§ 697b. — Pooling of debentures.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC697b]
TITLE 15--COMMERCE AND TRADE
CHAPTER 14B--SMALL BUSINESS INVESTMENT PROGRAM
SUBCHAPTER V--LOANS TO STATE AND LOCAL DEVELOPMENT COMPANIES
Sec. 697b. Pooling of debentures
(a) Issuance; debentures composing trust or pool
The Administration is authorized to issue trust certificates
representing ownership of all or a fractional part of debentures issued
by State or local development companies and guaranteed by the
Administration under this chapter: 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.
(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
which compose the trust or pool. In the event that a debenture in such
trust or pool is prepaid, either voluntarily or in the event of default,
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 represents in the trust or pool.
Interest on prepaid or defaulted debentures 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
constituting 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 any 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
(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 constituting the trust or pool against which the trust
certificates are issued.
(f) Central registration requirements; regulation of brokers and
dealers; electronic registration
(1) The Administration shall--
(A) provide for a central registration of all trust certificates
sold pursuant to this section;
(B) contract with an agent to carry out on behalf of the
Administration the central registration functions of this section
and the issuance of trust certificates to facilitate poolings; such
agent 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;
(C) prior to any sale, 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;
and
(D) have the authority to regulate brokers and dealers in trust
certificates sold pursuant to this section.
(2) Nothing in this subsection shall prohibit the utilization of a
book-entry or other electronic form of registration for trust
certificates.
(Pub. L. 85-699, title V, Sec. 505, as added Pub. L. 99-272, title
XVIII, Sec. 18008(c), Apr. 7, 1986, 100 Stat. 367; amended Pub. L. 100-
590, title I, Sec. 111(d)(1), (2), Nov. 3, 1988, 102 Stat. 2995; Pub. L.
104-208, div. D, title II, Sec. 205(c), Sept. 30, 1996, 110 Stat. 3009-
738.)
References in Text
For definition of ``this chapter'', referred to in subsec. (a), see
References in Text note set out under section 661 of this title.
Amendments
1996--Subsec. (f). Pub. L. 104-208 designated existing provisions as
par. (1), redesignated former pars. (1) to (4) as subpars. (A) to (D),
respectively, of par. (1), in subpar. (A) substituted ``provide for a
central registration of all trust certificates sold pursuant to this
section;'' for ``provide for a central registration of all trust
certificates sold pursuant to this section; such central registration
shall include with respect to each sale, identification of each
development company; the interest rate paid by the development company;
commissions, fees, or discounts paid to brokers and dealers in trust
certificates; identification of each purchaser of the trust certificate;
the price paid by the purchaser for the trust certificate; the interest
rate paid on the trust certificate; the fees of any agent for carrying
out the functions described in paragraph (2); and such other information
as the Administration deems appropriate;'', and added par. (2).
1988--Pub. L. 100-590, Sec. 111(d)(2), inserted ``Pooling of
debentures'' as section catchline.
Subsec. (a). Pub. L. 100-590, Sec. 111(d)(1), substituted ``all or
a'' for ``all of a''.
Effective Date of 1996 Amendment
Amendment by 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.
Rules and Regulations for Implementation of Central Registration, Pilot
Program and Trust Certificate Provisions; Consultation
Section 18008(d) of Pub. L. 99-272 provided that:
``(1) Notwithstanding any law, rule, or regulation, within 60 days
after the date of 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 505(f)(1) of the Small Business Investment Act [15 U.S.C.
697b(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
section 505(f)(2) of such Act.
``(2) Notwithstanding any law, rule or regulation, within 60 days
after the date of 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 of the Small Business Investment Act [15
U.S.C. 697a, 697b].''
Section Referred to in Other Sections
This section is referred to in section 697f of this title.
