The U.S. Small Business Administration is revising a rule which prohibits a small business investment company (SBIC) from providing financing to an Associate, as defined in the rules, unless it first obtains a conflict of interest exemption from SBA. The revision eliminates the requirement for an exemption in the case of a follow-on investment in a small business concern by an SBIC and an Associate investment fund, where both parties invested previously on the same terms and conditions and where the follow-on investment would also be on the same terms and conditions as well as in the same proportions. In addition, this rule implements two provisions of the Small Business Investment Act of 1958, as amended. First, it brings the public notice requirement for conflict of interest transactions into conformity with statutory requirements. Second, it expands the types of investments an SBIC is permitted to make with its "idle funds" (cash that is not immediately needed for fund operations or investments in small business concerns). Finally, the rule makes two technical corrections: Removing an outdated cross-reference; and eliminating a section that exactly duplicates a provision found elsewhere in part 107.