Title 7

SECTION 4290.3025

4290.3025 Managing the Operations of a RBIC.

§ 4290.3025 Managing the Operations of a RBIC.

(a) Nonperformance. In addition to the provisions specified in § 4290.507, failure of an approved Non-leveraged RBIC to maintain sound investment practice, as determined by the Agency, may result in loss of approval for participating in this program.

(b) Employment of USDA or SBA officials. Paragraph (a)(2) of § 4290.509 does not apply to Non-leveraged RBICs.

(c) Approval of RBIC's Investment Adviser/Manager. In addition to complying with § 4290.510, a Non-leveraged RBIC must notify the Agency 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.

(d) Management Expenses of a RBIC. When complying with § 4290.520, Non-leveraged RBICs do not need prior approval of initial Management Expenses and any increases in those expenses.

(e) Restrictions on investments of idle funds by RBICs. The provisions of § 4290.530 apply to Non-leveraged RBICs only when the Non-leveraged RBIC engages in activities not contemplated by the Act.

(f) Prior approval of secured third-party debt of RBICs. The provisions of § 4290.550 do not apply to Non-leveraged RBICs.

(g) Voluntary decrease in Regulatory Capital. When complying with § 4290.585, Non-leveraged RBICs do not need to obtain prior approval for decreases in Regulatory Capital of more than 2 percent (but not below the minimum required under this Act or these regulations). However, Non-leveraged RBICs must report the reduction to the Agency within 30 days.

---