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Code · BILL · 119th Congress · H.R. 3248 (Introduced in House) — To establish a domestic ownership succession investment facility, and for other purposes. · Sec. 14

Sec. 14. Examinations and investigations

943 words·~4 min read·/bill/119/hr/3248/ih/section-14

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The Secretary may make such investigations as the Secretary deems necessary to determine whether 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 Secretary shall permit any person to file with it a statement in writing, under oath or otherwise as the Secretary shall determine, as to all the facts and circumstances concerning the matter to be investigated.
For the purpose of any investigation under this subsection, the Secretary is empowered to— administer oaths and affirmations; subpoena witnesses; compel the attendance of witnesses; take evidence; and require the production of any books, papers, and documents that are relevant to the inquiry. Attendance of witnesses and the production of any such records under this section may be required from any place in the United States. In case of contumacy by, or refusal to obey a subpoena issued to, any person, including a licensee, the Secretary may invoke the aid of any court of the United States within the jurisdiction of which such investigation or proceeding is carried on, or where such person resides or carries on business, in requiring the attendance and testimony of witnesses and the production of books, papers, and documents, and such court may issue an order requiring such person to appear before the Department, thereto produce records, if so ordered, or to give testimony touching the matter under investigation.
Any failure to obey such order of the court may be punished by such court as a contempt thereof. All process in any such case may be served in the judicial district whereof such person is an inhabitant or wherever he may be found. Each licensee shall be subject to examinations made by direction of the Department, 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 Department, be assessed against the licensee examined and when so assessed shall be paid by the licensee.
Fees collected under this subsection shall be deposited in the account for salaries and expenses of the Department, and are authorized to be appropriated solely to cover the costs of examinations and other oversight activities under this Act. Every licensee shall make such reports to the Secretary at such times and in such form as the Secretary may require, except that the Secretary is authorized to exempt from making such reports any such licensee that is registered under the Investment Company Act of 1940 ( 15 U.S.C. 80a–1 et seq. ) to the extent necessary to avoid duplication in reporting requirements.
Except as provided in subparagraph (B), each licensee shall be examined not less frequently than once every 2 years in such detail so as to determine whether or not— the licensee has engaged solely in lawful activities and those contemplated by this Act; the licensee has engaged in prohibited conflicts of interest under section 16; the licensee has acquired or exercised illegal control of a covered business concern; the licensee has made investments in covered businesses for not less than 1 year; the licensee has adhered to portfolio diversification limits as stated under section 9; the licensee has engaged in relending, foreign investments, or passive investments; the licensee has charged an interest rate in excess of the maximum permitted by law; or the licensee has adhered to the requirements to make covered investments.
The Secretary may waive any examination required under subparagraph (A)— for not more than 1 year if, in the discretion of the Secretary, the Secretary determines such a delay would be appropriate, based on the amount of debentures being issued by the licensee and the repayment record of the licensee, the prior operating experience of the licensee, the contents and results of the last examination and the management expertise of the licensee; or if it is the examination of a licensee whose operations have been suspended while the licensee is involved in litigation or is in receivership.
Each licensee shall submit to the Secretary a written valuation of the loans and investments of the licensee not less often than semiannually or otherwise upon the request of the Secretary, except that any licensee with no leverage outstanding shall submit such valuations annually, unless the Secretary determines otherwise. Not later than 30 days after the end of a fiscal quarter of a licensee during which a material adverse change in the aggregate valuation of the loans and investments or operations of the licensee occurs, the licensee shall notify the Secretary in writing of the nature and extent of that change.
Not less frequently than once during each fiscal year, each licensee shall submit to the Secretary the financial statements of the licensee, audited by an independent certified public accountant approved by the Secretary. Each audit conducted under clause
(i)shall include— a review of the procedures and documentation used by the licensee in preparing the valuations required by this section; and 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). Each valuation submitted under this subsection shall be prepared by the licensee in accordance with valuation criteria, which shall— be established or approved by the Secretary; and include appropriate safeguards to ensure that the noncash assets of a licensee are not overvalued.
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  • 15 USC 80a–1
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Sec. 14
Examinations and investigations
Cite15 USC 80a–1
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