§ 107.1000. Non-leveraged Licensees---exceptions to this part.
352 words·~2 min read·
/us/cfr/t13/s§ 107.1000·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
The regulatory exceptions in this section apply to Non-leveraged Licensees.
(a)You are exempt from the following provisions (but you must come into compliance with them to become eligible for Leverage):
(1)The overline limitation in § 107.740.
(2)The restrictions in § 107.530 on investments of idle funds, provided you do not engage in activities not contemplated by the Act.
(3)The restrictions in § 107.550 on third-party debt.
(4)The restrictions in § 107.880 on expenses incurred to maintain or improve assets acquired in liquidation of Portfolio securities.
(5)The recordkeeping requirements and fee limitations in § 107.825
(b)and (c), respectively, for securities purchased through or from an underwriter.
(b)You are exempt from the requirements to obtain SBA's prior approval for:
(1)A decrease in your Regulatory Capital of more than two percent under § 107.585 (but not below the minimum required under the Act or these regulations). You must report the reduction to SBA within 30 days.
(2)Disposition of any asset to your Associate under § 107.885.
(3)A contract to employ an Investment Adviser/Manager under § 107.510. However, you must notify SBA of the Management Expenses to be incurred under such contract, or of any subsequent material changes in such Management Expenses, within 30 days of execution. In order to become eligible for Leverage, you must have the contract approved by SBA.
(4)Your initial Management Expenses under § 107.140 and increases in your Management Expenses under § 107.520. However, you must have your Management Expenses approved by SBA in order to become eligible for Leverage.
(5)Options obtained from a Small Business by your management or employees under § 107.815(b).
(c)You are exempt from the requirement in § 107.680 to obtain SBA's post approval of new directors and new officers, other than your chief operating officer. However, you must notify SBA of the new directors or officers within 30 days, and you must have all directors and officers approved by SBA in order to become eligible for Leverage. \[61 FR 3189, Jan. 31, 1996, as amended at 88 FR 46012, July 18, 2023\]