do not apply if you have filed a “Wind-up Plan” approved by SBA. “Wind-up Plan” means a plan that you prepare when you decide that you will no longer make any Financings other than follow-on investments, and that you update annually when you file your SBA Form 468. The plan must contain your best estimates of the following:

(1) The remaining number of years you expect to operate.

(2) For each of your Loans and Investments, the expected liquidation date and anticipated proceeds.

(3) The timing of your repayment of obligations to SBA.

(4) The timing and amount of any planned reductions in your Management Expenses.

• 13 CFR §§107.630

§107.630 Requirement for Licensees to file financial statements with SBA (Form 468).

(a) Annual filing of Form 468. For each fiscal year, you must submit to SBA financial statements and supplementary information prepared on SBA Form 468. You must file Form 468 on or before the last day of the third month following the end of your fiscal year, except for the information required under paragraph (e) of this section, which must be filed on or before the last day of the fifth month following the end of your fiscal year.

(1) Audit of Form 468. The annual Form 468 must be audited by an independent public accountant acceptable to SBA.

(2) Insurance requirement for public accountant. Unless SBA approves otherwise, your independent public accountant must carry at least $1,000,000 of Errors and Omissions insurance, or be self-insured and have a net worth of at least $1,000,000.

(b) Interim filings of Form 468. When requested by SBA, you must file interim reports on Form 468. SBA may require you to file the entire form or only certain statements and schedules. You must file such reports on or before the last day of the month following the end of the reporting period. If you have an outstanding Leverage commitment from SBA, see the filing requirements in §107.1220.

(c) Standards for preparation of Form 468. You must prepare SBA Form 468 in accordance with SBA's Accounting Standards and Financial Reporting Requirements for Small Business Investment Companies.

(d) Where to file Form 468. Submit all filings of Form 468 to the Investment Division of SBA.

(e) Reporting of economic impact information on Form 468. Your annual filing of SBA Form 468 must include an assessment of the economic impact of each Financing, specifying the full-time equivalent jobs created or retained, and the impact of the Financing on the revenues and profits of the business and on taxes paid by the business and its employees.

• 13 CFR §§107.1220

§107.1220 Requirement for Licensee to file quarterly financial statements.

As long as any part of SBA's Leverage commitment is outstanding, you must give SBA a Financial Statement on SBA Form 468 (Short Form) as of the close of each quarter of your fiscal year (other than the fourth quarter, which is covered by your annual filing of Form 468 under § 107.630(a)). You must file this form within 30 days after the close of the quarter. You will not be eligible for a draw if you are not in compliance with this § 107.1220.