---
kind: "section"
citation: "15 U.S.C. § 687b"
title: "15"
title_heading: "Commerce and Trade"
number: "687b"
heading: "Investigations and examinations; power to subpena and take oaths and affirmations; aid of courts; examiners; reports"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/687b"
units:
  - "Chapter 14B — Small Business Investment Program"
  - "Subchapter III — Investment Division Programs"
  - "Part A — Small Business Investment Companies"
---

# §687b. Investigations and examinations; power to subpena and take oaths and affirmations; aid of courts; examiners; reports

- (a) **Investigation of violations—** The [Administration](/usc/15/662.md?p=1) may make such investigations as it deems necessary to determine whether a [licensee](/usc/15/662.md?p=3) or any other [person](/usc/15/7a.md?p=6) has engaged or is about to engage in any acts or practices which constitute or will constitute a violation of any provision of this chapter, or of any rule or regulation under this chapter, or of any order issued under this chapter. The [Administration](/usc/15/662.md?p=1) shall permit any [person](/usc/15/7a.md?p=6) to file with it a statement in writing, under oath or otherwise as the [Administration](/usc/15/662.md?p=1) shall determine, as to all the facts and circumstances concerning the matter to be investigated. For the purpose of any investigation, the [Administration](/usc/15/662.md?p=1) is empowered to administer oaths and affirmations, subpena witnesses, compel their attendance, take evidence, and require the production of any books, papers, and documents which are relevant to the inquiry. Such attendance of witnesses and the production of any such records may be required from any place in the United States. In case of contumacy by, or refusal to obey a subpena issued to, any [person](/usc/15/7a.md?p=6), including a [licensee](/usc/15/662.md?p=3), the [Administration](/usc/15/662.md?p=1) 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](/usc/15/7a.md?p=6) 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](/usc/15/7a.md?p=6) to appear before the [Administration](/usc/15/662.md?p=1), there to 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](/usc/15/7a.md?p=6) is an inhabitant or wherever he may be found.
- (b) **Examinations and reports—** Each [small business investment company](/usc/15/662.md?p=3) shall be subject to examinations made by direction of the Investment Division of the [Administration](/usc/15/662.md?p=1), 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 [Administration](/usc/15/662.md?p=1) be assessed against the [company](/usc/15/662.md?p=3) examined and when so assessed shall be paid by such [company](/usc/15/662.md?p=3). Fees collected under this subsection shall be deposited in the account for salaries and expenses of the [Administration](/usc/15/662.md?p=1), and are authorized to be appropriated solely to cover the costs of examinations and other program oversight activities. Every such [company](/usc/15/662.md?p=3) shall make such reports to the [Administration](/usc/15/662.md?p=1) at such times and in such form as the [Administration](/usc/15/662.md?p=1) may require; except that the [Administration](/usc/15/662.md?p=1) is authorized to exempt from making such reports any such [company](/usc/15/662.md?p=3) which is registered under the Investment Company Act of 1940 [[15 U.S.C. 80a–1](/usc/15/80a–1.md) et seq.] to the extent necessary to avoid duplication in reporting requirements.
- (c) **Examinations of small business investment companies—** Each [small business investment company](/usc/15/662.md?p=3) shall be examined at least every two years in such detail so as to determine whether or not—
  - (1) it has engaged solely in lawful activities and those contemplated by this subchapter;
  - (2) it has engaged in prohibited conflicts of interest;
  - (3) it has acquired or exercised illegal control of an assisted small business;
  - (4) it has made investments in small businesses for not less than 1 year;
  - (5) it has invested more than 20 per centum of its capital in any individual small business, if such restriction is applicable;
  - (6) it has engaged in relending, foreign investments, or passive investments; or
  - (7) it has charged an interest rate in excess of the maximum permitted by law:
- (d) **Valuations—**
  - (1) **Frequency of valuations—**
    - (A) **In general—** Each [licensee](/usc/15/662.md?p=3) shall submit to the [Administrator](/usc/15/662.md?p=2) a written valuation of the loans and investments of the [licensee](/usc/15/662.md?p=3) not less often than semiannually or otherwise upon the request of the [Administrator](/usc/15/662.md?p=2), except that any [licensee](/usc/15/662.md?p=3) with no [leverage](/usc/15/662.md?p=10) outstanding shall submit such valuations annually, unless the [Administrator](/usc/15/662.md?p=2) determines otherwise.
    - (B) **Material adverse changes—** Not later than 30 days after the end of a fiscal quarter of a [licensee](/usc/15/662.md?p=3) during which a material adverse change in the aggregate valuation of the loans and investments or operations of the [licensee](/usc/15/662.md?p=3) occurs, the [licensee](/usc/15/662.md?p=3) shall notify the [Administrator](/usc/15/662.md?p=2) in writing of the nature and extent of that change.
    - (C) **Independent certification—**
      - (i) **In general—** Not less than once during each fiscal year, each [licensee](/usc/15/662.md?p=3) shall submit to the [Administrator](/usc/15/662.md?p=2) the financial statements of the [licensee](/usc/15/662.md?p=3), audited by an independent certified public accountant approved by the [Administrator](/usc/15/662.md?p=2).
      - (ii) **Audit requirements—** Each audit conducted under [clause (i)](#d-1-C-i) shall include—
        - (I) a review of the procedures and documentation used by the [licensee](/usc/15/662.md?p=3) in preparing the valuations required by this section; and
        - (II) a statement by the independent certified public accountant that such valuations were prepared in conformity with the valuation criteria applicable to the [licensee](/usc/15/662.md?p=3) established in accordance with [paragraph (2)](#d-2).
  - (2) **Valuation criteria—** Each valuation submitted under this subsection shall be prepared by the [licensee](/usc/15/662.md?p=3) in accordance with valuation criteria, which shall—
    - (A) be established or approved by the [Administrator](/usc/15/662.md?p=2); and
    - (B) include appropriate safeguards to ensure that the noncash assets of a [licensee](/usc/15/662.md?p=3) are not overvalued.

## Source credit

(Pub. L. 85–699, title III, § 310, as added Pub. L. 87–341, § 9, Oct. 3, 1961, 75 Stat. 755; amended Pub. L. 89–779, § 5, Nov. 6, 1966, 80 Stat. 1360; Pub. L. 90–104, title II, § 208, Oct. 11, 1967, 81 Stat. 271; Pub. L. 100–590, title I, § 104, Nov. 3, 1988, 102 Stat. 2992; Pub. L. 102–366, title IV, §§ 406(b), 407(a), 408(b), Sept. 4, 1992, 106 Stat. 1016; Pub. L. 104–208, div. D, title II, § 208(f), (h)(1)(C), Sept. 30, 1996, 110 Stat. 3009–745, 3009–747; Pub. L. 105–135, title II, § 216, Dec. 2, 1997, 111 Stat. 2603; Pub. L. 106–554, § 1(a)(9) [title IV, § 406], Dec. 21, 2000, 114 Stat. 2763, 2763A–691.)

## Notes

### Editorial Notes

### 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.

The Investment Company Act of 1940, referred to in subsec. (b), is title I of act Aug. 22, 1940, ch. 686, 54 Stat. 789, which is classified generally to subchapter I (§ 80a–1 et seq.) of chapter 2D of this title. For complete classification of this Act to the Code, see section 80a–51 of this title and Tables.

### Amendments

2000—Subsec. (c)(4). Pub. L. 106–554 substituted “1 year” for “five years”.

1997—Subsec. (b). Pub. L. 105–135 inserted after first sentence “Fees collected under this subsection shall be deposited in the account for salaries and expenses of the Administration, and are authorized to be appropriated solely to cover the costs of examinations and other program oversight activities.”

1996—Subsec. (b). Pub. L. 104–208, § 208(f)(1), inserted “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,” after “Investment Division of the Administration,” in first sentence.

Subsec. (c)(4). Pub. L. 104–208, § 208(h)(1)(C), struck out “not less than four years in the case of section 301(d) licensees and in all other cases,” after “small businesses for”.

Subsec. (d). Pub. L. 104–208, § 208(f)(2), inserted heading and amended text of subsec. (d) generally. Prior to amendment, text read as follows: “Each small business investment company shall adopt written guidelines for determination of the value of investments made by such company. The board of directors of corporations and the general partners of partnerships shall have the sole responsibility for making a good faith determination of the fair market value of the investments made by such company. Determinations shall be made and reported to the Administration not less than semiannually or at more frequent intervals as the Administration determines appropriate: Provided, That any company which does not have outstanding financial assistance under the provisions of this subchapter shall be required to make such determinations and reports to the Administration annually, unless the Administration, in its discretion, determines otherwise.”

1992—Subsec. (b). Pub. L. 102–366, § 407(a), substituted “Investment Division of” for “Administration by examiners selected or approved by”.

Subsec. (c)(5). Pub. L. 102–366, § 408(b), inserted before semicolon at end “, if such restriction is applicable”.

Subsec. (d). Pub. L. 102–366, § 406(b), added subsec. (d).

1988—Subsec. (b). Pub. L. 100–590 struck out second sentence, which read as follows: “Each such company shall be examined at least once each year, except that the Administrator may waive examination in the case of a company whose operations have been suspended by reason of the fact that the company is involved in litigation or is in receivership.”

Subsec. (c). Pub. L. 100–590 added subsec. (c).

1967—Subsec. (b). Pub. L. 90–104 required at least annual examination of small business investment companies but provided for waiver of examination of a company whose operations have been suspended because the company is involved in litigation or is in receivership.

1966—Pub. L. 89–779 designated existing provisions as subsec. (a) and added subsec. (b).

### Statutory Notes and Related Subsidiaries

### Effective Date of 1997 Amendment

Amendment by Pub. L. 105–135 effective Oct. 1, 1997, see section 3 of Pub. L. 105–135, set out as a note under section 631 of this title.

### Effective Date of 1967 Amendment

Amendment by Pub. L. 90–104 effective 90 days after Oct. 11, 1967, see section 211 of Pub. L. 90–104, set out as a note under section 681 of this title.

### Effect of Small Business Equity Enhancement Act of 1992 on Securities Laws

Nothing in amendment by Pub. L. 102–366 to be construed to affect applicability of securities laws or to otherwise supersede or limit jurisdiction of Securities and Exchange Commission, see section 418 of Pub. L. 102–366, set out as a note under section 661 of this title.

### Transfer of Resources

Pub. L. 102–366, title IV, § 407(b), Sept. 4, 1992, 106 Stat. 1016, provided that: “Effective October 1, 1992, the personnel, assets, liabilities, contracts, property, records, and unexpended balances of appropriations, authorizations, and other funds employed, held, used, arising from, available or to be made available, which are related to the examination function provided by section 310 of the Small Business Investment Act of 1958 [15 U.S.C. 687b] shall be transferred by the Inspector General of the Small Business Administration to the Investment Division of the Small Business Administration.”