Existing federal law, with certain exceptions, prohibits a person from engaging in certain activities relating to offering to sell or selling a security unless the security is registered with the Securities and Exchange Commission. (15 U.S.C. § 77e) Existing federal law creates an exemption from this requirement for a security which is part of an issue offered or sold only to persons who are residents of the same state of which the issuer is also a resident and doing business within or, if the issuer is a corporation, incorporated by and doing business within. (15 U.S.C. § 77c(a)(11)) Existing federal regulations set forth: (1) requirements that an issuer must meet to be deemed to be a resident of and doing business within a state where the issuer offers and sells securities; and (2) various other requirements for transactions involving intrastate offers or sales of securities for the transaction to qualify for the exemption from the federal registration requirements. (17 C.F.R. §§ 230.147, 230.147A) Existing state law prohibits a person from offering to sell or selling any security in this State unless the security meets certain registration requirements or the security transaction is exempt from the registration requirements. (NRS 90.460) Section 5 of this bill creates an exemption from those state registration requirements for certain transactions involving an offer to sell or sale of a security to a Nevada certified investor. Section 2 of this bill defines “Nevada certified investor” to mean, in general, a natural person who is, or a married couple who each are, a resident of this State and who meets certain financial qualifications. Under section 5, a transaction involving an offer to sell or sale of a security to a Nevada certified investor is exempt from the registration requirements provided under existing state law if: (1) the transaction meets the requirements for the federal exemption for intrastate offers and sales of securities; (2) the transaction meets any other requirements established by regulations adopted by the Administrator of the Securities Division of the Office of the Secretary of State, who is the Deputy of Securities, pursuant to section 3 of this bill; (3) the transaction involves certain types of Nevada certified investors, the transaction would not result in the Nevada certified investor investing more than 10 percent of the net worth of the investor in securities purchased in transactions exempt pursuant to section 3; and (4) the person offering to sell or selling the security first undergoes a criminal background check, submits certain information to the Administrator and makes certain information available to Nevada certified investors. Section 3 authorizes the Administrator to adopt regulations establishing additional requirements for transactions involving an offer to sell or sale of a security to a Nevada certified investor to qualify for an exemption from the registration requirements pursuant to section 5. Section 4 of this bill makes a conforming change to indicate the proper placement of section 2 in the Nevada Revised Statutes. Existing law authorizes the registration of a security by qualification and requires the registration statement for such a security to contain certain information relating to the issuer and certain other persons. (NRS 90.490) Section 4.5 of this bill revises the information which is required to be included in the registration statement.

Statutes affected:
As Introduced: 90.211, 90.530
Reprint 1: 90.211, 90.470, 90.480, 90.490, 90.500, 90.510, 90.530, 90.660
Reprint 2: 90.211, 90.490, 90.530
As Enrolled: 90.211, 90.490, 90.530
BDR: 90.211, 90.530