UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM N-17f-2

               Certificate of Accounting of Securities and Similar
                          Investments in the Custody of
                         Management Investment Companies

                    Pursuant to Rule 17f-2 [17 CFR 270.17f-2]

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1. Investment Company Act File Number:               Date examination completed:

811-1056                                             September 30, 2008
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2. State identification Number:
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AL           AK             AZ            AR             CA             CO
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CT           DE             DC            FL             GA             HI
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ID           IL             IN            IA             KS             KY
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LA           ME             MD            MA             MI             MN
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MS           MO             MT            NE             NV             NH
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NJ           NM             NY            NC             ND             OH
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OK           OR             PA            RI             SC             SD
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TN           TX             UT            VT             VA             WA
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WV           WI             WY           PUERTO RICO
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Other (specify):
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3. Exact name of investment company as specified in registration statement:

   Capital Southwest Corporation
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4. Address of principal  executive  office (number,  street,  city,  state,  zip
   code):
   12900 Preston Road, Suite 700, Dallas, Texas 75230
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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM N-17f-2

               Certificate of Accounting of Securities and Similar
                          Investments in the Custody of
                         Management Investment Companies

                    Pursuant to Rule 17f-2 [17 CFR 270.17f-2]

--------------------------------------------------------------------------------

1. Investment Company Act File Number:               Date examination completed:

811-1947                                             September 30, 2008
--------------------------------------------------------------------------------
2. State identification Number:
--------------------------------------------------------------------------------
AL           AK             AZ            AR             CA             CO
--------------------------------------------------------------------------------
CT           DE             DC            FL             GA             HI
--------------------------------------------------------------------------------
ID           IL             IN            IA             KS             KY
--------------------------------------------------------------------------------
LA           ME             MD            MA             MI             MN
--------------------------------------------------------------------------------
MS           MO             MT            NE             NV             NH
--------------------------------------------------------------------------------
NJ           NM             NY            NC             ND             OH
--------------------------------------------------------------------------------
OK           OR             PA            RI             SC             SD
--------------------------------------------------------------------------------
TN           TX             UT            VT             VA             WA
--------------------------------------------------------------------------------
WV           WI             WY           PUERTO RICO
--------------------------------------------------------------------------------
Other (specify):
--------------------------------------------------------------------------------
3. Exact name of investment company as specified in registration statement:

   Capital Southwest Venture Corporation
--------------------------------------------------------------------------------
4. Address of principal  executive  office (number,  street,  city,  state,  zip
   code):
   12900 Preston Road, Suite 700, Dallas, Texas 75230
--------------------------------------------------------------------------------





             Report of Independent Registered Public Accounting Firm




To the Board of Directors of
Capital Southwest Corporation and Subsidiaries:

We have examined management's assertion, included in the accompanying Management
Statement Regarding Compliance With Certain Provisions of the Investment Company
Act of 1940, that Capital Southwest Corporation and subsidiaries (the "Company")
complied with the  requirements  of subsections  (b) and (c) of rule 17f-2 under
the  Investment  Company  Act of 1940 (the  "Act")  as of  September  30,  2008.
Management is responsible for the Company's  compliance with those requirements.
Our responsibility is to express an opinion on management's  assertion about the
Company's compliance based on our examination.

Our  examination  was conducted in  accordance  with the standards of the Public
Company Accounting  Oversight Board (United States) and,  accordingly,  included
examining,  on a test basis,  evidence about the Company's compliance with those
requirements and performing such other procedures as we considered  necessary in
the  circumstances.  Included  among our  procedures  were the  following  tests
performed  as of September  30, 2008,  and with respect to agreement of security
purchases  and sales,  for the period  from March 31, 2008 (the date of our last
examination) through September 30, 2008:

     o    Count  and  inspection  of all  securities  located  in the  vault  of
          JPMorgan Chase in New York City, New York.

     o    Confirmation of all securities held by Smith Barney.

     o    Reconciliation  of all such securities to the books and records of the
          Company and the Custodian.

     o    Agreement of five  security  purchases  since our last report from the
          books and records of the Company to the Company's bank statements.

We believe that our examination provides a reasonable basis for our opinion. Our
examination does not provide a legal  determination on the Company's  compliance
with specified requirements.

In our opinion,  management's  assertion that Capital Southwest  Corporation and
subsidiaries  complied with the  requirements of subsections (b) and (c) of rule
17f-2 of the  Investment  Company Act of 1940 as of  September  30,  2008,  with
respect to  securities  reflected  in the  investment  account of the Company is
fairly stated, in all material respects.

This report is intended solely for the information and use of management and the
Board of Directors of Capital  Southwest  Corporation and  subsidiaries  and the
Securities  and Exchange  Commission and is not intended to be and should not be
used by anyone other than these specified parties.

/s/ Grant Thornton LLP

Dallas, Texas
October 31, 2008



                    Management Statement Regarding Compliance
          With Certain Provisions of the Investment Company Act of 1940




We, as members of management of Capital  Southwest  Corporation  and  subsidiary
(the  "Company"),  are  responsible  for  complying  with  the  requirements  of
subsections  (b) and (c) of rule 17f-2,  "Custody of  Investments  by Registered
Management Investment  Companies," of the Investment Company Act of 1940. We are
also responsible for establishing and maintaining  effective  internal  controls
over compliance with those requirements.  We have performed an evaluation of the
Company's  compliance  with the  requirements of subsections (b) and (c) of rule
17f-2 as of  September  30, 2008 and from March 31, 2008 through  September  30,
2008.

Based on this evaluation,  we assert that the Company was in compliance with the
requirements of subsections (b) and (c) of rule 17f-2 of the Investment  Company
Act of 1940 as of September 30, 2008, and from March 31, 2008 through  September
30, 2008 with respect to securities  reflected in the investment  account of the
Company.




                                                   Capital Southwest Corporation
                                                   [Name of Company]


                                                   /s/ Tracy L. Morris
                                                   [Name]


                                                   Chief Financial Officer
                                                   [Title]


                                                   September 30, 2008
                                                   [Date]