,,ii #aai? ,,congress #a/ ,session ,s4 #afde ,,9 ,,! ,,s5ate ,,( ,,! ,,unit$ ,,/ates ,may #g1 #bjbe ,mr4 ,van ,holl5 7= himself1 ,mr4 ,moran1 ,ms4 ,baldw91 ,mr4 ,"y1 ,mrs4 ,%ahe51 ,mr4 ,s*mitt1 & ,mr4 ,wel*7 introduc$ ! foll[+ bill2 :i* 0 read twice & ref]r$ to ! ,committee on ,f9ance ,a ,,bill ,to e/abli% a dome/ic own]%ip inve/m5t facility1 & = o!r purposes4 #a4 ,%ort title ,?is ,act may be cit$ z ! ,am]ican ,own]%ip & ,resili5ce ,act4 #b4 ,def9itions ,9 ?is ,act3 7#a7 #aidj ,act ,company ,! t]m #aidj ,act ,company means an inve/m5t company subject to regi/ration "u ! ,inve/m5t ,company ,act ( #aidj 7#ae ,u4,s4,c4 #hj;a-#a et seq474 7#b7 #aihj ,act ,company ,! t]m #aihj ,act ,company means an inve/m5t company subject to regi/ration "u ! ,small ,bus9ess ,inve/m5t ,inc5tive ,act ( #aihj 7#ae ,u4,s4,c4 #hj;a-#ea et seq474 7#c7 ,articles ,! t]m articles means-- 7,a7 articles ( incorporation = an incorporat$ body2 or 7,b7 ! functional equival5t or o!r simil> docum5ts specifi$ by ! ,secret>y = o!r bus9ess entities4 7#d7 ,capital int]e/ ,! t]m capital int]e/ means an int]e/ 9 a subsidi>y ,,llc det]m9$ at ! "t ( receipt t gives ! hold] ( ! int]e/ a %>e ( ! proce$s 9 a complete liquidation ( ! subsidi>y ,,llc if ! assets ( ! subsidi>y ,,llc are sold at fair m>ket value4 7#e7 ,cov]$ bus9ess conc]n ,! t]m cov]$ bus9ess conc]n means an ent]prise1 reg>dless ( any size /&>d1 t is indep5d5tly own$ & op]at$1 except t an inve/m5t by a v5ture capital firm1 inve/m5t company1 employee welf>e b5efit plan or p5sion plan1 or tru/1 f\ndation1 or end[m5t t is exempt f ,f$]al income taxation %all n cause a bus9ess conc]n to be deem$ n indep5d5tly own$ & op]at$ reg>dless ( ! allocation ( control dur+ ! inve/m5t p]iod "u any inve/m5t agreem5t betwe5 ! bus9ess conc]n & ! entity mak+ ! inve/m5t4 7#f7 ,cov]$ inve/m5t ,! t]m cov]$ inve/m5t means1 ) respect to an inve/m5t 9 a cov]$ bus9ess conc]n-- 7,a7 ! provision ( capital to f9ance ! sale ( an own]%ip int]e/ ( a cov]$ bus9ess conc]n1 includ+ a cov]$ bus9ess conc]n creat$ z a result ( a corporate dive/iture1 to an employee /ock own]%ip plan or eligible work]-own$ coop]ative if su* sale results 9-- 7i7 ! employee /ock own]%ip plan or eligible work]-own$ coop]ative1 respectively1 hold+ a majority int]e/ ( ! out/&+ /ock ( ! cov]$ bus9ess conc]n2 & 7ii7 ) respect to su* a sale to an employee /ock own]%ip plan1 ! appo9tm5t ( an indep5d5t tru/ee = ! transaction2 or 7,b7 ! provision ( capital to f9ance a cov]$ bus9ess conc]n if-- 7i7 an employee /ock own]%ip plan or eligible work]-own$ coop]ative holds a majority int]e/ ( ! out/&+ /ock ( ! cov]$ bus9ess conc]n1 prior to & imm$iately foll[+ ! provision ( capital2 & 7ii7 ! provision ( capital does n r$uce ! p]c5tage ( /ock ( ! cov]$ bus9ess conc]n held by ! employee /ock own]%ip plan or eligible work]-own$ coop]ative 7z applicable71 exclud+ any syn!tic equity4 7#g7 ,dep>tm5t ,! t]m ,dep>tm5t means ! ,dep>tm5t ( ,comm]ce4 7#h7 ,eligible work]-own$ coop]ative ,! t]m eligible work]-own$ coop]ative has ! mean+ giv5 t t]m 9 section #ajdb7;c7 ( ! ,int]nal ,rev5ue ,code ( #aihf4 7#i7 ,employee /ock own]%ip plan ,! t]m employee /ock own]%ip plan has ! mean+ giv5 t t]m 9 section #dige7;e7 ( ! ,int]nal ,rev5ue ,code ( #aihf4 7#aj7 ,employee welf>e b5efit plan2 p5sion plan ,! t]ms employee welf>e b5efit plan & p5sion plan-- 7,a7 h ! mean+s giv5 ^? t]ms 9 section #c ( ! ,employee ,retirem5t ,income ,security ,act ( #aigd 7#bi ,u4,s4,c4 #ajjb72 & 7,b7 include-- 7i7 public & private p5sion or retirem5t plans subject to su* ,act2 & 7ii7 simil> plans n cov]$ by su* ,act t h be5 e/abli%$ & t are ma9ta9$ by ! ,f$]al ,gov]nm5t or any ,/ate or political subdivision1 or any ag5cy or in/rum5tality !re(1 = ! b5efit ( employees4 7#aa7 ,indep5d5t f9ancial advisor ,! t]m indep5d5t f9ancial advisor means a f9ancial or valuation advisor t-- 7,a7 is 9 ! pr(ession ( s]v+ z a f9ancial or valuation advisor = transactions involv+ employee /ock own]%ip plans2 7,b7 has nev]-- 7i7 p]=m$ s]vices1 includ+ a prelim9>y valuation1 = or on behalf (-- 7,i7 any p>ty sell+ an own]%ip int]e/ 9 ! cov]$ bus9ess conc]n to ! employee /ock own]%ip plan involv$ 9 ! transaction t ! advisor is evaluat+2 or 7,,ii7 ! cov]$ bus9ess conc]n1 unless ! s]vices 7 provid$ solely to an exi/+ employee /ock own]%ip plan sponsor$ by ! cov]$ bus9ess conc]n2 or 7ii7 be5 a director1 (fic]1 or employee ( ! cov]$ bus9ess conc]n2 7,c7 has n p]=m$ s]vices relat$ to ! transaction ! advisor is evaluat+1 includ+ a prelim9>y valuation1 = or on behalf (-- 7i7 ! own]%ip inve/m5t company t is prep>+ to or has already allocat$ capital to ! cov]$ bus9ess conc]n2 or 7ii7 any o!r entity t is /ructur+ or f9anc+ ! transaction = any p>ty o!r ?an ! employee /ock own]%ip plan2 & 7,d7 does n h a familial or corporate relation%ip 7su* z a p>5t-subsidi>y relation%ip7 to any ( p]son or entity describ$ 9 subp>agraph 7,b7 or 7,c74 7#ab7 ,indep5d5t tru/ee ,! t]m indep5d5t tru/ee means a tru/ee t-- 7,a7 is 9 ! pr(ession ( s]v+ z a fiduci>y = employee /ock own]%ip plans2 7,b7 has nev]-- 7i7 p]=m$ s]vices = or on behalf ( any p>ty sell+ an own]%ip int]e/ 9 ! cov]$ bus9ess conc]n to ! employee /ock own]%ip plan involv$ 9 ! transaction t ! tru/ee is consid]+2 or 7ii7 be5 a director1 (fic]1 or employee ( ! cov]$ bus9ess conc]n2 7,c7 has n p]=m$ s]vices = or on behalf ( ! cov]$ bus9ess conc]n at any "t dur+ ! #e-ye> p]iod end+ on ! date ( execution ( ! transaction ! tru/ee is consid]+1 unless su* s]vices solely consi/$ ( act+ z a fiduci>y ( an employee b5efit plan 7includ+ an employee /ock own]%ip plan7 "u ! ,employee ,retirem5t ,income ,security ,act ( #aigd 7#bi ,u4,s4,c4 #ajja et seq472 7,d7 has n p]=m$ s]vices relat$ to ! transaction ! tru/ee is consid]+1 = or on behalf (-- 7i7 ! own]%ip inve/m5t company t is prep>+ to or has already allocat$ capital to ! cov]$ bus9ess conc]n2 or 7ii7 any o!r entity t is /ructur+ or f9anc+ ! transaction = any p>ty o!r ?an ! employee /ock own]%ip plan2 & 7,e7 does n h a familial or corporate relation%ip 7su* z a p>5t-subsidi>y relation%ip7 to any p]son or entity describ$ 9 subp>agraph 7,b71 7,c71 or 7,d74 7#ac7 ,lev]age ,! t]m lev]age means deb5tures gu>ante$ by ! ,dep>tm5t4 7#ad7 ,lic5se ,! t]m lic5se means a lic5se issu$ by ! ,dep>tm5t z provid$ 9 section #d7;c74 7#ae7 ,lic5see ,! t]m lic5see means a company approv$ by ! ,secret>y to op]ate "u ! provisions ( ?is ,act & issu$ a lic5se provid$ 9 section #d7;c74 7#af7 ,limit$ liability company ,! t]m limit$ liability company means a bus9ess entity t is organiz$ & op]at+ 9 accordance ) a ,/ate limit$ liability company /atute approv$ by ! ,dep>tm5t4 7#ag7 ,memb] ,! t]m memb] means1 ) respect to a lic5see t is a limit$ liability company1 a hold] ( an own]%ip int]e/ or a p]son o!rwise admitt$ to memb]%ip 9 ! limit$ liability company4 7#ah7 ,non-lev]ag$ lic5see ,! t]m non-lev]ag$ lic5see means a lic5see t-- 7,a7 has no out/&+ lev]age or lev]age commitm5t2 & 7,b7 c]tifies to ! ,dep>tm5t 9 writ+ t ! lic5see w n seek lev]age 9 ! future4 7#ai7 ,out/&+ /ock ,! t]m out/&+ /ock means %>es ( /ock1 includ+ syn!tic equity4 7#bj7 ,own]%ip inve/m5t company ,! t]m own]%ip inve/m5t company means-- 7,a7 a company approv$ by ! ,secret>y to op]ate "u ! provisions ( ?is ,act & issu$ a lic5se z provid$ 9 section #d7;c72 & 7,b7 = :i*-- 7i7 #ajj p]c5t ( ! total capital manag$ by ! inve/m5t firm %all be inve/$ 9 cov]$ inve/m5ts2 7ii7 n less ?an #ej p]c5t ( ! total capital manag$ by ! inve/m5t firm %all be inve/$ 9 cov]$ inve/m5ts describ$ 9 p>agraph 7#f77;,a72 & 7iii7 cov]$ inve/m5t returns are obta9$ f debt1 syn!tic equity1 pref]r$ /ock1 equity1 or a comb9ation !re(1 includ+ returns obta9$ f ca% int]e/1 paym5t-9-k9d int]e/1 & /ock w>rants4 7#ba7 ,pref]r$ /ock ,! t]m pref]r$ /ock has ! mean+ giv5 t t]m 9 section #cea7;g77#c7 ( ! ,int]nal ,rev5ue ,code ( #aihf4 7#bb7 ,private capital ,! t]m private capital-- 7,a7 means ! sum (-- 7i7 ! paid-9 capital & paid-9 surplus ( a corporate lic5see1 ! contribut$ capital ( ! p>tn]s ( a p>tn]%ip lic5see1 or ! equity inve/m5t ( ! memb]s ( a limit$ liability company lic5see2 & 7ii7 unfund$ b9d+ commitm5ts1 f inve/ors t meet crit]ia e/abli%$ by ! ,secret>y1 to contribute capital to ! lic5see1 provid$ t su* unfund$ commitm5ts may be c\nt$ z private capital = purposes ( approval by ! ,secret>y ( any reque/ = lev]age1 b lev]age %all n be fund$ bas$ on su* commitm5ts2 & 7,b7 does n include any-- 7i7 funds borr[$ by a lic5see f any s\rce2 7ii7 funds obta9$ ?r\gh ! issuance ( lev]age2 or 7iii7 funds obta9$ directly or indirectly f any ,f$]al1 ,/ate1 or local gov]nm5t1 or any gov]nm5t ag5cy or in/rum5tality1 except =-- 7,i7 funds obta9$ f ! bus9ess rev5ues 7exclud+ any gov]nm5tal appropriation7 ( any f$]ally *>t]$ or gov]nm5t-sponsor$ corporation e/abli%$ be=e ,octob] #a1 #aihg2 7,,ii7 funds inve/$ by an employee welf>e b5efit plan or p5sion plan2 & 7,,iii7 any qualifi$ nonprivate funds 7if ! inve/ors ( ! qualifi$ nonprivate funds d n control1 directly or indirectly1 ! managem5t1 bo>d ( directors1 g5]al p>tn]s1 or memb]s ( ! lic5see74 7#bc7 ,pr(its int]e/ ,! t]m pr(its int]e/s means an int]e/ 9 a subsidi>y ,,llc o!r ?an a capital int]e/4 7#bd7 ,protg ,,oic ,! t]m ,protg ,,oic means an entity lic5s$ "u section #d7;c7 z an own]%ip inve/m5t company & select$ 9 accordance ) section #f-- 7,a7 = :i* ! manag]s ( ! firm h a docum5t$ record ( successful bus9ess exp]i5ce2 & 7,b7 t has an inve/m5t track record t does n meet ! requirem5ts "u section #d7;c77#c77;,b77i74 7#be7 ,secret>y ,! t]m ,secret>y means ! ,secret>y ( ,comm]ce4 7#bf7 ,/ate ,! t]m ,/ate includes ! sev]al ,/ates1 ! t]ritories & possessions ( ! ,unit$ ,/ates1 ! ,commonweal? ( ,pu]to ,rico1 & ! ,di/rict ( ,columbia4 7#bg7 ,subsidi>y ,,llc ,! t]m subsidi>y ,,llc means a limit$ liability company own$ by a corporation ?r\gh equity own]%ip ( ! subsidi>y ) a common p>5t corporation1 z describ$ 9 section #aefc ( ! ,int]nal ,rev5ue ,code ( #aihf1 9 :i*-- 7,a7 ! equity ( ! subsidi>y ,,llc own$ by ! corporation possesses n less ?an #hj p]c5t ( ! total comb9$ vot+ p[] ( all classes ( equity ( ! subsidi>y ,,llc entitl$ to vote2 & 7,b7 ! equity value ( ! subsidi>y ,,llc own$ by ! corporation t repres5ts-- 7i7 n less ?an #ea p]c5t ( ! total value ( all classes ( equity ( ! subsidi>y ,,llc2 & 7ii7 n less ?an #ea p]c5t equity own]%ip ( ! subsidi>y ,,llc4 7#bh7 ,syn!tic equity ,! t]m syn!tic equity includes-- 7,a7 syn!tic equity1 z def9$ 9 section #dji7p77#f7 ( ! ,int]nal ,rev5ue ,code ( #aihf2 7,b7 a pr(its int]e/ ( a subsidi>y ,,llc grant$ to1 pur*as$ by1 or o!rwise obta9$ directly or indirectly by employees & directors ( ! subsidi>y ,,llc2 & 7,c7 nonqualifi$ def]r$ comp5sation plans & arrangem5ts subject to section #dji;,a ( ! ,int]nal ,rev5ue ,code ( #aihf4 7#bi7 ,?ird p>ty debt ,! t]m ?ird p>ty debt means any indebt$ness = borr[$ money1 o!r ?an indebt$ness ow$ to ! ,dep>tm5t4 #c4 ,own]%ip inve/m5t facility 7a7 ,def9ition ( facility ,9 ?is section1 ! t]m facility means ! facility e/abli%$ "u subsection 7b74 7b7 ,e/abli%m5t ,! ,secret>y %all e/abli% & c>ry out a facility to provide lev]age to lic5s$ own]%ip inve/m5t companies = ! purpose ( enc\rag+ cov]$ inve/m5ts4 7c7 ,comb9$ lev]age ,! ,secret>y may n provide lev]age to own]%ip inve/m5t companies "u ! facility 9 a total am\nt t is great] ?an #e1jjj1jjj1jjj = a fiscal ye>4 ,n m ?an #bj p]c5t ( su* total am\nt may be provid$ to ,protg ,,oic companies = a fiscal ye>4 7d7 ,transaction requirem5ts 7#a7 ,9 g5]al ,) respect to a cov]$ inve/m5t describ$ 9 section #b7f77;,a7 involv+ a sale to an employee /ock own]%ip plan1 an indep5d5t tru/ee = ! employee /ock own]%ip plan %all be appo9t$ by ! cov]$ bus9ess conc]n be=e ! execution ( ! cov]$ inve/m5t = a p]iod ( "t t is suffici5t = ! indep5d5t tru/ee to fully evaluate ! propos$ transaction4 7#b7 ,fairness op9ion ,) respect to ! scope ( appo9tm5t "u p>agraph 7#a71 an indep5d5t tru/ee appo9t$ "u p>agraph 7#a7 %all obta9 a fairness op9ion on ! propos$ cov]$ inve/m5t f an indep5d5t f9ancial advisor1 :i* %all evaluate :e!r ! price1 t]ms1 & co/ ( f9anc+ ( ! propos$ cov]$ inve/m5t are f9ancially fair to ! employee /ock own]%ip plan4 7e7 ,prohibitions 7#a7 ,f9anc+ 7,a7 ,9 g5]al ,an employee ( a cov]$ bus9ess conc]n may n provide p]sonal f9anc+ ( any k9d = a cov]$ inve/m5t1 includ+ ?r\gh a wage concession or rollov] ( a retirem5t plan4 7,b7 ,exceptions ,subp>agraph 7,a7 %all n apply to-- 7i7 f9anc+ provid$ by an employee = ! sale ( an own]%ip int]e/ held by ! employee 9 a cov]$ bus9ess conc]n2 or 7ii7 employee capital contributions or memb]%ip fees paid by memb]s ( an eligible work]-own$ coop]ative1 if su* am\nts are reasonable & cu/om>y & n us$ = ! pur*ase ( ! cov]$ bus9ess conc]n4 7#b7 ,control ,an own]%ip inve/m5t company %all n ex]cise control ov] a cov]$ bus9ess conc]n 9 :i* ! own]%ip inve/m5t company has made a cov]$ inve/m5t4 7f7 ,employee allocations ,) respect to a cov]$ inve/m5t describ$ 9 section #b7f77;,a7 made by an own]%ip inve/m5t company t involves an employee /ock own]%ip plan1 ! employee /ock own]%ip plan %all include a requirem5t t 9 ! ev5t ( a sale to a ?ird p>ty ( ! cov]$ bus9ess conc]n 9 :i* ! cov]$ inve/m5t is made1 ! proce$s t ! employee /ock own]%ip plan receives f ! sale %all be di/ribut$ z ?\gh all %>es ( /ock held by ! employee /ock own]%ip plan prior to ! sale 7 fully allocat$ bas$ on ea* p>ticipant's comp5sation1 z def9$ "u section #dae7;c77#c7 ( ! ,int]nal ,rev5ue ,code ( #aihf4 7g7 ,recirculation ( %>es 7#a7 ,%>e c\nt ,) respect to a cov]$ inve/m5t describ$ 9 section #b7f77;,a7 made by an own]%ip inve/m5t company t involves an employee /ock own]%ip plan1 ! numb] ( %>es held by ! employee /ock own]%ip plan on ! f9al date ( ea* plan ye> %all n be less ?an ! numb] ( %>es held by ! employee /ock own]%ip plan on ! execution date ( ! cov]$ inve/m5t4 7#b7 ,limitation ,! requirem5ts "u p>agraph 7#a7 %all apply only ) respect to ! p]iod dur+ :i* ! own]%ip inve/m5t company has an int]e/ 9 ! cov]$ bus9ess conc]n4 7#c7 ,exception ,! requirem5t "u p>agraph 7#a7 may be waiv$ by ! indep5d5t tru/ee = ! applicable employee /ock own]%ip plan4 7h7 ,indep5d5t tru/ees ,) respect to a cov]$ inve/m5t describ$ 9 section #b7f77;,a7 made by an own]%ip inve/m5t company t involves an employee /ock own]%ip plan1 ! employee /ock own]%ip plan %all h an indep5d5t tru/ee dur+ ! p]iod t ! own]%ip inve/m5t company has an int]e/ 9 ! cov]$ bus9ess conc]n4 7i7 ,subsidi>y ,l,l,cs ,) respect to any cov]$ inve/m5t made by an own]%ip inve/m5t company t involves an employee /ock own]%ip plan1 a subsidi>y ,,llc may be p]mitt$ to be e/abli%$1 provid$ t ! foll[+ requirem5ts are met3 7#a7 ,,esop majority int]e/ ,! employee /ock own]%ip plan ex]cises a majority int]e/ 9 ! subsidi>y ,,llc z a result ( ! sale or provision ( capital4 7#b7 ,s corporation bo>d gov]nance ,! bo>d gov]nance ( ! subsidi>y ,,llc resides exclusively at ! level ( ! ,s corporation by :i* ! subsidi>y ,,llc is own$4 7#c7 ,pr(its int]e/ ,! pr(its int]e/ or any type ( simil> arrangem5ts1 includ+ phantom /ock & any def]r$ bonus plan relat$ to equity 9 ! subsidi>y ,,llc1 complies ) section #dji7p7 ( ! ,int]nal ,rev5ue ,code ( #aihf4 7#d7 ,ev5t protection ,! requirem5ts ( subsection 7f7 apply at ! level ( ! subsidi>y ,,llc4 7j7 ,proc$ures relat$ to a sale ( a cov]$ bus9ess conc]n 7#a7 ,9 g5]al ,subject to p>agraph 7#b71 an own]%ip inve/m5t company %all require z a condition ( mak+ a cov]$ inve/m5t describ$ 9 section #b7f77;,a7 involv+ an employee /ock own]%ip plan t-- 7,a7 be=e any /ock sale or ! execution ( any corporate matt] li/$ 9 section #dji7;e77#c7 ( ! ,int]nal ,rev5ue ,code ( #aihf1 ! employee /ock own]%ip plan %all-- 7i7 appo9t an indep5d5t tru/ee = ! transaction2 & 7ii7 require t ! indep5d5t tru/ee obta9 a fairness op9ion f an indep5d5t f9ancial advisor1 :i* %all evaluate :e!r ! price1 t]ms1 & co/ ( f9anc+ ( ! propos$ cov]$ inve/m5t are f9ancially fair to ! employee /ock own]%ip plan2 & 7,b7 ! employee /ock own]%ip plan requires t-- 7i7 9 addition to ! corporate matt]s li/$ 9 section #dji7;e77#c7 ( ! ,int]nal ,rev5ue ,code ( #aihf1 ea* p>ticipant or b5efici>y 9 ! employee /ock own]%ip plan is entitl$ to direct ! employee /ock own]%ip plan z to ! mann] 9 :i* vot+ rights "u securities ( ! employ] :i* are allocat$ to ! acc\nt ( su* p>ticipant or b5efici>y are to be ex]cis$ ) respect to ! approval or disapproval ( any /ock sale2 7ii7 ! requirem5ts ( section #dji7;e77#c7 ( ! ,int]nal ,rev5ue ,code ( #aihf & clause 7i7 ( ?is subp>agraph %all be met us+ ! proc$ures describ$ 9 section #dji7;e77#e7 ( ! ,int]nal ,rev5ue ,code ( #aihf2 7iii7 unless ! p>ties agree o!rwise1 ) respect to unallocat$ %>es1 ! indep5d5t tru/ee %all be direct$ to vote or t5d] su* unallocat$ %>es 9 ! same proportion z allocat$ %>es = :i* ! indep5d5t tru/ee has receiv$ vot+ or t5d] in/ructions f p>ticipants 9 ! employee /ock own]%ip plan2 & 7iv7 ) respect to allocat$ %>es t ! indep5d5t tru/ee does n receive vot+ or t5d] in/ructions f p>ticipants 9 ! employee /ock own]%ip plan1 ! indep5d5t tru/ee %all h vot+ discretion ov] su* %>es4 7#b7 ,vot+ discretion ,no?+ 9 p>agraph 7#a77;,b7 %all limit ! ability ( an indep5d5t tru/ee to ex]cise vot+ discretion 9 accordance ) ! fiduci>y obligations ( ! indep5d5t tru/ee "u ! ,employee ,retirem5t ,income ,security ,act ( #aigd 7#bi ,u4,s4,c4 #ajja et seq474 7#c7 ,limitation ,! requirem5ts "u p>agraph 7#a7 %all apply only ) respect to ! p]iod dur+ :i* ! own]%ip inve/m5t company has an int]e/ 9 ! cov]$ bus9ess conc]n4 7k7 ,reports ,ea* own]%ip inve/m5t company 7includ+ ,protg ,o,i,cs7 %all submit to ! ,secret>y an annual report1 :i* %all include1 = ! ye> cov]$ by ! report1 ! foll[+ in=mation1 disaggregat$ by type ( cov]$ inve/m5t z describ$ 9 subp>agraph 7,a7 or 7,b7 ( section #b7f71 z applicable3 7#a7 ,:e!r ! cov]$ inve/m5t 0 made ) respect to an employee /ock own]%ip plan or eligible work]-own$ coop]ative4 7#b7 ,= an employee /ock own]%ip plan-- 7,a7 ! effective date ( ! employee /ock own]%ip plan2 7,b7 ! numb] ( active employee /ock own]%ip plan p>ticipants2 7,c7 ! numb] ( employees ( ! cov]$ bus9ess conc]n = :i* ! employee /ock own]%ip plan is e/abli%$2 7,d7 ! total value ( employ] securities1 z det]m9$ by an indep5d5t apprais] hir$ by ! indep5d5t tru/ee ( ! employee /ock own]%ip plan2 7,e7 ! total employee /ock own]%ip plan assets2 7,f7 ! total contributions dur+ ! employee /ock own]%ip plan ye>2 7,g7 ! total di/ributions dur+ ! employee /ock own]%ip plan ye>2 7,h7 ! m$ian acc\nt asset balance2 & 7,i7 demographic in=mation ( employee /ock own]%ip plan p>ticipants1 disaggregat$ by race1 g5d]1 & ,/ate1 to ! ext5t available4 7#c7 ,= an eligible work]-own$ coop]ative-- 7,a7 ! numb] ( memb]-own]s2 7,b7 ! numb] ( employees ( ! cov]$ bus9ess conc]n = :i* ! eligible work]-own$ coop]ative is e/abli%$2 7,c7 ! total value ( employ] securities2 7,d7 ! aggregate assets ( all memb]%ip acc\nts ( ! eligible work]-own$ coop]ative2 7,e7 ! m$ian memb]%ip acc\nt balance2 & 7,f7 demographic in=mation ( memb]%ip base1 disaggregat$ by race1 g5d]1 & ,/ate1 to ! ext5t available4 7l7 ,implem5tation mile/ones 7#a7 ,9 g5]al ,n lat] ?an #edj days aft] ! date ( enactm5t ( ?is ,act1 ! ,secret>y %all beg9 accept+ applications to be lic5s$ to p>ticipate 9 ! facility z an own]%ip inve/m5t company4 7#b7 ,lic5se timel9e ,n lat] ?an #b ye>s aft] ! date ( enactm5t ( ?is ,act1 ! ,secret>y %all approve ! fir/ tran*e ( lic5ses to p>ticipate 9 ! facility z an own]%ip inve/m5t company ) respect to applicants t satisfy ! applicable eligibility crit]ia4 7m7 ,sunset 7#a7 ,def9ition ,9 ?is subsection1 ! t]m sunset date means ! fir/ day ( ! #bj? cal5d> ye> t beg9s aft] ! date on :i* ! ,secret>y approves ! fir/ lic5se to p>ticipate 9 ! facility z an own]%ip inve/m5t company 7includ+ z a ,protg ,,oic74 7#b7 ,t]m9ation ( au?ority ,on & aft] ! sunset date1 ! ,secret>y may n lic5se an entity to p>ticipate 9 ! facility z an own]%ip inve/m5t company 7includ+ z a ,protg ,,oic74 7#c7 ,cont9u$ p>ticipation by exi/+ entities ,no?+ 9 p>agraph 7#b7 %all be con/ru$ to prohibit an own]%ip inve/m5t company 7includ+ a ,protg ,,oic7 f cont9u+ to draw lev]age on & aft] ! sunset date t 0 committ$ to ! entity ?r\gh ! facility be=e ! sunset date4 7#d7 ,application ,! ,secret>y %all n consid] p>agraph 7#b7 z a factor 9 ! decision to lic5se an entity to p>ticipate 9 ! facility z an own]%ip inve/m5t company 7includ+ z a ,protg ,,oic7 be=e ! sunset date4 #d4 ,organization ( own]%ip inve/m5t companies 7a7 ,9 g5]al 7#a7 ,requirem5t ,an own]%ip inve/m5t company %all be an incorporat$ body1 a limit$ liability company1 or a limit$ p>tn]%ip organiz$ & *>t]$ or o!rwise exi/+ "u ,/ate law solely = ! purpose ( p]=m+ ! functions & conduct+ ! activities contemplat$ "u ?is ,act1 :i*-- 7,a7 if incorporat$1 has succession = a p]iod ( n few] ?an #cj ye>s unless soon] dissolv$ by its %>ehold]s2 or 7,b7 if a limit$ p>tn]%ip1 has succession = a p]iod ( n few] ?an #aj ye>s1 & possesses ! p[]s reasonably necess>y to p]=m su* functions & conduct su* activities4 7#b7 ,area ( op]ation ,! area 9 :i* an own]%ip inve/m5t company describ$ 9 p>agraph 7#a7 is to conduct its op]ations1 & ! e/abli%m5t ( bran* (fices or ag5cies 7if au?oriz$ by ! articles71 %all be subject to ! approval ( ! ,dep>tm5t4 7b7 ,articles 7#a7 ,requirem5ts ,! articles ( any own]%ip inve/m5t company %all specify-- 7,a7 ! objects = :i* ! company is =m$ 9 g5]al t]ms2 7,b7 ! "n assum$ by ! own]%ip inve/m5t company2 7,c7 ! area or areas 9 :i* ! op]ations ( ! own]%ip inve/m5t company are to be c>ri$ on2 7,d7 ! place :]e ! pr9cipal (fice ( ! own]%ip inve/m5t company is to be locat$2 & 7,e7 ! am\nt & classes ( ! %>es ( capital /ock ( ! own]%ip inve/m5t company4 7#b7 ,inclusions ,articles ( an own]%ip inve/m5t company may conta9 any o!r provisions n inconsi/5t ) ?is ,act t ! own]%ip inve/m5t company may see fit to adopt = ! regulation ( ! bus9ess ( ! own]%ip inve/m5t company & ! conduct ( ! affairs ( ! own]%ip inve/m5t company4 7#c7 ,approval ,articles ( an own]%ip inve/m5t company & any am5dm5ts !reto adopt$ f "t to "t %all be subject to ! approval ( ! ,secret>y4 7c7 ,issuance ( lic5se 7#a7 ,submission ( application 7,a7 ,9 g5]al ,ea* applicant to op]ate z an own]%ip inve/m5t company 7includ+ a ,protg ,,oic7 "u ?is ,act %all submit to ! ,secret>y an application1 9 a =m & includ+ su* docum5tation z may be prescrib$ by ! ,secret>y4 7,b7 ,roll+ basis ,! ,secret>y %all accept applications "u subp>agraph 7,a7 on a roll+ basis4 7,c7 ,electronic submissions ,! ,secret>y %all all[ an applicant "u ?is subsection to electronically submit any docum5t requir$ by ?is subsection & to provide an electronic signature = any signature t is requir$ on su* a docum5t4 7#b7 ,proc$ures 7,a7 ,/atus ,n lat] ?an #ij days aft] ! initial receipt by ! ,secret>y ( an application "u ?is subsection1 ! ,secret>y %all provide ! applicant ) a writt5 report detail+ ! /atus ( ! application & any requirem5ts rema9+ = completion ( ! application4 7,b7 ,approval or disapproval ,)9 #ij days aft] receiv+ a complet$ application submitt$ 9 accordance ) ?is subsection & 9 accordance ) su* requirem5ts z ! ,secret>y may prescribe by regulation1 ! ,secret>y %all-- 7i7 approve ! application & issue a lic5se = su* op]ation to ! applicant if ! requirem5ts ( ?is section are satisfi$2 or 7ii7 disapprove ! application & notify ! applicant 9 writ+ ( ! disapproval4 7#c7 ,matt]s consid]$ 7,a7 ,9 g5]al ,9 review+ & process+ any application "u ?is subsection1 ! ,secret>y-- 7i7 %all det]m9e :e!r-- 7,i7 ! applicant meets ! requirem5ts ( subsections 7a7 & 7b7 ( section #f2 & 7,,ii7 ! managem5t ( ! applicant is qualifi$ & has ! k1 exp]i5ce1 & capability necess>y to comply ) ?is ,act2 7ii7 %all take into consid]ation-- 7,i7 ! ne$ = & availability ( f9anc+ = a cov]$ bus9ess conc]ns 9 ! geographic area 9 :i* ! applicant is to comm5ce bus9ess2 7,,ii7 ! g5]al bus9ess reputation ( ! own]s & managem5t ( ! applicant2 & 7,,iii7 ! probability ( successful op]ations ( ! applicant1 includ+ adequate pr(itability & f9ancial s\ndness2 & 7iii7 %all n take into consid]ation any project$ %ortage or unavailability ( lev]age4 7,b7 ,additional matt]s consid]$ = own]%ip inve/m5t companies 7i7 ,inve/m5t track record ,except z provid$ 9 clause 7ii71 an applicant = a lic5se to op]ate z an own]%ip inve/m5t company %all submit to ! ,secret>y pro( t ! manag]s ( ! applicant h a track record ( manag+ inve/m5ts1 includ+ /ructur$ inve/m5ts1 realiz$ or unrealiz$1 9 an employee /ock own]%ip plan or eligible work]-own$ coop]ative4 7ii7 ,advisory requirem5t ,an applicant t does n h an inve/m5t track record describ$ 9 clause 7i7 or t is a ,protg ,,oic %all submit to ! ,secret>y evid5ce t ! applicant has reta9$ or w reta9 a legal1 acc\nt+1 or f9ancial advisory firm ) n few] ?an #e ye>s ( exp]i5ce 9 /ructur+ employee /ock own]%ip plans or eligible work]-own$ coop]atives4 7iii7 ,limitation ,! ,secret>y may n reject an applicant = a lic5se to op]ate z an own]%ip inve/m5t company solely because ! applicant lacks a suffici5t track record 9 realiz$ inve/m5ts if ! applicant demon/rates an o!rwise successful inve/m5t track record t includes unrealiz$ cov]$ inve/m5ts4 7,c7 ,provisional approval 7i7 ,9 g5]al ,! ,secret>y may provide provisional approval = a lic5se to p>ticipate 9 ! facility z an own]%ip inve/m5t company 7includ+ a ,protg ,,oic7 = a p]iod n to exce$ #a ye> to an inve/m5t firm submitt+ an application "u ?is subsection or-- 7,i7 t does n meet ! m9imum private capital requirem5ts "u section #f7;a7 necess>y = lic5s+ "u ?is subsection at ! "t ( application2 7,,ii7 t /ates an int5t to m effectively raise capital commitm5ts 9 private m>kets ) a lic5se2 & 7,,iii7 t /ates an int5t to m precisely reque/ ! desir$ am\nt ( lev]age cont+5t on secur+ capital f private m>ket inve/ors4 7ii7 ,capital requirem5ts ,an applicant grant$ provisional approval "u clause 7i7 %all n be eligible to receive lev]age until ! applicant satisfies ! requirem5ts ( section #f7;a74 7,d7 ,fees 7i7 ,9 g5]al ,! ,secret>y may prescribe fees to be paid by ea* applicant = a lic5se to op]ate z an own]%ip inve/m5t company 7includ+ a ,protg ,,oic7 "u ?is ,act4 7ii7 ,use ( am\nts ,fees collect$ "u ?is subp>agraph-- 7,i7 %all be deposit$ 9 ! acc\nt = sal>ies & exp5ses ( ! ,dep>tm5t2 & 7,,ii7 are au?oriz$ to be appropriat$ solely to cov] ! co/s ( lic5s+ exam9ations4 7d7 #aidj & #aihj ,act ,companies 7#a7 ,9 g5]al 7,a7 ,application ,a #aidj ,act ,company or #aihj ,act ,company is eligible to apply = a lic5se "u ?is ,act4 7,b7 ,eligibility ( lic5sees ,a lic5see t is n regi/]$ z a #aidj ,act ,company or #aihj ,act ,company is eligible to apply = approval f ! ,secret>y to conv]t to a #aidj ,act ,company or #aihj ,act ,company4 7#b7 ,regulation ,a #aidj ,act ,company or #aihj ,act ,company t is a lic5see may elect to be tax$ z a regulat$ inve/m5t company = purposes ( section #hea ( ! ,int]nal ,rev5ue ,code ( #aihf 7#bf ,u4,s4,c4 #hea71 provid$ t ! lic5see mak+ su* election may make di/ributions only z p]mitt$ "u ! applicable guidance or regulations t ! ,secret>y may prescribe4 #e4 ,protg ,,oic ,program 7a7 ,e/abli%m5t ,! ,secret>y %all e/abli% a program to be kn[n z ! ,protg ,,oic ,program "u :i* a manag] ( an own]%ip inve/m5t company t is n a ,protg ,,oic may ent] into a writt5 agreem5t approv$ by ! ,secret>y to provide guidance & assi/ance to a ,protg ,,oic ) respect to-- 7#a7 apply+ = a lic5se = ! ,protg ,,oic to op]ate z an own]%ip inve/m5t company2 & 7#b7 managem5t ( ! own]%ip inve/m5t company aft] lic5sure4 7b7 ,application ,aft] ent]+ into a writt5 agreem5t describ$ 9 subsection 7a71 ! ,protg ,,oic %all apply = a lic5se "u section #d7;c74 7c7 ,selection ,! ,secret>y may grant a lic5se to a ,protg ,,oic to op]ate z an own]%ip inve/m5t company "u section #d7;c7 bas$ on ! inve/m5t track record ( #a or m ( ! manag]s t h ent]$ into a writt5 agreem5t describ$ 9 subsection 7a7 ( ?is section ) ! applicant ,protg ,,oic4 7d7 ,requirem5ts = manag]s ,if a manag] ent]s into a writt5 agreem5t describ$ 9 subsection 7a7-- 7#a7 ! manag] may hold a m9ority f9ancial int]e/ 9 ! own]%ip inve/m5t company t is to be manag$ by ! ,protg ,,oic2 7#b7 ! o!rwise applicable maximum am\nt ( out/&+ lev]age t may be made available to any #a lic5s$ company ( ! manag] "u section #g7;b77#f77;,b77i77,i7 %all be increas$ by #ag1ejj1jjj2 & 7#c7 ! o!rwise applicable maximum am\nt ( out/&+ lev]age t may be made available to any #b or m lic5s$ companies t are commonly controll$ by ! manag] "u section #g7;b77#f77;,b77i77,,ii7 %all be increas$ by #ce1jjj1jjj4 #f4 ,capital requirem5ts 7a7 ,am\nt 7#a7 ,9 g5]al ,! private capital ( ea* lic5see %all be n less ?an #aj1jjj1jjj4 7#b7 ,adequacy ,9 addition to ! requirem5t "u p>agraph 7#a71 ! ,secret>y %all-- 7,a7 det]m9e :e!r ! private capital ( ea* lic5see is adequate to assure a reasonable prospect t ! lic5see w be op]at$ s\ndly & pr(itably1 & manag$ actively & prud5tly 9 accordance ) ! articles ( ! lic5see2 & 7,b7 det]m9e :e!r ! lic5see w be able1 bo? prior to lic5s+ & prior to approv+ any reque/ = f9anc+1 to make p]iodic paym5ts on any debt ( ! lic5see t is int]e/ be>+ & %all take into consid]ation ! income t ! lic5see anticipates on ! contemplat$ inve/m5ts ( ! lic5see1 ! exp]i5ce ( ! own]s & manag]s ( ! lic5see1 ! hi/ory ( ! lic5see z an entity1 if any1 & ! f9ancial res\rces ( ! lic5see4 7b7 ,div]sification ( own]%ip ,! ,secret>y %all ensure t ! managem5t ( ea* lic5see 7includ+ ,protg ,o,i,cs7 is suffici5tly div]sifi$ f & unaffiliat$ ) ! own]%ip ( ! lic5see 9 a mann] t ensures indep5d5ce & objectivity 9 ! f9ancial managem5t & ov]sight ( ! inve/m5ts & op]ations ( ! lic5see4 #g4 ,borr[+ p[] 7a7 ,9 g5]al ,ea* own]%ip inve/m5t company %all h au?ority to borr[ money & to issue its securities1 promissory notes1 or o!r obligations "u su* g5]al conditions & subject to su* limitations & regulations z ! ,secret>y may prescribe4 7b7 ,au?ority ,to gu>antee 7#a7 ,grant ( au?ority ,to enc\rage ! =mation & gr[? ( own]%ip inve/m5t companies ! ,secret>y may1 :5 au?oriz$ 9 appropriation ,acts1 gu>antee ! timely paym5t ( all pr9cipal & int]e/ z s*$ul$ on deb5tures issu$ by own]%ip inve/m5t companies4 7#b7 ,t]ms & conditions ,gu>antees made "u p>agraph 7#a7 may be made by ! ,secret>y on su* t]ms & conditions z ! ,secret>y deems appropriate1 pursuant to regulations issu$ by ! ,secret>y4 7#c7 ,full fai? & cr$it ,! full fai? & cr$it ( ! ,unit$ ,/ates is pl$g$ to ! paym5t ( all am\nts t may be requir$ to be paid "u any gu>antee "u ?is subsection4 7#d7 ,/atus ( deb5tures ,deb5tures gu>ante$ by ! ,dep>tm5t "u ?is subsection %all be subord9ate to any o!r deb5ture bonds1 promissory notes1 or o!r debts & obligations ( an own]%ip inve/m5t company1 unless ! ,secret>y1 9 ! ex]cise ( reasonable inve/m5t prud5ce & 9 consid]+ ! f9ancial s\ndness ( su* own]%ip inve/m5t company1 det]m9es o!rwise4 7#e7 ,t]m & int]e/ rate ,a deb5ture issu$ "u ?is subsection may be issu$ = a t]m ( n to exce$ #ae ye>s & %all be> int]e/ at a rate n less ?an a rate det]m9$ by ! ,secret>y ( ! ,treasury1 tak+ into consid]ation ! curr5t av]age m>ket yield on out/&+ m>ketable obligations ( ! ,unit$ ,/ates ) rema9+ p]iods to maturity comp>able to ! av]age maturities on su* deb5tures1 adju/$ to ! ne>e/ #a_/h ( #a p] c5tum1 plus an additional *>ge1 9 an am\nt e/abli%$ annually by ! ,secret>y1 z necess>y to r$uce to #j ! co/ 7z def9$ 9 section #ejb ( ! ,f$]al ,cr$it ,re=m ,act ( #aiij 7#b ,u4,s4,c4 #ffa;a77 to ! ,dep>tm5t gu>antee+ deb5tures "u ?is ,act1 :i* am\nt may n exce$ #a4ch p]c5t p] ye>1 & :i* %all be paid to & reta9$ by ! ,dep>tm5t4 7#f7 ,additional re/rictions & limitations ,a deb5ture issu$ "u ?is subsection-- 7,a7 %all include su* o!r t]ms z ! ,dep>tm5t may fix2 & 7,b7 %all be subject to ! foll[+ re/rictions & limitations3 7i7 7,i7 ,! maximum am\nt ( out/&+ lev]age made available to any #a own]%ip inve/m5t company lic5s$ "u section #d7;c7 t is n a ,protg ,,oic may n exce$ ! less] (-- 7aa7 #ajj p]c5t ( ! private capital ( su* company2 or 7bb7 #ejj1jjj1jjj4 7,,ii7 ,! maximum am\nt ( out/&+ lev]age made available to #b or m own]%ip inve/m5t companies lic5s$ "u section #d7;c7 t are commonly controll$ 7z det]m9$ by ! ,secret>y7 & n "u capital impairm5t may n exce$ #a1jjj1jjj1jjj4 7ii7 ,a ,protg ,,oic may n h multiple lic5ses "u common control4 7iii7 ,! maximum am\nt ( out/&+ lev]age made available "u ! facility e/abli%$ "u section #c to any #a ,protg ,,oic may n to exce$ ! less] (-- 7,i7 #ajj p]c5t ( ! private capital ( ! ,protg ,,oic2 or 7,,ii7 #ajj1jjj1jjj4 7iv7 7,i7 ,9 calculat+ ! out/&+ lev]age ( a company = ! purposes ( subclauses 7,i7 & 7,,ii7 ( clause 7i71 ! ,secret>y %all n include ! am\nt ( ! co/ basis ( any cov]$ inve/m5t made by ! own]%ip inve/m5t company 9 a cov]$ bus9ess conc]n t-- 7aa7 conducts 9 ! ,unit$ ,/ates rese>* & developm5t1 eng9e]+1 or production activities necess>y or incid5tal to manufactur+2 7bb7 op]ates 9 a critical indu/ry or critical te*nology area id5tifi$ by ! ,secret>y to be vital to ma9ta9+ ! national or economic security ( ! ,unit$ ,/ates2 & 7cc7 is headqu>t]$ 9 ! ,unit$ ,/ates1 or w be headqu>t]$ 9 ! ,unit$ ,/ates imm$iately foll[+ ! transaction 9 ! case ( a cov]$ inve/m5t describ$ 9 section #b7f77;,a74 7,,ii7 ,! exclusion ( am\nts 9 subclause 7,i7 %all n exce$ a total ( #ge1jjj1jjj or #be p]c5t ( private capital ( su* company1 :i*ev] is less4 7,,iii7 ,subclause 7,i7 %all n apply to any ,protg ,,oic4 7v7 ,no?+ 9 ?is p>agraph %all prev5t lic5sees ) #a or m small bus9ess inve/m5t companies lic5s$ "u section #cja7;c7 ( ! ,small ,bus9ess ,inve/m5t ,act ( #aieh 7#ae ,u4,s4,c4 #fha7 "u common control 7z det]m9$ by ! ,secret>y71 includ+ lic5sees ^: small bus9ess inve/m5t companies h receiv$ ! maximum am\nt ( lev]age 9 sections #cjc7;b77#b77;,a7 or #cjc7;b77#b77;,b7 ( t ,act1 f receiv+ ! maximum am\nt ( lev]age 9 clause 7i74 7c7 ,?ird p>ty debt ,! ,secret>y-- 7#a7 may n p]mit a lic5see hav+ out/&+ lev]age to incur ?ird p>ty debt t w\ld create or contribute to an unreasonable risk ( default or loss to ! ,f$]al ,gov]nm5t2 & 7#b7 %all p]mit any lic5see to incur ?ird p>ty debt only on su* t]ms & subject to su* conditions z may be e/abli%$ by ! ,secret>y1 by regulation or o!rwise4 7d7 ,capital impairm5t ,be=e approv+ any application = lev]age submitt$ by a lic5see "u ?is ,act1 ! ,secret>y-- 7#a7 %all det]m9e t ! private capital ( ! lic5see meets ! requirem5ts ( section #f7;a72 & 7#b7 %all det]m9e1 tak+ into acc\nt ! nature ( ! assets ( ! lic5see1 ! am\nt & t]ms ( any ?ird p>ty debt ow$ by su* lic5see1 & any o!r factors det]m9$ to be relevant by ! ,secret>y1 t ! private capital ( ! lic5see has n be5 impair$ to su* an ext5t t ! issuance ( additional lev]age w\ld create or o!rwise contribute to an unreasonable risk ( default or loss to ! ,f$]al ,gov]nm5t4 7e7 ,lev]age fee ,) respect to lev]age grant$ by ! ,dep>tm5t to a lic5see1 ! ,dep>tm5t %all collect f ! lic5see a nonrefundable fee 9 an am\nt equal to #c p]c5t ( ! face am\nt ( lev]age grant$ to ! lic5see 9 ! foll[+ mann]3 7#a7 ,"o p]c5t ^u ! date on :i* ! ,dep>tm5t ent]s into any commitm5t = su* lev]age ) ! lic5see4 7#b7 ,! balance ( #b p]c5t 7or #c p]c5t if no commitm5t has be5 ent]$ into by ! ,dep>tm5t7 on ! date on :i* ! lev]age is drawn by ! lic5see4 7f7 ,calculation ( subsidy rate ,all fees & int]e/ receiv$ & reta9$ by ! ,dep>tm5t "u ?is section %all be includ$ 9 ! calculations made by ! ,director ( ! ,(fice ( ,managem5t & ,budget to (fset ! co/ 7z t t]m is def9$ 9 section #ejb ( ! ,f$]al ,cr$it ,re=m ,act ( #aiij 7#b ,u4,s4,c4 #ffa;a77 to ! ,dep>tm5t ( gu>antee+ deb5tures "u ?is ,act4 #h4 ,provision ( inve/m5t capital = cov]$ bus9ess conc]ns 7a7 ,9 g5]al ,ea* own]%ip inve/m5t company %all provide a s\rce ( debt1 syn!tic equity1 pref]r$ /ock1 or equity capital1 or a comb9ation !re(1 = incorporat$ & un9corporat$ cov]$ bus9ess conc]ns1 9 su* mann] & "u su* t]ms z ! own]%ip inve/m5t company may fix 9 accordance ) ! regulations e/abli%$ by ! ,dep>tm5t4 7b7 ,requirem5t ,be=e any capital describ$ 9 subsection 7a7 is provid$ to a cov]$ bus9ess conc]n "u ?is section-- 7#a7 ! own]%ip inve/m5t company may require a cov]$ bus9ess conc]n to ref9ance any or all ( ! out/&+ indebt$ness ( ! cov]$ bus9ess conc]n s t ! own]%ip inve/m5t company is ! only hold] ( any evid5ce ( indebt$ness ( ! cov]$ bus9ess conc]n2 & 7#b7 except z provid$ 9 regulations issu$ by ! ,secret>y1 su* ! cov]$ bus9ess conc]n %all agree t ! cov]$ bus9ess conc]n w n !reaft] incur any indebt$ness )\t fir/ secur+ ! approval ( ! own]%ip inve/m5t company & giv+ ! own]%ip inve/m5t company ! fir/ opportunity to f9ance su* indebt$ness4 7c7 ,?ird p>ty inve/ors ,inve/m5t capital provid$ to cov]$ bus9ess conc]ns "u ?is section may be provid$ directly or 9 coop]ation ) o!r inve/ors1 incorporat$ or un9corporat$1 ?r\gh agreem5ts to p>ticipate on an imm$iate or def]r$ basis4 7d7 ,int]e/ ,! maximum rate ( int]e/ = ! %>e ( an own]%ip inve/m5t company ( any loan made "u ?is section %all be det]m9$ by ! ,secret>y-- 7#a7 provid$ t ! ,dep>tm5t also %all p]mit ^? own]%ip inve/m5t companies t h issu$ deb5tures pursuant to ?is ,act to *>ge a maximum rate ( int]e/ bas$ ^u ! c\pon rate ( int]e/ on ! out/&+ deb5tures1 det]m9$ on an annual basis1 plus su* o!r exp5ses ( ! own]%ip inve/m5t company z may be approv$ by ! ,dep>tm5t2 & 7#b7 9 mak+ ! initial det]m9ations on ! maximum rate ( int]e/ "u ?is subsection foll[+ ! enactm5t ( ?is ,act1 ! ,secret>y %all consult ! regulations promulgat$ by ! ,adm9i/rator ( ! ,small ,bus9ess ,adm9i/ration on ! maximum rate ( int]e/ = loans & debt securities 9 accordance ) section #cje ( ! ,small ,bus9ess ,inve/m5t ,act ( #aieh 7#ae ,u4,s4,c4 #fhe74 7e7 ,maturity 7#a7 ,9 g5]al ,any loan made "u ?is section %all h a maturity n exce$+ #bj ye>s4 7#b7 ,ext5sion or r5ewal ,any own]%ip inve/m5t company t makes a loan to a cov]$ bus9ess conc]n "u ?is section is au?oriz$ to ext5d ! maturity ( or r5ew su* loan = additional p]iods1 n exce$+ #aj ye>s1 if ! own]%ip inve/m5t company f9ds t su* ext5sion or r5ewal w aid 9 ! ord]ly liquidation ( su* loan4 7f7 ,repaym5t ,any loan made "u ?is section %all be ( su* s\nd value1 or s secur$1 z reasonably to assure repaym5t4 #i4 ,portfolio div]sification ,if any own]%ip inve/m5t company obta9s f9anc+ f ! ,secret>y "u ?is ,act & su* f9anc+ rema9s out/&+1 ! aggregate am\nt ( securities acquir$ & = :i* commitm5ts may be issu$ by ! own]%ip inve/m5t company "u ?is ,act = any s+le cov]$ bus9ess conc]n %all n1 )\t ! approval ( ! ,secret>y1 exce$ #aj p]c5t ( ! sum (-- 7#a7 ! private capital ( su* company2 & 7#b7 ! total am\nt ( lev]age project$ by ! own]%ip inve/m5t company 9 ! bus9ess plan ( ! own]%ip inve/m5t company t 0 approv$ by ! ,secret>y at ! "t ( ! grant ( ! lic5se ( ! own]%ip inve/m5t company4 #aj4 ,exemptions 7a7 ,securities ,act ( #aicc ,not)/&+ ! provisions ( title ,i ( ! ,securities ,act ( #aicc 7#ae ,u4,s4,c4 #gg;a et seq471 ! ,securities & ,ex*ange ,commission may f "t to "t by ! rules & regulations ( ! ,securities & ,ex*ange ,commission1 & subject to su* t]ms & conditions z may be prescrib$ "u section #c ( ! ,securities ,act ( #aicc 7#ae ,u4,s4,c4 #gg;c71 add to ! securities exempt$ z provid$ 9 section #c ( t ,act any class ( securities issu$ by an own]%ip inve/m5t company "u ?is ,act if ! ,securities & ,ex*ange ,commission f9ds1 hav+ reg>d to ! purposes ( ! ,securities ,act ( #aicc 7#ae ,u4,s4,c4 #gg;a et seq471 t ! en=cem5t ( title ,i ( ! ,securities ,act ( #aicc 7#ae ,u4,s4,c4 #gg;a et seq471 ) respect to su* securities1 is n necess>y 9 ! public int]e/ & = ! protection ( inve/ors4 7b7 ,tru/ ,ind5ture ,act ( #aici ,not)/&+ ! provisions ( title ,,iii ( ! ,tru/ ,ind5ture ,act ( #aici 7#ae ,u4,s4,c4 #gg;aaa et seq471 ! ,securities & ,ex*ange ,commission may f "t to "t by ! rules & regulations ( ! ,securities & ,ex*ange ,commission1 & subject to su* t]ms & conditions z may be prescrib$ "u section #cjd ( ! ,tru/ ,ind5ture ,act ( #aici 7#ae ,u4,s4,c4 #gg;ddd71 add to ! securities exempt$ z provid$ 9 section #cjd ( t ,act any class ( securities issu$ by an own]%ip inve/m5t company "u ?is ,act if ! ,securities & ,ex*ange ,commission f9ds1 hav+ reg>d to ! purposes ( ! ,tru/ ,ind5ture ,act ( #aici 7#ae ,u4,s4,c4 #gg;aaa et seq471 t ! en=cem5t ( title ,,iii ( ! ,tru/ ,ind5ture ,act ( #aici 7#ae ,u4,s4,c4 #gg;aaa et seq471 ) respect to su* securities is n necess>y 9 ! public int]e/ & = ! protection ( inve/ors4 7c7 ,inve/m5t ,company ,act ( #aidj ,not)/&+ ! provisions ( section #ah ( ! ,inve/m5t ,company ,act ( #aidj 7#ae ,u4,s4,c4 #hj;a-#ah71 ! provisions ( subp>agraphs 7,a7 & 7,b7 ( subsection 7a77#a7 ( t section %all n apply to any own]%ip inve/m5t company op]at+ "u ?is ,act1 provid$ t su* class ( s5ior security %all be gu>ante$ by ! ,dep>tm5t4 #aa4 ,lev]age requirem5ts ,no lev]age %all be committ$ by ! ,dep>tm5t "u ?is ,act to any lic5see unless ! manag]s ( su* lic5see-- 7#a7 c]tify to ! ,dep>tm5t ! names ( any attorneys1 ag5ts1 or o!r p]sons engag$ by or on behalf ( su* lic5see = ! purpose ( exp$it+ applications made to ! ,dep>tm5t = assi/ance ( any sort1 & ! fees paid or to be paid to any su* p]sons2 & 7#b7 executes an agreem5t b9d+ any su* lic5see = a p]iod ( #b ye>s aft] any assi/ance is r5d]$ by ! ,dep>tm5t to su* lic5see1 to refra9 f employ+1 t5d]+ any (fice or employm5t to1 or reta9+ = pr(essional s]vices1 any p]son :o1 on ! date su* assi/ance or any "p !re( 0 r5d]$1 or )9 ! #a ye> p]iod prior !reto1 %all h s]v$ z an (fic]1 attorney1 ag5t1 or employee ( ! ,dep>tm5t occupy+ a position or engag+ 9 activities :i* ! dep>tm5t %all h det]m9$ involve discretion ) respect to ! grant+ ( assi/ance "u ?is ,act4 #ab4 ,report+ 7a7 ,9 g5]al ,n lat] ?an #a ye> aft] ! date ( enactm5t ( ?is ,act1 & ea* ye> !reaft]1 ! ,secret>y %all submit to ,congress a full & detail$ acc\nt ( ! op]ations ( ! ,dep>tm5t "u ?is ,act1 includ+ ! am\nt ( losses su/a9$ by ! ,gov]nm5t z a result ( su* op]ations dur+ ! prec$+ fiscal ye>1 toge!r ) an e/imate ( ! total losses t ! ,gov]nm5t c reasonably expect to incur z a result ( su* op]ations dur+ ! curr5t fiscal ye>4 7b7 ,cont5ts ,9 ! annual report submitt$ pursuant to subsection 7a71 ! ,secret>y %all include full & detail$ acc\nts relative to ! foll[+ matt]s3 7#a7 ,! plans ( ! ,dep>tm5t to insure ! provision ( own]%ip inve/m5t company f9anc+ & lic5s+ to all areas ( ! c\ntry & to all cov]$ bus9ess conc]ns1 includ+ /eps tak5 to accompli% ! same4 7#b7 ,! plans ( ! ,dep>tm5t to support ,/ates t seek to increase ! numb] ( lic5sees 9 ! ,/ate4 7#c7 ,/eps tak5 by ! ,dep>tm5t to maximize rec\pm5t ( ,gov]nm5t funds incid5t to ! inauguration & adm9i/ration ( ! own]%ip inve/m5t company program & to insure compliance ) /atutory & regulatory /&>ds relat+ to ! own]%ip inve/m5t company program4 7#d7 ,recomm5dations to ! ,dep>tm5t ( ! ,treasury ) respect to additional tax inc5tives to improve & facilitate ! op]ations ( own]%ip inve/m5t companies & to enc\rage ! use ( ! f9anc+ facilities ( own]%ip inve/m5t companies by cov]$ bus9ess conc]ns4 7#e7 ,a report f ! ,securities & ,ex*ange ,commission enum]at+ actions und]tak5 by ! ,securities & ,ex*ange ,commission to-- 7,a7 simplify & m9imize ! regulatory requirem5ts gov]n+ own]%ip inve/m5t companies "u ! ,f$]al securities laws2 & 7,b7 elim9ate ov]lapp+ regulation & jurisdiction z betwe5 ! ,securities & ,ex*ange ,commission1 ! ,dep>tm5t1 & o!r ag5cies ( ! executive bran*4 7#f7 ,actions und]tak5 by ! ,securities & ,ex*ange ,commission to simplify compliance by own]%ip inve/m5t companies ) ! requirem5ts ( ! ,inve/m5t ,company ,act ( #aidj & to facilitate ! election to be tax$ z regulat$ inve/m5t companies pursuant to section #hea ( ! ,int]nal ,rev5ue ,code ( #aied4 7#g7 ,! numb] ( own]%ip inve/m5t companies ! ,dep>tm5t lic5s$ 7includ+ ,protg ,o,i,cs71 ! numb] ( lic5sees t h be5 plac$ 9 liquidation1 & ! numb] ( lic5sees t h surr5d]$ _! lic5ses dur+ ! ye> end+ on ! date ! report is submitt$1 id5tify+ ! am\nt ( lev]age ea* receiv$ dur+ t p]iod4 7#h7 ,! am\nt ( lev]age t own]%ip inve/m5t companies 7includ+ ,protg ,o,i,cs7 receiv$ dur+ ! ye> end+ on ! date ! report is submitt$4 7#i7 ,! sizes1 geographic locations1 & o!r *>act]i/ics ( lic5s$ own]%ip inve/m5t companies 7includ+ ,protg ,o,i,cs71 includ+ ! ext5t to :i* ! own]%ip inve/m5t companies h us$ ! lev]age to make debt1 syn!tic equity1 pref]r$ equity1 or equity inve/m5ts1 or a comb9ation !re(1 to cov]$ bus9ess conc]ns4 7#aj7 ,! geographic disp]sion ( lic5sees 9 ea* ,/ate comp>$ to ! population ( ! ,/ate4 7#aa7 ,a summ>y ( employee /ock own]%ip plans creat$ by an own]%ip inve/m5t company 7includ+ ,protg ,o,i,cs71 includ+-- 7,a7 ! total numb] ( active plan p>ticipants2 7,b7 ! total numb] ( employees ( ! cov]$ bus9ess conc]ns ) su* employee /ock own]%ip plans2 7,c7 ! total value ( employ] securities1 z det]m9$ by ! indep5d5t apprais]s hir$ by ! indep5d5t tru/ee ( ea* employee /ock own]%ip plan2 7,d7 ! total plan assets2 7,e7 ! total contributions dur+ ! plan ye>2 7,f7 ! total di/ributions dur+ ! plan ye>2 7,g7 ! m$ian acc\nt asset balance2 & 7,h7 demographic in=mation ( plan p>ticipants1 disaggregat$ by race1 g5d]1 & ,/ate1 to ! ext5t available4 7#ab7 ,a summ>y ( eligible work]-own$ coop]atives creat$ by own]%ip inve/m5t companies 7includ+ ,protg ,o,i,cs71 includ+-- 7,a7 ! numb] ( memb]-own]s2 7,b7 ! total numb] ( employees ( ! cov]$ bus9ess conc]n ) su* eligible work]-own$ coop]atives2 7,c7 ! total value ( employ] securities2 7,d7 ! assets ( all memb]%ip acc\nts2 7,e7 ! m$ian memb]%ip acc\nt balance2 & 7,f7 demographic in=mation ( memb]%ip base1 disaggregat$ by race1 g5d]1 & ,/ate1 to ! ext5t available4 #ac4 ,revocation & susp5sion ( lic5ses2 cease & desi/ ord]s 7a7 ,9 g5]al ,a lic5se may be revok$ or susp5d$ by ! ,secret>y-- 7#a7 = any false /atem5t kn[+ly made 9 any writt5 /atem5t requir$ "u ?is ,act1 or "u any regulation issu$ "u ?is ,act by ! ,secret>y2 7#b7 if any writt5 /atem5t requir$ "u ?is ,act1 or "u any regulation issu$ "u ?is ,act by ! ,secret>y1 fails to /ate a mat]ial fact necess>y 9 ord] to make ! /atem5t n mislead+ 9 ! light ( ! circum/ances "u :i* ! /atem5t 0 made2 7#c7 = willful or repeat$ violation1 or willful or repeat$ failure to obs]ve1 any provision ( ?is ,act2 7#d7 = willful or repeat$ violation (1 or willful or repeat$ failure to obs]ve1 any rule or regulation issu$ "u ?is ,act by ! ,secret>y2 or 7#e7 = violation (1 or failure to obs]ve1 any cease & desi/ ord] issu$ by ! ,secret>y "u ?is section4 7b7 ,ord] ,to cease & desi/ 7#a7 ,issuance ,:]e a lic5see or any o!r p]son has n compli$ ) any provision ( ?is ,act1 or ( any regulation issu$ "u ?is ,act by ! ,secret>y1 or is engag+ or is ab\t to engage 9 any acts or practices t con/itute or w con/itute a violation ( su* ,act or regulation1 ! ,secret>y may ord] su* lic5see or o!r p]son to cease & desi/ f su* action or failure to act4 7#b7 ,actions requir$ ,! ,secret>y may ord] su* lic5see or o!r p]son to take su* action or to refra9 f su* action z ! ,secret>y deems necess>y to insure compliance ) ! ,act & ! regulations implem5t+ ?is ,act4 7#c7 ,susp5sion ( lic5ses ,! ,secret>y may also susp5d ! lic5se ( a lic5see aga9/ :om an ord] has be5 issu$ until su* lic5see complies ) an ord] issu$ "u ?is subsection4 7c7 ,ord]s ,to %[ cause 7#a7 ,issuance ,be=e revok+ or susp5d+ a lic5se pursuant to subsection 7a7 or issu+ a cease & desi/ ord] pursuant to subsection 7b71 ! ,secret>y %all s]ve ^u ! lic5see & any o!r p]son involv$ an ord] to %[ cause :y an ord] revok+ or susp5d+ ! lic5se or a cease & desi/ ord] %\ld n be issu$4 7#b7 ,cont5ts ,any ord] to %[ cause issu$ "u p>agraph 7#a7 %all-- 7,a7 conta9 a /atem5t ( ! matt]s ( fact & law ass]t$ by ! ,dep>tm5t & ! legal au?ority & jurisdiction "u :i* a he>+ is to be held2 & 7,b7 set =? t a he>+ w be held be=e ! ,dep>tm5t at a "t & place /at$ 9 ! ord]4 7#c7 ,/atem5t ( f9d+s ,if aft] he>+1 or a waiv] !re(1 ! ,secret>y det]m9es on ! record t an ord] revok+ or susp5d+ ! lic5se or a cease & desi/ ord] %\ld issue1 ! ,secret>y %all-- 7,a7 promptly issue su* ord]1 :i* %all include a /atem5t ( ! f9d+s ( ! ,secret>y & ! gr\nds & reasons !re= & specify ! effective date ( ! ord]2 & 7,b7 cause ! ord] to be s]v$ on ! lic5see & any o!r p]son involv$4 7d7 ,witnesses 7#a7 ,subpo5a au?ority ,! ,secret>y may require by subpo5a ! att5dance & te/imony ( witnesses & ! production ( all books1 pap]s1 & docum5ts relat+ to ! he>+ f any place 9 ! ,unit$ ,/ates4 7#b7 ,paym5t ,any witness summon$ be=e ! ,dep>tm5t %all be paid by ! p>ty at ^: in/ance ! witness 0 call$ ! same fees & mileage t are paid witnesses 9 ! c\rts ( ! ,unit$ ,/ates4 7#c7 ,aid ( ! c\rt ,9 case ( disob$i5ce to a subpo5a1 ! ,secret>y1 or any p>ty to a proce$+ be=e ! ,dep>tm5t1 may invoke ! aid ( any c\rt ( ! ,unit$ ,/ates 9 requir+ ! att5dance & te/imony ( witnesses & ! production ( books1 pap]s1 & docum5ts4 7e7 ,appeals 7#a7 ,fil+ 7,a7 ,9 g5]al ,an ord] issu$ by ! ,secret>y "u ?is section %all be f9al & conclusive unless )9 #cj days aft] ! s]vice !re( ! lic5see1 or o!r p]son aga9/ :om an ord] is issu$1 appeals to ! ,unit$ ,/ates c\rt ( appeals = ! circuit 9 :i* su* lic5see has its pr9cipal place ( bus9ess by fil+ ) ! cl]k ( su* c\rt a petition pray+ t ! ,dep>tm5t's ord] be set aside or modifi$ 9 ! mann] /at$ 9 ! petition4 7,b7 ,leave requir$ ,aft] ! expiration ( ! #cj-;day p]iod describ$ 9 subp>agraph 7,a71 a petition may be fil$ only by leave ( c\rt on a %[+ ( reasonable gr\nds = failure to file ! petition !ret(ore4 7#b7 ,deliv]y ,! cl]k ( ! c\rt %all imm$iately cause a copy ( ! petition describ$ 9 p>agraph 7#a7 to be deliv]$ to ! ,secret>y1 &1 ^u receipt1 ! ,secret>y %all c]tify & file 9 ! c\rt a transcript ( ! record ^u :i* ! ord] compla9$ ( 0 ent]$4 7#c7 ,am5d+ petition ,if1 be=e ! record is fil$ "u p>agraph 7#b71 ! ,secret>y am5ds or sets aside its ord]1 9 :ole or 9 "p1 ! petition] may am5d ! petition )9 su* "t z ! c\rt may det]m9e1 on notice to ! ,secret>y4 7#d7 ,op]ation ( ord] ,! fil+ ( a petition = review "u ?is subsection %all n ( itself /ay or susp5d ! op]ation ( ! ord] ( ! ,dep>tm5t1 b ! c\rt ( appeals 9 its discretion may re/ra9 or susp5d1 9 :ole or 9 "p1 ! op]ation ( ! ord] p5d+ ! f9al he>+ & det]m9ation ( ! petition4 7#e7 ,disposition 7,a7 ,9 g5]al ,! c\rt may affirm1 modify1 or set aside ! ord] ( ! ,secret>y "u ?is section4 7,b7 ,evid5ce ,if ! c\rt det]m9es t ! j & prop] disposition ( ! case requires ! tak+ ( additional evid5ce1 ! c\rt %all ord] ! ,secret>y to reop5 ! he>+ = ! tak+ ( su* evid5ce1 9 su* mann] & ^u su* t]ms & conditions z ! c\rt may deem prop]4 7,c7 ,f9d+s ( fact ,! ,secret>y-- 7i7 may modify ! f9d+s z to ! facts ( ! ,dep>tm5t1 or make new f9d+s1 by reason ( ! additional evid5ce s tak52 & 7ii7 %all file modifi$ or new f9d+s & ! am5dm5ts1 if any1 ( ! ord]1 ) ! record ( su* additional evid5ce4 7,d7 ,objections ,no objection to an ord] ( ! ,secret>y %all be consid]$ by ! c\rt unless su* objection 0 urg$ be=e ! ,dep>tm5t or1 if x 0 n s urg$1 unless !re 7 reasonable gr\nds = failure to d s4 7,e7 ,review ,! judgm5t & decree ( ! c\rt affirm+1 modify+1 or sett+ aside any su* ord] ( ! ,secret>y %all be subject only to review by ! ,supreme ,c\rt ( ! ,unit$ ,/ates ^u c]tification or c]tior>i z provid$ 9 section #abed ( title #bh1 ,unit$ ,/ates ,code4 7f7 ,en=cem5t 7#a7 ,failure to obey ,if any lic5see or o!r p]son aga9/ :i* or aga9/ :om an ord] is issu$ "u ?is section fails to obey ! ord]1 ! ,secret>y-- 7,a7 may apply to ! ,unit$ ,/ates c\rt ( appeals1 )9 ! circuit :]e ! lic5see has its pr9cipal place ( bus9ess1 = ! en=cem5t ( ! ord]2 & 7,b7 %all file a transcript ( ! record ^u :i* ! ord] compla9$ ( 0 ent]$4 7#b7 ,notice ,^u ! fil+ ( ! application "u p>agraph 7#a71 ! c\rt %all cause notice !re( to be s]v$ on ! lic5see or o!r p]son4 7#c7 ,evid5ce ,! evid5ce to be consid]$1 ! proc$ure to be foll[$1 & ! jurisdiction ( ! c\rt %all be ! same z is provid$ 9 subsection 7e7 = applications to set aside or modify ord]s4 #ad4 ,exam9ations & inve/igations 7a7 ,inve/igations 7#a7 ,9 g5]al ,! ,secret>y may make su* inve/igations z ! ,secret>y deems necess>y to det]m9e :e!r a lic5see or any o!r p]son has engag$ or is ab\t to engage 9 any acts or practices :i* con/itute or w con/itute a violation ( any provision ( ?is ,act1 or ( any rule or regulation "u ?is ,act1 or ( any ord] issu$ "u ?is ,act4 7#b7 ,/atem5ts ,! ,secret>y %all p]mit any p]son to file ) x a /atem5t 9 writ+1 "u oa? or o!rwise z ! ,secret>y %all det]m9e1 z to all ! facts & circum/ances conc]n+ ! matt] to be inve/igat$4 7#c7 ,oa?s & affirmations ,= ! purpose ( any inve/igation "u ?is subsection1 ! ,secret>y is emp[]$ to-- 7,a7 adm9i/] oa?s & affirmations2 7,b7 subpo5a witnesses2 7,c7 compel ! att5dance ( witnesses2 7,d7 take evid5ce2 & 7,e7 require ! production ( any books1 pap]s1 & docum5ts t are relevant to ! inquiry4 7#d7 ,att5dance & production 7,a7 ,9 g5]al ,att5dance ( witnesses & ! production ( any su* records "u ?is section may be requir$ f any place 9 ! ,unit$ ,/ates4 7,b7 ,failure to obey ,9 case ( contumacy by1 or refusal to obey a subpo5a issu$ to1 any p]son1 includ+ a lic5see1 ! ,secret>y may invoke ! aid ( any c\rt ( ! ,unit$ ,/ates )9 ! jurisdiction ( :i* su* inve/igation or proce$+ is c>ri$ on1 or :]e su* p]son resides or c>ries on bus9ess1 9 requir+ ! att5dance & te/imony ( witnesses & ! production ( books1 pap]s1 & docum5ts1 & su* c\rt may issue an ord] requir+ su* p]son to appe> be=e ! ,dep>tm5t1 !reto produce records1 if s ord]$1 or to give te/imony t\*+ ! matt] "u inve/igation4 7,c7 ,en=cem5t ,any failure to obey su* ord] ( ! c\rt may be puni%$ by su* c\rt z a contempt !re(4 7,d7 ,s]vice ( process ,all process 9 any su* case may be s]v$ 9 ! judicial di/rict :]e( su* p]son is an inhabitant or :]ev] he may be f\nd4 7b7 ,exam9ations 7#a7 ,9 g5]al ,ea* lic5see %all be subject to exam9ations made by direction ( ! ,dep>tm5t1 :i* may be conduct$ ) ! assi/ance ( a private sector entity t has bo? ! qualifications to conduct & exp]tise 9 conduct+ su* exam9ations1 & ! co/ ( su* exam9ations1 includ+ ! comp5sation ( ! exam9]s1 may1 9 ! discretion ( ! ,dep>tm5t1 be assess$ aga9/ ! lic5see exam9$ & :5 s assess$ %all be paid by ! lic5see4 7#b7 ,fees ,fees collect$ "u ?is subsection %all be deposit$ 9 ! acc\nt = sal>ies & exp5ses ( ! ,dep>tm5t1 & are au?oriz$ to be appropriat$ solely to cov] ! co/s ( exam9ations & o!r ov]sight activities "u ?is ,act4 7#c7 ,reports ,e lic5see %all make su* reports to ! ,secret>y at su* times & 9 su* =m z ! ,secret>y may require1 except t ! ,secret>y is au?oriz$ to exempt f mak+ su* reports any su* lic5see t is regi/]$ "u ! ,inve/m5t ,company ,act ( #aidj 7#ae ,u4,s4,c4 #hj;a-#a et seq47 to ! ext5t necess>y to avoid duplication 9 report+ requirem5ts4 7#d7 ,requir$ in=mation 7,a7 ,9 g5]al ,except z provid$ 9 subp>agraph 7,b71 ea* lic5see %all be exam9$ n less frequ5tly ?an once e #b ye>s 9 su* detail s z to det]m9e :e!r or n-- 7i7 ! lic5see has engag$ solely 9 lawful activities & ^? contemplat$ by ?is ,act2 7ii7 ! lic5see has engag$ 9 prohibit$ conflicts ( int]e/ "u section #af2 7iii7 ! lic5see has acquir$ or ex]cis$ illegal control ( a cov]$ bus9ess conc]n2 7iv7 ! lic5see has made inve/m5ts 9 cov]$ bus9esses = n less ?an #a ye>2 7v7 ! lic5see has adh]$ to portfolio div]sification limits z /at$ "u section #i2 7vi7 ! lic5see has engag$ 9 rel5d+1 =eign inve/m5ts1 or passive inve/m5ts2 7vii7 ! lic5see has *>g$ an int]e/ rate 9 excess ( ! maximum p]mitt$ by law2 or 7viii7 ! lic5see has adh]$ to ! requirem5ts to make cov]$ inve/m5ts4 7,b7 ,waiv] ,! ,secret>y may waive any exam9ation requir$ "u subp>agraph 7,a7-- 7i7 = n m ?an #a ye> if1 9 ! discretion ( ! ,secret>y1 ! ,secret>y det]m9es su* a delay w\ld be appropriate1 bas$ on ! am\nt ( deb5tures be+ issu$ by ! lic5see & ! repaym5t record ( ! lic5see1 ! prior op]at+ exp]i5ce ( ! lic5see1 ! cont5ts & results ( ! la/ exam9ation & ! managem5t exp]tise ( ! lic5see2 or 7ii7 if x is ! exam9ation ( a lic5see ^: op]ations h be5 susp5d$ :ile ! lic5see is involv$ 9 litigation or is 9 receiv]%ip4 7c7 ,valuations 7#a7 ,frequ5cy ( valuations 7,a7 ,9 g5]al ,ea* lic5see %all submit to ! ,secret>y a writt5 valuation ( ! loans & inve/m5ts ( ! lic5see n less (t5 ?an semiannually or o!rwise ^u ! reque/ ( ! ,secret>y1 except t any lic5see ) no lev]age out/&+ %all submit su* valuations annually1 unless ! ,secret>y det]m9es o!rwise4 7,b7 ,mat]ial adv]se *anges ,n lat] ?an #cj days aft] ! end ( a fiscal qu>t] ( a lic5see dur+ :i* a mat]ial adv]se *ange 9 ! aggregate valuation ( ! loans & inve/m5ts or op]ations ( ! lic5see occurs1 ! lic5see %all notify ! ,secret>y 9 writ+ ( ! nature & ext5t ( t *ange4 7,c7 ,indep5d5t c]tification 7i7 ,9 g5]al ,n less frequ5tly ?an once dur+ ea* fiscal ye>1 ea* lic5see %all submit to ! ,secret>y ! f9ancial /atem5ts ( ! lic5see1 audit$ by an indep5d5t c]tifi$ public acc\ntant approv$ by ! ,secret>y4 7ii7 ,audit requirem5ts ,ea* audit conduct$ "u clause 7i7 %all include-- 7,i7 a review ( ! proc$ures & docum5tation us$ by ! lic5see 9 prep>+ ! valuations requir$ by ?is section2 & 7,,ii7 a /atem5t by ! indep5d5t c]tifi$ public acc\ntant t su* valuations 7 prep>$ 9 con=mity ) ! valuation crit]ia applicable to ! lic5see e/abli%$ 9 accordance ) p>agraph 7#b74 7#b7 ,valuation crit]ia ,ea* valuation submitt$ "u ?is subsection %all be prep>$ by ! lic5see 9 accordance ) valuation crit]ia1 :i* %all-- 7,a7 be e/abli%$ or approv$ by ! ,secret>y2 & 7,b7 include appropriate safegu>ds to ensure t ! nonca% assets ( a lic5see are n ov]valu$4 #ae4 ,injunctions & o!r ord]s 7a7 ,9 g5]al ,:5ev]1 9 ! judgm5t ( ! ,secret>y1 a lic5see or any o!r p]son has engag$ or is ab\t to engage 9 any acts or practices :i* con/itute or w con/itute a violation ( any provision ( ?is ,act1 or ( any rule or regulation "u ?is ,act1 or ( any ord] issu$ "u ?is ,act1 ! ,secret>y may make application to ! prop] di/rict c\rt ( ! ,unit$ ,/ates or a ,unit$ ,/ates c\rt ( any place subject to ! jurisdiction ( ! ,unit$ ,/ates = an ord] enjo9+ su* acts or practices1 or = an ord] en=c+ compliance ) su* provision1 rule1 regulation1 or ord]1 & su* c\rts %all h jurisdiction ( su* actions &1 ^u a %[+ by ! ,secret>y t su* lic5see or o!r p]son has engag$ or is ab\t to engage 9 any su* acts or practices1 a p]man5t or tempor>y injunction %all be grant$ )\t bond4 7b7 ,exclusive jurisdiction ,9 any proce$+ "u subsection 7a71 ! c\rt z a c\rt ( equity-- 7#a7 may1 to su* ext5t z ! c\rt deems necess>y1 take exclusive jurisdiction ( ! lic5see or lic5sees & ! assets !re(1 :]ev] locat$2 & 7#b7 %all h jurisdiction 9 any su* proce$+ to appo9t a tru/ee or receiv] to hold or adm9i/] "u ! direction ( ! c\rt ! assets s possess$4 7c7 ,tru/ee & receiv]%ip 7#a7 ,au?ority ,! ,secret>y %all h au?ority to act z tru/ee or receiv] ( ! lic5see4 7#b7 ,appo9tm5t ,^u reque/ by ! ,secret>y1 ! c\rt may appo9t ! ,secret>y to act 9 su* capacity unless ! c\rt deems su* appo9tm5t inequitable or o!rwise inappropriate by reason ( ! special circum/ances involv$4 #af4 ,conflicts ( int]e/ 7a7 ,9 g5]al ,= ! purpose ( controll+ conflicts ( int]e/ t may be detrim5tal to cov]$ bus9ess conc]ns1 to lic5sees1 to ! %>ehold]s1 p>tn]s1 or memb]s ( ei!r1 or to ! purposes ( ?is ,act1 ! ,secret>y %all adopt regulations to gov]n transactions ) any (fic]1 director1 %>ehold]1 p>tn]1 or memb] ( any lic5see1 or ) any p]son or conc]n1 9 :i* any int]e/1 direct or indirect1 f9ancial or o!rwise1 is held by any (fic]1 director1 %>ehold]1 p>tn]1 or memb] ( any lic5see1 or any p]son or conc]n ) an int]e/1 direct or indirect1 f9ancial or o!rwise1 9 any lic5see4 7b7 ,public disclosure ,regulations adopt$ "u subsection 7a7 %all include appropriate requirem5ts = public disclosure necess>y to ! purposes ( ?is section4 7c7 ,consultation ) exi/+ regulations ,9 mak+ any initial det]m9ation relat+ to a regulation adopt$ "u subsection 7a71 ! ,secret>y %all consult ! regulations promulgat$ by ! ,adm9i/rator ( ! ,small ,bus9ess ,adm9i/ration on f9anc+ :i* con/itute conflicts ( int]e/ 9 accordance ) section #cab ( ! ,small ,bus9ess ,inve/m5t ,act ( #aieh 7#ae ,u4,s4,c4 #fhg;d74 7d7 ,regulations ,! ,secret>y %all promulgate regulations "u ?is section 9 accordance ) ! implem5tation mile/ones z set =? 9 section #c7l7 ( ?is ,act4 #ag4 ,removal or susp5sion ( managem5t (ficials 7a7 ,def9ition ( managem5t (ficial ,9 ?is section1 ! t]m managem5t (ficial means an (fic]1 director1 g5]al p>tn]1 manag]1 employee1 ag5t1 or o!r p>ticipant 9 ! managem5t or conduct ( ! affairs ( a lic5see4 7b7 ,removal ( managem5t (ficials 7#a7 ,notice ( removal ,! ,secret>y may s]ve ^u any managem5t (ficial a writt5 notice ( its int5tion to remove t managem5t (ficial :5ev]1 9 ! op9ion ( ! ,secret>y-- 7,a7 su* managem5t (ficial-- 7i7 has willfully & kn[+ly committ$ any sub/antial violation (-- 7,i7 ?is ,act2 7,,ii7 any regulation issu$ "u ?is ,act2 or 7,,iii7 a cease-&-desi/ ord] :i* has become f9al2 or 7ii7 has willfully & kn[+ly committ$ or engag$ 9 any act1 omission1 or practice :i* con/itutes a sub/antial brea* ( a fiduci>y duty ( t p]son z a managem5t (ficial2 & 7,b7 ! violation or brea* ( fiduci>y duty is "o involv+ p]sonal di%one/y on ! "p ( su* managem5t (ficial4 7#b7 ,cont5ts ( notice ,a notice ( int5tion to remove a managem5t (ficial1 z provid$ 9 p>agraph 7#a71 %all conta9 a /atem5t ( ! facts con/itut+ gr\nds !re=1 & %all fix a "t & place at :i* a he>+ w be held !reon4 7#c7 ,he>+s 7,a7 ,tim+ ,a he>+ describ$ 9 p>agraph 7#b7 %all be fix$ = a date n e>li] ?an #cj days nor lat] ?an #fj days aft] ! date ( s]vice ( notice ( ! he>+1 unless an e>li] or a lat] date is set by ! ,secret>y at ! reque/ (-- 7i7 ! managem5t (ficial1 & = good cause %[n2 or 7ii7 ! ,attorney ,g5]al ( ! ,unit$ ,/ates4 7,b7 ,cons5t ,unless ! managem5t (ficial %all appe> at a he>+ describ$ 9 ?is p>agraph 9 p]son or by a duly au?oriz$ repres5tative1 t managem5t (ficial %all be deem$ to h cons5t$ to ! issuance ( an ord] ( removal "u p>agraph 7#d77;,a74 7#d7 ,issuance ( ord] ( removal 7,a7 ,9 g5]al ,9 ! ev5t ( cons5t "u p>agraph 7#c77;,b71 or if ^u ! record made at a he>+ describ$ 9 ?is subsection1 ! ,secret>y f9ds t any ( ! gr\nds specifi$ 9 ! notice ( removal has be5 e/abli%$1 ! ,secret>y may issue su* ord]s ( removal f (fice z ! ,secret>y deems appropriate4 7,b7 ,effectiv5ess ,an ord] "u subp>agraph 7,a7 %all-- 7i7 become effective at ! expiration ( #cj days aft] ! date ( s]vice ^u ! subject lic5see & ! managem5t (ficial conc]n$ 7except 9 ! case ( an ord] issu$ ^u cons5t z describ$ 9 p>agraph 7#c77;,b71 :i* %all become effective at ! "t specifi$ 9 su* ord]72 & 7ii7 rema9 effective & en=ceable1 except to su* ext5t z x is /ay$1 modifi$1 t]m9at$1 or set aside by action ( ! ,secret>y or a review+ c\rt 9 accordance ) ?is section4 7c7 ,au?ority ,to susp5d or prohibit p>ticipation 7#a7 ,9 g5]al ,! ,secret>y may1 if ! ,secret>y deems x necess>y = ! protection ( ! lic5see or ! int]e/s ( ! ,dep>tm5t1 susp5d f (fice or prohibit f fur!r p>ticipation 9 any mann] 9 ! managem5t or conduct ( ! affairs ( ! lic5see1 or bo?1 any managem5t (ficial ref]r$ to 9 subsection 7b77#a71 by writt5 notice to su* effect s]v$ ^u ! managem5t (ficial4 7#b7 ,effectiv5ess ,a susp5sion or prohibition "u p>agraph 7#a7-- 7,a7 %all become effective ^u s]vice ( notice "u p>agraph 7#a72 & 7,b7 unless /ay$ by a c\rt 9 proce$+s au?oriz$ by p>agraph 7#c71 %all rema9 9 effect-- 7i7 p5d+ ! completion ( ! adm9i/rative proce$+s pursuant to a notice ( int5tion to remove s]v$ "u subsection 7b72 & 7ii7 until su* "t z ! ,secret>y %all dismiss ! *>ges specifi$ 9 ! notice1 or1 if an ord] ( removal or prohibition is issu$ aga9/ ! managem5t (ficial1 until ! effective date ( any su* ord]4 7#c7 ,judicial review ,n lat] ?an #aj days aft] any managem5t (ficial has be5 susp5d$ f (fice or prohibit$ f p>ticipation 9 ! managem5t or conduct ( ! affairs ( a lic5see1 or bo?1 "u p>agraph 7#a71 t managem5t (ficial may apply to ! ,unit$ ,/ates ,di/rict ,c\rt = ! judicial di/rict 9 :i* ! home (fice ( ! lic5see is locat$1 or ! ,unit$ ,/ates ,di/rict ,c\rt = ! ,di/rict ( ,columbia1 = a /ay ( ! susp5sion or prohibition p5d+ ! completion ( ! adm9i/rative proce$+s pursuant to a notice ( int5t to remove s]v$ ^u ! managem5t (ficial "u subsection 7b71 & su* c\rt %all h jurisdiction to /ay su* action4 7d7 ,au?ority ,to susp5d on crim9al *>ges 7#a7 ,9 g5]al ,:5ev] a managem5t (ficial is *>g$ 9 any in=mation1 indictm5t1 or compla9t au?oriz$ by a ,unit$ ,/ates attorney1 ) ! commission ( or p>ticipation 9 a felony involv+ di%one/y or brea* ( tru/1 ! ,secret>y may1 by writt5 notice s]v$ ^u t managem5t (ficial1 susp5d t managem5t (ficial f (fice or prohibit t managem5t (ficial f fur!r p>ticipation 9 any mann] 9 ! managem5t or conduct ( ! affairs ( ! lic5see1 or bo?4 7#b7 ,effectiv5ess ,a susp5sion or prohibition "u p>agraph 7#a7 %all rema9 9 effect until ! subject in=mation1 indictm5t1 or compla9t is f9ally dispos$ (1 or until t]m9at$ by ! ,secret>y4 7#c7 ,au?ority ^u conviction ,if a judgm5t ( conviction ) respect to an (f5se describ$ 9 p>agraph 7#a7 is ent]$ aga9/ a managem5t (ficial1 !n at su* "t z ! judgm5t is n subject to fur!r appellate review1 ! ,secret>y may issue & s]ve ^u ! managem5t (ficial an ord] remov+ t managem5t (ficial1 :i* removal %all become effective ^u s]vice ( a copy ( ! ord] ^u ! lic5see4 7#d7 ,au?ority ^u dismissal or o!r disposition ,a f9d+ ( n guilty or o!r disposition ( *>ges describ$ 9 p>agraph 7#a7 %all n preclude ! ,secret>y f !reaft] in/itut+ proce$+s to susp5d or remove ! managem5t (ficial f (fice1 or to prohibit ! managem5t (ficial f p>ticipation 9 ! managem5t or conduct ( ! affairs ( ! lic5see1 or bo?1 pursuant to subsection 7b7 or 7c74 7e7 ,notification to lic5sees ,copies ( ea* notice requir$ to be s]v$ on a managem5t (ficial "u ?is section %all also be s]v$ ^u ! int]e/$ lic5see4 7f7 ,proc$ural provisions2 judicial review 7#a7 ,he>+ v5ue ,any he>+ provid$ = 9 ?is section %all be-- 7,a7 held 9 ! ,f$]al judicial di/rict or 9 ! t]ritory 9 :i* ! pr9cipal (fice ( ! lic5see is locat$1 unless ! p>ty af=d$ ! he>+ cons5ts to ano!r place2 & 7,b7 conduct$ 9 accordance ) ! provisions ( *apt] #e ( title #e1 ,unit$ ,/ates ,code4 7#b7 ,issuance ( ord]s ,aft] a he>+ provid$ = 9 ?is section1 & n lat] ?an #ij days aft] ! ,secret>y has notifi$ ! p>ties t ! case has be5 submitt$ = f9al decision1 ! ,secret>y %all r5d] a decision 9 ! matt] 7:i* %all include f9d+s ( fact ^u :i* its decision is pr$icat$71 & %all issue & cause to be s]v$ ^u ea* p>ty to ! proce$+ an ord] or ord]s consi/5t ) ! provisions ( ?is section4 7#c7 ,au?ority to modify ord]s ,! ,secret>y may modify1 t]m9ate1 or set aside any ord] issu$ "u ?is section-- 7,a7 at any "t1 ^u su* notice1 & 9 su* mann] z ! ,secret>y deems prop]1 unless a petition = review is timely fil$ 9 a c\rt ( appeals ( ! ,unit$ ,/ates1 z provid$ 9 p>agraph 7#d77;,b71 & !reaft] until ! record 9 ! proce$+ has be5 fil$ 9 accordance ) p>agraph 7#d77;,c72 & 7,b7 ^u su* fil+ ( ! record1 ) p]mission ( ! c\rt4 7#d7 ,judicial review 7,a7 ,9 g5]al ,judicial review ( an ord] issu$ "u ?is section %all be exclusively z provid$ 9 ?is p>agraph4 7,b7 ,petition = review ,any p>ty to a he>+ provid$ = 9 ?is section may obta9 a review ( any ord] issu$ pursuant to p>agraph 7#b7 7o!r ?an an ord] issu$ ) ! cons5t ( ! managem5t (ficial conc]n$1 or an ord] issu$ "u subsection 7d771 by fil+ 9 ! c\rt ( appeals ( ! ,unit$ ,/ates = ! circuit 9 :i* ! pr9cipal (fice ( ! lic5see is locat$1 or 9 ! ,unit$ ,/ates ,c\rt ( ,appeals = ! ,di/rict ( ,columbia ,circuit1 n lat] ?an #cj days aft] ! date ( s]vice ( su* ord]1 a writt5 petition pray+ t ! ord] ( ! ,secret>y be modifi$1 t]m9at$1 or set aside4 7,c7 ,notification to ,dep>tm5t ,a copy ( a petition fil$ "u subp>agraph 7,b7 %all be =?) transmitt$ by ! cl]k ( ! c\rt to ! ,secret>y1 & !reupon ! ,secret>y %all file 9 ! c\rt ! record 9 ! proce$+1 z provid$ 9 section #baab ( title #bh1 ,unit$ ,/ates ,code4 7,d7 ,c\rt jurisdiction ,^u ! fil+ ( a petition "u subp>agraph 7,a7-- 7i7 ! c\rt %all h jurisdiction1 :i*1 ^u ! fil+ ( ! record "u subp>agraph 7,c71 %all be exclusive1 to affirm1 modify1 t]m9ate1 or set aside1 9 :ole or 9 "p1 ! ord] ( ! ,secret>y2 7ii7 review ( su* proce$+s %all be _h z provid$ 9 *apt] #g ( title #e1 ,unit$ ,/ates ,code2 & 7iii7 ! judgm5t & decree ( ! c\rt %all be f9al1 except t ! judgm5t & decree %all be subject to review by ! ,supreme ,c\rt ( ! ,unit$ ,/ates ^u c]tior>i1 z provid$ 9 section #abed ( title #bh1 ,unit$ ,/ates ,code4 7,e7 ,judicial review n a /ay ,! comm5cem5t ( proce$+s = judicial review "u ?is p>agraph %all n1 unless specifically ord]$ by ! c\rt1 op]ate z a /ay ( any ord] issu$ by ! ,secret>y "u ?is section4 #ah4 ,unlawful acts & omissions by (fic]s1 directors1 employees1 or ag5ts2 brea* ( fiduci>y duty 7a7 ,9 g5]al ,:]ev] a lic5see violates any provision ( ?is ,act or regulation issu$ !reund] by reason ( ! failure ( ! lic5see to comply ) ! t]ms !re( or by reason ( ! lic5see engag+ 9 any act or practice :i* con/itutes or w con/itute a violation !re(1 su* violation %all be deem$ to be also a violation & an unlawful act on ! "p ( any p]son :o1 directly or indirectly1 au?orizes1 ord]s1 p>ticipates 91 or causes1 br+s ab\t1 c\nsels1 aids1 or abets 9 ! commission ( any acts1 practices1 or transactions :i* con/itute or w con/itute1 9 :ole or 9 "p1 su* violation4 7b7 ,unlawful acts 7#a7 ,prohibition ,x %all be unlawful = any (fic]1 director1 employee1 ag5t1 or o!r p>ticipant 9 ! managem5t or conduct ( ! affairs ( a lic5see to engage 9 any act or practice1 or to omit any act1 9 brea* ( 8 fiduci>y duty z su* (fic]1 director1 employee1 ag5t1 or p>ticipant1 if1 z a result !re(1 ! lic5see has suff]$ or is 9 imm95t dang] ( suff]+ f9ancial loss or o!r damage4 7#b7 ,specific acts & omissions ,except ) ! writt5 cons5t ( ! ,secret>y1 x %all be unlawful-- 7,a7 = any p]son h]eaft] to take (fice z an (fic]1 director1 or employee ( a lic5see1 or to become an ag5t or p>ticipant 9 ! conduct ( ! affairs or managem5t ( a lic5see1 if-- 7i7 ! p]son has be5 convict$ ( a felony1 or any o!r crim9al (f5se involv+ di%one/y or brea* ( tru/2 or 7ii7 ! p]son has be5 f\nd civilly liable 9 damages1 or has be5 p]man5tly or tempor>ily enjo9$ by an ord]1 judgm5t1 or decree ( a c\rt ( compet5t jurisdiction1 by reason ( any act or practice involv+ fraud or brea* ( tru/2 or 7,b7 = any p]son to cont9ue to s]ve 9 any ( ! above describ$ capacities1 if-- 7i7 ! p]son is h]eaft] convict$ ( a felony1 or any o!r crim9al (f5se involv+ di%one/y or brea* ( tru/2 or 7ii7 ! p]son is h]eaft] f\nd civilly liable 9 damages or is p]man5tly or tempor>ily enjo9$ by an ord]1 judgm5t1 or decree ( a c\rt ( compet5t jurisdiction1 by reason ( any act or practice involv+ fraud or brea* ( tru/4 #ai4 ,p5alties & =feitures 7a7 ,p5alties 7#a7 ,9 g5]al ,except z provid$ 9 subsection 7b71 a lic5see t violates any regulation or writt5 directive issu$ by ! ,secret>y issu$ "u ?is ,act1 requir+ ! fil+ ( any regul> or special report pursuant to section #ab1 %all =feit & pay to ! ,unit$ ,/ates a civil p5alty ( n m ?an #ajj = ea* day ( ! cont9uance ( ! failure by ! lic5see to file su* report1 unless x is %[n t su* failure is due to reasonable cause & n due to willful neglect4 7#b7 ,accrual ,any civil p5alty "u p>agraph 7#a7 %all accrue to ! ,unit$ ,/ates & may be recov]$ 9 a civil action br\ght by ! ,secret>y4 7b7 ,en=cem5t ,! ,secret>y may-- 7#a7 by rules & regulations1 or ^u application ( an int]e/$ p>ty1 at any "t previ\s to su* failure1 by ord]1 aft] notice & opportunity = he>+1 exempt 9 :ole or 9 "p1 any lic5see f ! provisions ( subsection 7a7 ( ?is section1 ^u su* t]ms & conditions & = su* p]iod ( "t z ! ,secret>y deems necess>y & appropriate1 if ! ,secret>y funds t su* action is n inconsi/5t ) ! public int]e/ or ! protection ( ! ,dep>tm5t2 & 7#b7 = ! purposes ( ?is section make any alt]native requirem5ts appropriate to ! situation4 #bj4 ,jurisdiction & s]vice ( process ,any suit or action br\ght "u section #ac1 #ae1 #ag1 #ai1 or #bc by ! ,dep>tm5t at law or 9 equity to en=ce any liability or duty creat$ by1 or to enjo9 any violation ( ?is ,act1 or any rule1 regulation1 or ord] promulgat$ !reund]1 %all be br\ght 9 ! di/rict :]e9 ! lic5see ma9ta9s its pr9cipal (fice1 & process 9 su* cases may be s]v$ 9 any di/rict 9 :i* ! def5dant ma9ta9s its pr9cipal (fice or transacts bus9ess1 or :]ev] ! def5dant may be f\nd4 #ba4 ,issuance & gu>antee ( tru/ c]tificates 7a7 ,au?ority ,to issue tru/ c]tificates ,! ,secret>y may issue tru/ c]tificates repres5t+ own]%ip ( all or a fractional "p ( deb5tures issu$ by lic5sees & gu>ante$ by ! ,dep>tm5t "u ?is ,act1 provid$ t ! tru/ c]tificates %all be bas$ on & back$ by a tru/ or pool approv$ by ! ,secret>y & compos$ solely ( gu>ante$ deb5tures4 7b7 ,gu>antee au?ority 7#a7 ,9 g5]al ,! ,secret>y may1 ^u su* t]ms & conditions z are deem$ appropriate1 to gu>antee ! timely paym5t ( ! pr9cipal ( & int]e/ on tru/ c]tificates issu$ by ! ,dep>tm5t or its ag5t = purposes ( ?is section4 7#b7 ,limitation ,su* gu>antee %all be limit$ to ! ext5t ( pr9cipal & int]e/ on ! gu>ante$ deb5tures :i* compose ! tru/ or pool4 7#c7 ,r$uction ( gu>antee ,9 ! ev5t t a deb5ture 9 su* tru/ or pool is prepaid1 ei!r volunt>ily or involunt>ily1 or 9 ! ev5t ( default ( a deb5ture1 ! gu>antee ( timely paym5t ( pr9cipal & int]e/ on ! tru/ c]tificates %all be r$uc$ 9 proportion to ! am\nt ( pr9cipal & int]e/ su* prepaid deb5ture & priority paym5ts repres5t 9 ! tru/ or pool4 7#d7 ,int]e/ ,int]e/ on prepaid or default$ deb5tures %all accrue & be gu>ante$ by ! ,dep>tm5t only ?r\gh ! date ( paym5t on ! gu>antee4 7#e7 ,r$emption ,dur+ ! t]m ( ! tru/ c]tificate1 x may be call$ = r$emption due to prepaym5t or default ( all deb5tures4 7c7 ,full fai? & cr$it ,! full fai? & cr$it ( ! ,unit$ ,/ates is pl$g$ to ! paym5t ( all am\nts t may be requir$ to be paid "u any gu>antee ( su* tru/ c]tificates issu$ by ! ,secret>y pursuant to ?is section4 7d7 ,fees ,! ,secret>y may n collect a fee = any gu>antee "u ?is section1 provid$ t no?+ h]e9 %all preclude any ag5t ( ! ,dep>tm5t f collect+ a fee approv$ by ! ,dep>tm5t = ! functions describ$ 9 subsection 7f77#b74 7e7 ,rights ( ! ,dep>tm5t 7#a7 ,subrogation ,9 ! ev5t ! ,secret>y pays a claim "u a gu>antee issu$ "u ?is section1 x %all be subrogat$ fully to ! rights satisfi$ by su* paym5t4 7#b7 ,own]%ip rights ,no ,/ate or local law1 & no ,f$]al law1 %all preclude or limit ! ex]cise by ! ,secret>y ( ! own]%ip rights ( ! ,secret>y 9 ! deb5tures resid+ 9 a tru/ or pool aga9/ :i* tru/ c]tificates are issu$4 7f7 ,responsibilities 7#a7 ,regi/ration ,! ,secret>y %all provide = a c5tral regi/ration ( all tru/ c]tificates sold pursuant to ?is section4 7#b7 ,contracts ,! ,secret>y %all contract ) an ag5t or ag5ts to c>ry out1 on behalf ( ! ,dep>tm5t1 ! pool+ & ! c5tral regi/ration functions ( ?is section includ+1 not)/&+ any o!r provision ( law1 ma9t5ance on behalf ( & "u ! direction ( ! ,dep>tm5t1 su* comm]cial bank acc\nts or inve/m5ts 9 obligations ( ! ,unit$ ,/ates z may be necess>y to facilitate tru/s or pools back$ by gu>ante$ "u ?is ,act1 & ! issuance ( tru/ c]tificates to facilitate su* pool+s4 ,su* ag5t or ag5ts %all provide a fidelity bond or insurance 9 su* am\nts z ! ,secret>y det]m9es to be necess>y to fully protect ! int]e/s ( ! ,gov]nm5t4 7#c7 ,disclosures ,be=e any sale ( a tru/ c]tificate1 ! ,secret>y %all require ! sell] to disclose to a pur*as] ( a tru/ c]tificate issu$ pursuant to ?is section1 in=mation on ! t]ms1 conditions1 & yield ( su* in/rum5t4 7#d7 ,regulation ( brok]s & deal]s ,! ,secret>y is au?oriz$ to regulate brok]s & deal]s 9 tru/ c]tificates sold pursuant to ?is section4 7#e7 ,rule ( con/ruction ,no?+ 9 ?is subsection %all prohibit ! use ( a book5try or o!r electronic =m ( regi/ration = tru/ c]tificates4 #bb4 ,p]iodic issuance ( gu>antees & tru/ c]tificates ,! ,secret>y %all issue gu>antees "u section #g & tru/ c]tificates "u section #ba at p]iodic int]vals ( n less ?an e #ab mon?s & %all d s at su* %ort] int]vals z ! ,secret>y deems appropriate1 tak+ into consid]ation ! am\nt & numb] ( su* gu>antees or tru/ c]tificates4 #bc4 ,miscellane\s 7a7 ,coop]ation ) banks1 inve/ors1 & l5d]s ,:5ev] practicable1 ! op]ations ( an own]%ip inve/m5t company1 includ+ ! g5]ation ( bus9ess1 may be und]tak5 9 coop]ation ) banks or o!r inve/ors or l5d]s1 incorporat$ or un9corporat$1 & any s]vic+ or initial inve/igation requir$ = loans or acquisitions ( securities by ! company "u ! provisions ( ?is ,act may be h&l$ ?r\gh su* banks or o!r inve/ors or l5d]s on a fee basis4 ,any own]%ip inve/m5t company may receive fees = s]vices r5d]$ to su* banks & o!r inve/ors & l5d]s4 7b7 ,regulations ,! ,secret>y is au?oriz$ to prescribe regulations gov]n+ ! op]ations ( own]%ip inve/m5t companies1 & to c>ry out ! provisions ( ?is ,act1 9 accordance ) ! purposes ( ?is ,act4 7c7 ,dissolution or =feiture ( rights ,%\ld any own]%ip inve/m5t company violate or fail to comply ) any ( ! provisions ( ?is ,act or ( regulations prescrib$ h]eund]1 all ( ! rights1 privileges1 & fran*ises d]iv$ !refrom may !reby be =feit$4 ,be=e any su* own]%ip inve/m5t company %all be decl>$ dissolv$1 or its rights1 privileges1 & fran*ises =feit$1 any noncompliance ) or violation ( ?is ,act %all be det]m9$ & adjudg$ by a c\rt ( ! ,unit$ ,/ates ( compet5t jurisdiction 9 a suit br\ght = t purpose 9 ! di/rict1 t]ritory1 or o!r place subject to ! jurisdiction ( ! ,unit$ ,/ates1 9 :i* ! pr9cipal (fice ( ! own]%ip inve/m5t company is locat$4 ,any su* suit %all be br\ght by ! ,unit$ ,/ates at ! in/ance ( ! ,secret>y or ! ,attorney ,g5]al4 7d7 ,liability ,except z expressly provid$ o!rwise 9 ?is ,act1 no?+ 9 ?is ,act or 9 any o!r provision ( law %all be deem$ to impose any liability on ! ,unit$ ,/ates ) respect to any obligations ent]$ into1 or /ocks issu$1 or commitm5ts made1 by any company op]at+ "u ! provisions ( ?is ,act4