Federal Register / Vol. 80, No. 7 / Monday, January 12, 2015 / Notices 1575 

21 15 U.S.C. 78s(b)(2)(B). 22 17 CFR 200.30–3(a)(12). 

under Section 19(b)(2)(B)21 of the Act to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSE–2014–70 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F 

Street, NE., Washington, DC 20549– 

1090. 

All submissions should refer to File 

Number SR–NYSE–2014–70. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Section, 100 F Street NE., 

Washington, DC 20549–1090, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing will also be available for 

inspection and copying at the NYSE’s 

principal office and on its Internet Web 

site at www.nyse.com. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–NYSE– 

2014–70 and should be submitted on or 

before February 2, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–00216 Filed 1–9–15; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

Small Business Investment 

Companies—Early Stage SBICs 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Call for Early Stage Fund 

Managers. 

SUMMARY: This call for proposals 

(‘‘Call’’) invites experienced early stage 

fund managers to submit the 

preliminary materials discussed in 

Section II below, in the form of the 

Small Business Investment Company 

(‘‘SBIC’’) Management Assessment 

Questionnaire (‘‘MAQ’’), for 

consideration by the Small Business 

Administration (‘‘SBA’’) to be licensed 

as Early Stage Small Business 

Investment Companies. Licensed Early 

Stage SBICs may receive SBAguaranteed debenture leverage of up to 

100 percent of their Regulatory Capital, 

up to a maximum of $50 million. 

However, Early Stage SBICs may request 

less than 100 percent of their Regulatory 

Capital. Importantly, Early Stage SBICs 

must invest at least 50% of their 

investment dollars in early stage small 

businesses. For the purposes of this 

initiative, an ‘‘early stage’’ business is 

one that has never achieved positive 

cash flow from operations in any fiscal 

year. By licensing and providing SBA 

guaranteed leverage to Early Stage 

SBICs, SBA seeks to expand 

entrepreneurs’ access to capital and 

encourage innovation as part of 

President Obama’s Start-Up America 

Initiative launched on January 31, 2011. 

More information on the Early Stage 

SBIC Initiative and the regulations 

governing these SBICs may be found at 

www.sba.gov/inv/earlystage. 

DATES: The following table provides the 

key milestones for the Early Stage SBIC 

Initiative. 

Milestones Dates/Times 

Question and Answer Period Closed ....................................................... 5 p.m. Eastern Time (‘‘EST’’) on February 27, 2015. 

Initial Review Period 

Management Assessment Questionnaires (‘‘MAQs’’) Due ...................... 5 p.m. EST—February 27, 2015. 

Interview Period ........................................................................................ April 20, 2015—May 1, 2015. 

Anticipated Green Light Decision ............................................................. May 7, 2015. 

Licensing Periods 

For funds seeking a license in FY 2015 .................................................. 5 p.m. EST June 5, 2015. 

Anticipated Licensing Date for FY 2015 funds ........................................ No later than September 30, 2015. 

All other funds have 12 months from issuance of a Green Light to submit their license application.Applications considered as they are received. 

Notes: 

• SBA reserves the right to extend its interview, due diligence, committee, and approval timelines as appropriate. SBA will update its website 

at www.sba.gov/inv/earlystage should these dates change. Applicants will be notified by e-mail should these dates change. 

• SBA expects to issue additional calls for Early Stage Fund Managers on an annual basis. SBA will announce these calls via a call notice in 

the Federal Register. 

ADDRESSES: Visit https://www.sba.gov/

content/application-forms to download 

a copy of the Management Assessment 

Questionnaire (the ‘‘MAQ’’). You must 

submit via express or next day delivery 

service (i) the relevant MAQ signature 


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pages and (ii) the completed MAQ on a 

CD–ROM in Word and Excel format to 

the following: Scott Schaefer, Senior 

Investment Officer, Office of Investment 

and Innovation, U.S. Small Business 

Administration, 409 3rd St. SW., Suite 

#6300, Washington, DC 20416. SBA will 

not accept MAQs in .pdf format or 

MAQs delivered via regular mail (due to 

irradiation requirements), or hand 

delivery or courier service. 

SUPPLEMENTARY INFORMATION: 

I. Background Information 

SBA invites early stage fund managers 

to submit the preliminary materials, as 

discussed in Section II below, in the 

form of a Management Assessment 

Questionnaire (‘‘MAQ’’) for the 

formation and management of an Early 

Stage SBIC. In 2012, SBA introduced the 

Early Stage Initiative. Early Stage SBICs 

represent a new sub-category of SBICs 

that will focus on making investments 

in early stage small businesses. Go to 

www.sba.gov/inv/earlystage for 

information on the Early Stage Initiative 

and links to the Early Stage SBIC Final 

Rule (‘‘Final Rule’’). This initiative is 

part of President Obama’s ‘‘Start-Up 

America Initiative’’ to promote 

American innovation and job creation 

by encouraging private sector 

investment in job-creating startups and 

small firms, accelerating research, and 

addressing barriers to success for 

entrepreneurs and small businesses. 

II. Management Assessment 

Questionnaire/License Application 

Materials 

The first required submission in the 

Early Stage Licensing process is SBA’s 

MAQ. The MAQ consists of two forms 

that cover qualitative and quantitative 

information on the management team, 

the proposed strategy for the SBIC, the 

principals’ investment track record, and 

the proposed fund structure and 

economics. The MAQ consists of SBA 

Form 2181 and Exhibits A–F of SBA 

Form 2182. 

Should SBA issue you a ‘‘Green Light 

letter,’’ you must submit the SBIC 

License Application, consisting of SBA 

Forms 2181, 2182 and 2183 (each of 

SBA Forms 2181 and 2182 updated to 

reflect any changes), for the final 

licensing phase. Exhibit O in SBA Form 

2183 includes the fund’s limited 

partnership agreement (‘‘LPA’’). 

Applicants should review this notice for 

special instructions associated with the 

LPA for Early Stage SBICs. 

III. Early Stage Licensing Process 

There are four stages in SBA’s Early 

Stage Licensing Process: A) Call Period; 

B) Initial Review; C) Applicant 

Fundraising and Document Preparation; 

and D) Licensing. Each of these stages 

is discussed below. 

A. Call Period. This notice signals the 

start of the Fiscal Year (‘‘FY’’) 2015 

Early Stage SBIC call period. SBA 

intends to hold one Early Stage SBIC 

call period for accepting MAQs per 

fiscal year and SBA will issue a new 

notice in the Federal Register for the 

next call period. Interested parties 

should download a MAQ from https:// 

www.sba.gov/content/applicationforms. You should also review the 

information at www.sba.gov/inv/

earlystage which includes a list of 

frequently asked questions (‘‘FAQs’’) 

regarding the Early Stage Initiative. If 

you still have questions regarding the 

Early Stage process, please email your 

questions to erikka.robinson@sba.gov. 

SBA will endeavor to respond to your 

question within three business days, 

depending on volume. SBA may not be 

able to respond to fund-specific 

questions or questions that require a 

legal opinion. SBA will not take any 

further questions after the end of the 

Question and Answer Period identified 

under the Dates section. 

B. Initial Review. At the end of the 

Initial Review phase, SBA will issue a 

Green Light letter to those applicants 

that have preliminarily met the 

evaluation criteria for an Early Stage 

SBIC, including the vintage year and 

geographic diversification criteria. The 

process for SBA’s Initial Review is as 

follows: 

1. Submit MAQ. SBA must receive 

your completed MAQ no later than the 

date and time specified under the Dates 

section of this notice. SBA will send a 

confirmation that it has received your 

MAQ within three (3) business days of 

your submission. If you have not fully 

completed all sections of the MAQ or 

provided sufficient information to allow 

SBA to evaluate your management team, 

you may be ineligible for this call 

period. If so, SBA will notify you by 

email. 

2. Due Diligence. SBA will review all 

MAQs against the evaluation criteria 

identified in this notice. SBA may 

engage a contractor to assist in 

evaluating MAQs received in response 

to this Call. The Investment Committee 

(composed of senior managers from the 

Office of Investment and Innovation) 

will consider each MAQ, and if the 

Investment Committee concludes that 

the management team may be qualified 

for an Early Stage SBIC license, the 

entire team will be invited to SBA 

Headquarters at 409 Third Street SW., 

Washington, DC for an interview. Those 

applicants not invited for interviews 

will be notified. After September 30, 

2015, SBA will provide feedback upon 

request to applicants not selected for an 

interview. 

3. Interview Period. SBA’s invitation 

for an interview will identify a 1-hour 

time block during the Interview Period 

identified in the Dates section, along 

with the topics that the applicant 

should be prepared to address. SBA will 

conduct interviews at SBA 

Headquarters. 

4. Green Light Letter. Following the 

interview, the SBA will issue a Green 

Light letter to all applicants that have 

met the criteria identified in this notice, 

as determined by the Investment 

Committee. Applicants approved by the 

Investment Committee can expect to 

receive the Green Light letter via email 

within a few days of the Investment 

Committee’s decision. The Green Light 

letter formally invites an applicant to 

submit its application for an SBIC 

License. The Green Light letter is only 

an invitation to proceed to the next 

stage in the process, not a guarantee that 

a fund will be issued an Early Stage 

SBIC license. Those applicants that do 

not receive a Green Light letter will also 

be notified by email within a few days 

of the Investment Committee’s decision. 

After September 30, 2015, SBA will 

provide feedback upon request to those 

applicants that do not receive a Green 

Light letter. 

C. Fundraising and Document 

Preparation. If you receive a Green Light 

letter, you will need to raise the 

minimum Regulatory Capital needed to 

execute your strategy (which can be no 

less than $20 million) and submit your 

completed license application within 

one year from the date of the letter. 

1. Raise Regulatory Capital. An Early 

Stage SBIC applicant must have signed 

capital commitments for at least $20 

million in Regulatory Capital prior to 

filing its license application. 

2. SBIC Education. All principals of 

the Early Stage SBIC applicant must 

attend a one-day SBIC Regulations 

training class. This training is held at 

least three times per year in 

Washington, DC The purpose of this 

class is to familiarize principals with 

the SBIC rules, regulations and 

compliance procedures. Although an 

applicant may receive a license before 

all principals have completed the 

training, a majority of principals must 

do so before licensing and all must do 

so before a licensed Early Stage SBIC 

will be permitted to draw leverage. 

Information concerning registration for 

classes can be obtained at www.sbia.org. 

Certain non-principals such as members 

of a board of directors may also be 

required to take the class. In addition, 

any employees or consultants whom 


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you have assigned to handle regulatory 

matters or to interact with the Office of 

Investment and Innovation should 

attend the class. 

3. Finalize Documents & Perform 

Checklist. The following items must be 

completed and submitted in order to 

proceed to the Licensing phase: 

Item 

Updated SBA Form 2181 

SBA Forms 2182 & 2183 

At least $20 million in Regulatory Capital evidenced by signed Capital Certificate in 

Form 2183 (Exhibit K) 

$25,000 Non-refundable licensing fee 

D. Licensing. During this last stage, 

SBA will review your completed 

application, perform further due 

diligence and analysis as needed, and 

make the final licensing decision. 

Applicants that receive Green Light 

letters in 2015, and wish to be licensed 

in FY 2015, will need to submit their 

completed license application no later 

than 5 p.m. EST on June 5, 2015, and 

follow all guidance identified in this 

notice. Applicants that do not comply 

with the requirements in this notice risk 

not receiving a license in FY 2015. All 

other applicants must apply within one 

year of the issuance of their Green Light 

letter. The process for Licensing is 

detailed below. 

1. SBA acceptance of license 

application. Upon receipt of the 

application, SBA will acknowledge 

receipt by email. Within three business 

days, SBA will determine whether the 

application is complete, meets the 

minimum capital requirements and 

satisfies management ownership 

diversity requirements. If so, SBA will 

send the applicant an acceptance letter. 

If not, SBA will ask the applicant to 

resolve the issues identified. 

2. Background and Documentation 

Review. Once the application has been 

accepted, SBA will forward the 

fingerprint cards and Statements of 

Personal History to SBA’s Office of 

Inspector General for processing by the 

FBI. Following a review of the 

application and legal documents, SBA 

will provide the applicant with a 

‘‘comment letter.’’ Applicants must 

respond in writing to the comment 

letter. Applicants seeking to be licensed 

in FY 2015 should make every effort to 

respond to SBA’s comments within one 

week. Other applicants should respond 

as quickly as possible, but in any event 

within 30 days. Failure to address all 

comments to SBA’s satisfaction will 

slow down the licensing process. Please 

note that pre-licensing investments, 

which SBA must review and approve 

before they are closed, will also add to 

the licensing time. 

3. Divisional Licensing Committee. 

After SBA’s licensing staff and Office of 

General Counsel have completed their 

review, the license application is 

presented to the Divisional Licensing 

Committee. This committee is 

composed of the senior managers of the 

Office of Investment and Innovation. If 

approved by the Divisional Licensing 

Committee, the application is forwarded 

to the Agency Licensing Committee 

which is comprised of certain senior 

managers of the SBA. Prior to 

consideration by the Agency Licensing 

Committee, an applicant must provide a 

signed, up-to-date capital certificate 

showing that it has at least $2.5 million 

in Leverageable Capital, consisting of 

cash on deposit, approved pre-licensing 

investments funded with partners’ 

contributed capital, and/or approved 

organizational and operational expenses 

paid out of partners’ contributed capital, 

and at least $20 million in Regulatory 

Capital. The applicant’s bank must 

certify that the requisite funds are in the 

applicant’s account and unencumbered. 

4. Agency Licensing Committee and 

Administrator Approval. If the Agency 

Licensing Committee recommends 

approval of your license application, it 

will be forwarded to the SBA 

Administrator or her designee for final 

action as soon as you submit fully 

executed copies of all legal documents. 

(Please note that the executed 

documents must be identical to the 

‘‘final form’’ of the documents approved 

by SBA.) If the Administrator or her 

designee approves your application, 

your Early Stage SBIC license is issued. 

5. Leverage Commitments. SBA has 

allocated $200 million in FY 2015 for 

Early Stage SBICs. SBA expects to 

allocate another $200 million in FY 

2016. SBA expects to be able to commit 

the full amount of leverage that an Early 

Stage SBIC requests at the time of 

licensing. If total leverage commitments 

requested for the FY 2015 licensing 

cycle exceed the amount available in FY 

2015, SBA will allocate available 

leverage across all FY2015 Early Stage 

SBICs on a pro rata basis. Early Stage 

SBICs licensed in FY 2015 will be 

eligible to request the remainder of their 

uncommitted leverage request in FY 

2016 based on availability. Early Stage 

SBICs that raise additional private 

capital after licensing may request 

leverage commitments against that 

capital. However, such requests are 

subject to leverage availability and will 

not be considered until all other 

licensee requests are satisfied. 

IV. Early Stage SBIC LPA and 

Organizational Instructions 

A. Early Stage SBIC Model LPA. In 

order to expedite the review of Early 

Stage SBIC license applications, SBA 

has adopted a Model Early Stage SBIC 

Limited Partnership Agreement (‘‘Model 

LPA’’). The Model LPA includes 

required provisions shown in Bold Arial 

type and optional provisions in a 

different font. You must download the 

Model LPA at http://www.sba.gov/

content/model-early-stage-sbic-limitedpartnership-agreement. Applicants must 

use the Model LPA as a template and 

must follow the organizational structure 

of the Model LPA. Further, applicants 

must include in their limited 

partnership agreements all of the 

required provisions of the Model LPA 

that appear in Bold Arial type. SBA will 

not accept additions, deletions and 

other changes or modifications to any of 

those required provisions. Applicants 

are required to submit a copy of their 

limited partnership agreement 

blacklined against the Model LPA, as 

explained in the instructions provided 

at the beginning of the Model LPA. SBA 

provides the following further guidance 

on limited partnership agreements: 

1. SBA encourages applicants to 

adhere to the Model LPA to the 

maximum extent possible. Although 

SBA does not prohibit changes to those 

Model LPA provisions that do not 

appear in Bold Arial type, such changes 

must be explained in a narrative 

accompanying the applicant’s limited 

partnership agreement. The entire 

agreement is subject to SBA’s approval. 

2. Conditions or restrictions on the 

ability of the general partner to call 

private capital commitments are limited 

to those permitted by the Model LPA. 

3. Withdrawal rights are limited to 

those permitted by the Model LPA. 

4. Applicants must adhere to SBA’s 

management fee policies available at 

http://www.sba.gov/sites/default/files/

files/SBICTechnote07arev200804.pdf. 

This policy sets a maximum allowable 

management fee only. The actual 

management fee will be set by 

negotiation between the management 

team and the limited partners and may 

be less than the maximum. Early Stage 

SBIC applicants should be aware that 

the calculation of an SBIC’s capital 

impairment percentage is affected by all 

fund expenses, including management 

fees. SBA will consider the management 

fee in its licensing evaluation criteria as 

part of fund economics. SBA believes 

that the primary incentive for fund 

managers should be carried interest 

rather than fees. 


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5. The designation of fund expenses 

and expenses to be paid out of the 

management fee must be consistent with 

SBIC program regulations (see 13 CFR 

107.520). 

a. Organizational costs, expenses 

incurred in applying for a license and 

forming the SBIC and its entity general 

partner (but not its parent fund or any 

other affiliate), are considered a 

partnership expense. Organizational 

expenses typically include items such 

as the licensing fee, cost of legal and 

other professional and consulting 

services, travel and other fundraising 

expenses, costs of preparing, printing 

and distributing the private placement 

memorandum or other offering 

materials, and other related expenses 

such as telephone and supply costs. 

SBA strongly encourages applicants to 

include in the LPA a reasonable cap on 

the total organizational costs to be paid 

by the applicant. Costs that SBA deems 

excessive can be paid by an affiliate of 

the applicant or deducted from the 

applicant’s Regulatory Capital prior to 

licensing (Regulatory Capital must still 

be at least $20 million after the 

deduction). 

b. Unreimbursed expenses on 

investments in small businesses that do 

not close may be designated as a 

partnership expense but must be capped 

at a reasonable level. 

6. Right of limited partners to remove 

general partner—Provisions allowing 

removal of the general partner without 

cause (‘‘no-fault divorce’’ provisions) 

are permitted only after the Early Stage 

SBIC has repaid all outstanding leverage 

and any other amounts payable to SBA 

and has surrendered its SBIC license. 

7. Any amendments to the limited 

partnership agreement required by SBA 

must be executed before licensing. Any 

amendments initiated by the applicant 

during the licensing process must be 

submitted to SBA in draft form as early 

as possible. SBA will not consider 

amendments to an Early Stage SBIC’s 

LPA for a minimum of six months after 

licensing. 

B. Organization. Early Stage SBIC 

applicants must adhere to the following 

rules regarding organizational structure: 

1. Applicant cannot be a BDC or other 

public entity or a subsidiary of any such 

entity. 

2. All provisions governing the 

operation of the SBIC must be included 

in the limited partnership agreement. A 

side letter between the applicant (or its 

general partner) and an investor may 

supplement the limited partnership 

agreement but may not supersede it. In 

the event of a conflict between the 

limited partnership agreement and the 

side letter, the limited partnership 

agreement shall control. If an investor 

requests a side letter provision that is of 

general interest to all investors (e.g., a 

provision regarding the fund’s efforts to 

invest in certain geographic areas), that 

provision should be incorporated into 

the limited partnership agreement. All 

side letters require SBA’s prior written 

approval. 

3. Applicant must adopt SBA Model 

Valuation Guidelines. 

4. Drop-down SBICs 

a. The drop-down structure should be 

used only when it has a clear business 

purpose: 

i. Example 1—Parent fund has already 

raised capital and begun operating and 

wants to commit a portion of its capital 

to an Early Stage SBIC. 

ii. Example 2—Substantial capital 

will be retained for investment at the 

parent level (SBA suggests that 

managers consider the alternative of 

structuring a non-SBIC fund side by side 

with the SBIC). 

b. Drop-down funds must have one 

parent fund only and the parent fund 

must be a U.S. entity. 

c. Parent must qualify as a traditional 

investment company based on 

established SBA precedent. 

d. Parent must disclose the identity of 

all of its investors. 

e. All of the investors in the parent 

fund (the SBIC’s ‘‘Class A’’ limited 

partner) must agree to be ‘‘Class B’’ 

limited partners of the SBIC with an 

obligation to fund the Early Stage SBIC 

capital calls if the Class A limited 

partner does not. The obligation of the 

Class B limited partners to the Early 

Stage SBIC is reduced dollar for dollar 

as the parent fund contributes capital to 

the SBIC. The Model LPA contains 

required provisions for drop-down 

funds. 

f. The Class B limited partners’ 

commitments to the SBIC applicant 

must be expressed as a specific dollar 

amount (not just as the ‘‘proportionate 

share’’ of parent fund’s commitment). 

g. The total dollar amount of Class B 

commitments must be equal to the Class 

A limited partner’s unfunded 

commitment to the SBIC. SBA will not 

require Class B commitments if the 

SBIC’s Regulatory Capital will not 

include any unfunded commitments 

from the Class A limited partner. 

C. Capitalization. Applicants must 

raise the minimum $20 million in 

Regulatory Capital by the time the 

license application is submitted. 

1. Capital commitments from limited 

partners must be made directly to the 

SBIC (and its parent fund, in the case of 

a drop-down) with no intermediaries 

involved. 

2. The Early Stage SBIC applicant 

must have the unconditional ability to 

legally enforce collection of each capital 

commitment. 

3. Capital Certificate. Capital 

commitments must be documented in 

the capital certificate (Exhibit K of SBA 

Form 2183) and comply with the 

following: 

a. A signed Capital Certificate must be 

submitted with the license application. 

b. SBA will permit only the sole 

following condition on private capital 

commitments: The receipt of an Early 

Stage SBIC license. 

c. Individual investors must list 

primary residence address, not a 

business address. 

d. Street addresses are required (no 

P.O. Box addresses). 

4. A dual commitment may be 

obtained to back up the commitment of 

any direct investor in the SBIC who is 

not an Institutional Investor. 

5. Capital commitments by the 

principals, general partner, or their 

affiliates must be payable in cash when 

called (cannot be satisfied with notes or 

management fee waivers). 

D. General Partner 

1. All principals must: 

a. Hold direct ownership interests in 

and be the direct individual managers of 

the general partner, with no intervening 

entities. 

b. Receive carried interest directly 

from the general partner; for drop-down 

SBICs, carried interest may be received 

from the parent fund’s general partner. 

2. A maximum of 25% of the carried 

interest may be allocated to nonprincipals. 

3. Any provision to remove or 

terminate a principal must be spelled 

out within the general partner’s 

organizational document and must not 

be tied to events occurring under other 

agreements (e.g., a principal’s 

employment agreement with the 

management company). 

E. Investment Advisor (‘‘Management 

Company’’). Ownership of the 

Management Company that is highly 

disproportionate to the ownership of the 

general partner (e.g., one principal is the 

100% owner) is not viewed favorably by 

SBA, but may be acceptable if there are 

adequate checks and balances on the 

powers of the dominant owner. Areas 

that cannot be subject to unilateral 

decision-making include the following: 

1. Power to remove or terminate other 

principals. 

2. Power to change the composition of 

the Early Stage SBIC’s investment 

committee. 

V. Early Stage SBIC Licensing 

Evaluation Criteria. 

A. General Criteria. SBA will evaluate 

an Early Stage SBIC license applicant 


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based on the submitted application 

materials, Investment Committee 

interviews with the applicant’s 

management team, and the results of 

background investigations, public 

record searches, and other due diligence 

conducted by SBA and other Federal 

agencies. SBA will evaluate an Early 

Stage SBIC license applicant based on 

the same factors applicable to other 

license applicants, as set forth in 13 CFR 

107.305, with particular emphasis on 

managers’ skills and experience in 

evaluating and investing in early stage 

companies. As discussed in the Final 

Rule, evaluation criteria fall into four 

areas: (A) Management Team; (B) Track 

Record; (C) Proposed Investment 

Strategy; and (D) Organizational 

Structure and Fund Economics. You 

should review these regulations prior to 

completing your MAQ. 

B. Managing SBA Leverage. SBA will 

pay particular attention to how a team’s 

investment strategy works with 

proposed SBA leverage. Early Stage 

Debenture leverage either requires a 5 

year interest and annual charge reserve 

from the date of issue or is structured 

with an original issue discount that 

covers the interest and annual charges 

for the first 5 years. In either case, Early 

Stage SBICs must identify how quarterly 

interest payments beginning in the 6th 

year from Debenture issue will be met. 

Sources of liquidity to make interest 

payments may include (a) private 

capital; (b) realizations; or (c) current 

income. As part of your plan of 

operations, you should carefully 

consider how your investment strategy 

will work with SBA leverage and make 

appropriate suggestions to manage risk. 

Risk mitigation strategies might include 

making some investments in current pay 

instruments, taking down less than a 

full tier of leverage (i.e., leverage less 

than 100% of Regulatory Capital), taking 

leverage down later in the fund’s life, 

lowering management expenses, and 

reserving more private capital. The 

strategies you choose to employ should 

be appropriate for your management 

team’s track record and investment 

strategy. 

C. SBA Diversification Rights. Per 13 

CFR 107.320, SBA reserves the right to 

maintain diversification among Early 

Stage SBICs with respect to (i) the year 

in which they commence operations 

(‘‘vintage year’’) and (ii) geographic 

location. 

1. Vintage Year Diversification. 

Vintage year has a major impact on the 

return expectations of a fund and 

excessive concentration in a single year 

could substantially increase program 

risk. Therefore, SBA reserves the right, 

when licensing Early Stage SBICs, to 

maintain diversification across vintage 

years. SBA believes that it will be able 

to manage vintage year diversification 

through its call process. If SBA receives 

an extraordinary number of qualified 

applicants in FY 2015, it may not 

approve all such applicants. 

2. Geographic Diversification. All 

Early Stage SBICs must first meet SBA’s 

basic licensing criteria. After those 

criteria are met, SBA reserves the right 

to maintain diversification among Early 

Stage SBICs with respect to the 

geographic location in which the Early 

Stage SBIC expects to invest. 

Pravina Raghavan, 

Deputy Associate Administrator, Office of 

Investment and Innovation. 

[FR Doc. 2015–00247 Filed 1–9–15; 8:45 am] 

BILLING CODE 8025–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

Agency Information Collection 

Activities: Requests for Comments; 

Clearance of Renewed Approval of 

Information Collection: Reduced 

Vertical Separation Minimum 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Notice and request for 

comments. 

SUMMARY: In accordance with the 

Paperwork Reduction Act of 1995, FAA 

invites public comments about our 

intention to request the Office of 

Management and Budget (OMB) 

approval to renew an information 

collection. The Federal Register Notice 

with a 60-day comment period soliciting 

comments on the following collection of 

information was published on 

November 6, 2014. Aircraft operators 

seeking operational approval to conduct 

Reduced Vertical Separation Minimum 

(RVSM) operations within the 48 

contiguous United States (U.S.), Alaska 

and a portion of the Gulf of Mexico 

must submit an application to the 

Certificate Holding District Office. 

DATES: Written comments should be 

submitted by February 11, 2015. 

ADDRESSES: Interested persons are 

invited to submit written comments on 

the proposed information collection to 

the Office of Information and Regulatory 

Affairs, Office of Management and 

Budget. Comments should be addressed 

to the attention of the Desk Officer, 

Department of Transportation/FAA, and 

sent via electronic mail to 

oira_submission@omb.eop.gov, or faxed 

to (202) 395–6974, or mailed to the 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Docket Library, Room 10102, 

725 17th Street NW., Washington, DC 

20503. 

Public Comments Invited: You are 

asked to comment on any aspect of this 

information collection, including (a) 

Whether the proposed collection of 

information is necessary for FAA’s 

performance; (b) the accuracy of the 

estimated burden; (c) ways for FAA to 

enhance the quality, utility and clarity 

of the information collection; and (d) 

ways that the burden could be 

minimized without reducing the quality 

of the collected information. The agency 

will summarize and/or include your 

comments in the request for OMB’s 

clearance of this information collection. 

FOR FURTHER INFORMATION CONTACT: 

Kathy DePaepe at (405) 954–9362, or by 

email at: Kathy.DePaepe@faa.gov. 

SUPPLEMENTARY INFORMATION: 

OMB Control Number: 2120–0679. 

Title: Reduced Vertical Separation 

Minimum. 

Form Numbers: There are no FAA 

forms associated with this collection. 

Type of Review: Renewal of an 

information collection. 

Background: The Federal Register 

Notice with a 60-day comment period 

soliciting comments on the following 

collection of information was published 

on November 6, 2014 (79 FR 66028). 

The authority to collect data from 

aircraft operators seeking operational 

approval to conduct RVSM operations is 

contained in part 91, Section 91.180. 

Aircraft operators seeking operational 

approval to conduct RVSM operations 

within the 48 contiguous States of the 

United States (U.S.), Alaska and that 

portion of the Gulf of Mexico where the 

FAA provides air traffic services must 

submit their application to the 

Certificate Holding District Office 

(CHDO). 

Respondents: Approximately 1,560 

operators. 

Frequency: Information is collected 

on occasion. 

Estimated Average Burden per 

Response: 30 hours. 

Estimated Total Annual Burden: 

46,800 hours. 

Issued in Washington, DC, on January 5, 

2015. 

Albert R. Spence, 

FAA Assistant Information Collection 

Clearance Officer, IT Enterprises Business 

Services Division, ASP–110. 

[FR Doc. 2015–00255 Filed 1–9–15; 8:45 am] 

BILLING CODE 4910–13–P 


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