1. An investment adviser is exempt from the licensing requirements under NRS 90.330 if: (a) The investment adviser provides advice solely to one or more qualifying private funds; (b) The investment adviser is not required to register with the Securities and Exchange Commission; (c) Neither the investment adviser nor any of the advisory affiliates of the investment adviser are subject to an event that would disqualify an issuer pursuant to 17 C.F.R. 230.506(d)(1); (d) The investment adviser files with the Administrator any report and amendment thereto required to be filed with the Securities and Exchange Commission pursuant to 17 C.F.R. 275.204-4; (e) The investment adviser pays a fee prescribed by the Administrator; and (f) Except as otherwise provided in subsection 2, if the investment adviser advises at least one eligible fund, the investment adviser must: (1) Advise only those eligible funds whose outstanding securities are beneficially owned entirely by persons who, after deducting the value of the primary residence from the net worth of the person, would each be a qualified client at the time the securities are purchased from the issuer; (2) Disclose in writing, at the time of purchase, the following information to each beneficial owner of the eligible fund: (I) All services, if any, to be provided to the beneficial owner; (II) Any duty owed by the investment adviser to the beneficial owner; and (III) Any other material information affecting the rights and responsibilities of the beneficial owner; and (3) Annually obtain an audited financial statement of each eligible fund and deliver the statement to each beneficial owner of the corresponding eligible fund. 2. If an investment adviser advises an eligible fund that has one or more beneficial owners who are not qualified clients and the eligible fund existed before July 1, 2022, then on or after July 1, 2022: (a) The eligible fund is prohibited from accepting additional beneficial owners who are not qualified clients; (b) The investment adviser must: (1) Make the disclosure described in subparagraph (2) of paragraph (f) of subsection 1 to all beneficial owners of the eligible fund, regardless of whether the beneficial owner is a qualified client; (2) Deliver the financial statement described in subparagraph (3) of paragraph (f) of subsection 1 to each beneficial owner of the eligible fund, regardless of whether the beneficial owner is a qualified client; and (3) Otherwise satisfy the requirements for exemption set forth in subsection 1. 3. The filings described in paragraph (d) of subsection 1: (a) Must be filed electronically through the Investment Adviser Registration Depository; and (b) Shall be deemed to be filed on the date that the filing and fee described in paragraph (e) of subsection 1 are filed and accepted on behalf of the State by the Investment Adviser Registration Depository. 4. If an investment adviser becomes ineligible for the exemption described in this section, the investment adviser must comply with any applicable laws for licensure within 90 days after the date of ineligibility. 5. As used in this section: (a) Eligible fund means a qualifying private fund that: (1) Is eligible for the exclusion from the definition of an investment company under 15 U.S.C. 80a-3(c)(1); and (2) Is not a venture capital fund, as defined in 17 C.F.R. 275.203(l)-1. (b) Qualified client has the meaning ascribed to it in 17 C.F.R. 275.205-3. (c) Value of the primary residence means the fair market value of the primary residence of a person, subtracted by the amount of debt secured by the property up to its fair market value.
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