[Rev. 6/7/2026 10:59:53 AM]
[NAC-90 Revised Date: 4-26]
GENERAL PROVISIONS
90.011 Definitions.
90.015 “Administrator” defined.
90.020 “Affiliate of an issuer” defined.
90.025 “Assistant sales representative” defined.
90.027 “Branch office” defined.
90.030 “Central Registration Depository” defined.
90.035 “Control person” defined.
90.040 “Division” defined.
90.042 “Federal covered adviser” defined.
90.045 “Fiscal year” defined.
90.051 “Insider” defined.
90.053 “Investment Adviser Registration Depository” defined.
90.061 “Nasdaq” defined.
90.063 “Offering document” defined.
90.071 “Office of the Administrator” defined.
90.075 “Representative of an investment adviser” defined.
90.076 “Securities Act of 1933,” “Securities Exchange Act of 1934,” “Investment Company Act of 1940” and “Investment Advisers Act of 1940” defined.
90.078 “Securities industry personnel” defined.
90.088 “Institutional buyer” interpreted.
90.090 “Investment contract” interpreted.
90.095 Construction of chapter.
90.101 Severability of provisions.
ADMINISTRATION
90.315 Availability of forms.
90.3155 Irrevocable consent to service of process.
90.317 Issuance of written interpretations of provisions.
90.318 Request for waiver or no-action letter.
SECURITIES AGENTS
General Provisions
90.321 Adoption by reference of certain provisions of Financial Industry Regulatory Authority Rules; review of changes.
90.325 Availability of registration information for Financial Industry Regulatory Authority examinations.
90.327 Unethical and dishonest practices.
90.328 Fraudulent practices.
90.329 Notification of customers before assessing new charges for services performed.
90.3291 Merger and acquisition brokers: Exemption from licensing requirements under certain circumstances.
90.3292 Broker-dealers and sales representatives: Exemption from licensing requirements under certain circumstances.
90.32923 Broker-dealers and investment advisers: Delay of transactions or disbursements to prevent exploitation of older or vulnerable persons.
90.3293 Investment advisers and representatives of investment advisers: Electronic transfer of fees to and filing of documents with certain depositories.
90.32932 Investment advisers, representatives of investment advisers and federal covered advisers: Fiduciary duties; unethical business practices.
90.32934 Investment advisers, representatives of investment advisers and federal covered advisers: Advertisements.
90.3294 Federal covered advisers: Filing, renewal and updates to Form ADV.
90.3296 Federal covered advisers: Employment restrictions.
90.3298 Securities industry personnel: Use of Internet for distribution of information.
Broker-Dealers
90.330 Applicant for licensing: Filing requirements; payment of fee.
90.335 Filing of balance sheet.
90.340 Failure to comply with Rule 15c3-1: Disciplinary proceedings.
90.342 Compliance with certain provisions of Financial Industry Regulatory Authority Rules.
90.345 Expiration and renewal of license.
90.350 Withdrawal from licensing.
90.351 Registration of sales representatives by broker-dealers.
Sales Representatives
90.355 Applicant for licensing: Filing requirements; payment of fee; required examinations.
90.360 Cessation of employment or contractual relationship with broker-dealer.
90.365 Expiration and renewal of license.
90.368 Licensing as representative of investment adviser: Exemption from licensing requirements under certain circumstances.
90.369 Licensing requirements inapplicable under certain circumstances.
90.3695 Affiliation with registered branch office required.
Assistant Sales Representatives
90.371 Licensing requirements; expiration and renewal of license.
90.373 Restrictions on activities and compensation.
Transfer Agents
90.374 Applicant for licensing: Filing requirements.
90.3743 Expiration and renewal of license.
90.3745 Compliance with certain provisions of Financial Industry Regulatory Authority Rules.
90.3747 Withdrawal from licensing.
Investment Advisers
90.375 Applicant for initial license: Filing requirements; payment of fee.
90.380 Expiration and renewal of license; filing of amendments and updates to Form ADV.
90.385 Withdrawal from licensing.
90.3852 Custody of client funds and securities.
90.3854 Minimum net worth requirements.
90.3856 Performance-based compensation.
90.3858 Business continuity and success planning and procedures.
90.386 Information security and cybersecurity policies and procedures.
90.3862 Policies relating to collection of private personal information of clients.
90.3865 Delivery of brochures, supplements and other required documents.
90.3867 Recordkeeping: General requirements.
90.3869 Recordkeeping: Securities transactions involving beneficial ownership of investment advisers and advisory representatives.
90.3871 Recordkeeping: Securities transactions involving beneficial ownership when investment adviser is primarily engaged in business other than advising clients.
90.3873 Recordkeeping: Additional requirements when investment adviser has custody of client funds or securities.
90.3875 Recordkeeping: Additional requirements when custody of client funds or securities arises from advising a pooled investment vehicle.
90.3877 Recordkeeping: Records required when providing investment supervisory or management services to client portfolios.
90.3879 Recordkeeping: Maintenance and preservation of required records.
90.3881 Recordkeeping: Preservation of records upon cessation or discontinuance of business.
90.3883 Recordkeeping: Authorized media for record storage; organization and accessibility of records; separate storage of duplicate copies; safeguards for electronic records.
90.3885 Recordkeeping: Compliance with federal law deemed to meet certain recordkeeping requirements.
90.3887 Recordkeeping: Exemption for certain investment advisers licensed in another state.
Representatives of Investment Advisers
90.391 Applicant for initial license: Filing requirements; payment of fee.
90.3911 Expiration and renewal of license; required updating of certain information.
90.3912 Licensing requirements inapplicable under certain circumstances.
90.3913 Continuing education requirements.
90.3915 Cessation of employment or contractual relationship with investment adviser.
Branch Offices
90.392 Licensing requirements; changes in certain information; expiration and renewal of license.
90.3925 Designation as office of supervisory jurisdiction; designation of supervisor.
90.393 Licensing of person in charge; roster of affiliated sales representatives.
90.3935 Restrictions on name and location of operation.
90.394 Grounds for denial, suspension or revocation of license.
90.3945 Notification of Division before closing office or terminating business.
REGISTRATION OF SECURITIES
General Provisions
90.395 Definitions.
90.398 Electronic filing; electronic payment of fees.
90.3982 Electronic delivery of offering documents.
90.3984 Electronic subscription agreements.
90.3986 Electronic initiatives for offering documents and subscription agreements: Policies; procedures; record storage.
90.3988 Use of electronic signature.
90.399 Security breaches relating to electronic offering documents or electronic signatures.
90.400 Filing of Year-End Securities Sales Report.
90.402 Prospectus: Index.
90.403 Prospectus: Use and availability of Small Company Offering Registration Form.
90.405 Application of statements of policy to offerings; offerings made with unreasonable amounts of underwriters’ and sellers’ compensation; aggregate amount of compensation.
90.408 Registration statements: Use of financial statements and financial information prepared in accordance with generally accepted accounting principles of Canada.
90.410 Registration statements deemed abandoned: Circumstances and effect.
90.412 Withdrawal of registration statement.
90.413 Application to extend effectiveness of registration statement.
90.415 Waiver of provisions.
Registration by Filing
90.420 Documents required to accompany filing.
90.425 Accelerated effectiveness.
90.430 Posteffective amendment.
90.435 Timely filing of reports.
Registration by Coordination
90.440 Documents required to accompany filing.
90.445 Accelerated effectiveness.
90.450 Posteffective amendment.
90.453 Effective date of registration statement filed with Securities and Exchange Commission.
90.455 Written notice of date federal registration statement became effective.
Registration by Qualification
90.460 Documents required to accompany filing.
90.465 Amendment to prospectus, pamphlet or similar document.
90.470 Preparation and auditing of financial statements.
Development Stage Companies
90.475 Applicability.
90.480 Contents of registration statement or offering document; penalty for failure to comply.
90.483 Registration by qualification: Additional filings required after filing of registration statement; enforcement.
90.485 Limitation on amount of dilution in offering; remedy for violation.
90.490 Offering of debt securities, equity securities or securities convertible to equity securities; offering of partnership units or trust certificate.
90.492 Submission to Division of material change in issuer or offering.
Exemptions From Registration
90.495 Claim of exemption: Filing requirements.
90.496 Claim of exemption: Effective period.
90.497 Claim of exemption: Expeditious processing.
90.498 Claim of exemption: Offering issued in series of securities or relating to multiple funds.
90.500 Securities listed on certain exchanges.
90.505 Rated promissory note, draft, bill of exchange or banker’s acceptance.
90.510 Statutory exemption for nonissuer transaction by sales representative licensed in State: Inclusion of information on issuer in designated securities manual or other aggregator.
90.512 Nonissuer transaction by sales representative licensed in State: Security complying with certain requirements for statutory exemption.
90.513 Offers of securities made by investment companies registered under Investment Company Act of 1940.
90.5135 Offers of securities made by crowdfunding issuers.
90.514 Offers of securities made by Tier 2 issuers.
90.5145 Offers of securities made pursuant to Rule 506 of Regulation D of Securities and Exchange Commission.
90.516 Nonissuer transaction by sales representative licensed in State: Security included or designated for inclusion in Nasdaq Capital Market.
90.517 Nonissuer transaction by sales representative licensed in State: Security included or designated for inclusion in OTC Bulletin Board.
90.518 Nonissuer transaction by sales representative licensed in State: Security of no more than $100,000 held by shareholder for 12-month period.
90.519 Certain securities issued by governmental entities.
90.521 Offer or sale complying with Regulation S of Securities and Exchange Commission.
90.522 Nonissuer transaction for which designated registration statement filed with and declared effective by Securities and Exchange Commission.
90.525 Isolated transaction.
90.534 Certain offers of securities made over the Internet or similar electronic system.
90.536 Certain offers of securities made to accredited investors.
90.538 Certain offers of securities made to solicit interest.
PROCEEDINGS BEFORE THE ADMINISTRATOR
90.540 Applicability.
90.545 Notice.
90.550 Representation by counsel.
90.555 Administrator’s staff to bring proceeding; respondent.
90.560 Complaint; summons; answer; default order; setting of hearing.
90.565 Motions.
90.570 Pleading, motion, opposition, reply or other paper: Filing and service.
90.575 Discovery.
90.577 Prehearing conference.
90.579 Witnesses and exhibits.
90.580 Location of hearing.
90.585 Conduct of hearing.
90.590 Record.
90.595 Continuance or adjournment of hearing.
90.600 Fees of witnesses.
90.605 Rendering of order or decision; petition for rehearing.
90.610 Granting or denying petition for rehearing.
GENERAL PROVISIONS
NAC 90.011 Definitions. (NRS 90.750) As used in this chapter, unless the context otherwise requires, the words and terms defined in NAC 90.015 to 90.078, inclusive, have the meanings ascribed to them in those sections.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; 11-19-92; 5-23-96; 10-30-97; R016-02, 8-6-2002; R033-08, 6-17-2008; R018-21, 6-2-2023)
NAC 90.015 “Administrator” defined. (NRS 90.750) “Administrator” means the Administrator of the Division.
(Added to NAC by Sec’y of State, eff. 11-19-92)
NAC 90.020 “Affiliate of an issuer” defined. (NRS 90.750) “Affiliate of an issuer” means a person who directly, or indirectly through one or more intermediaries, controls, is controlled by or is under the common control with that issuer.
(Added to NAC by Sec’y of State, eff. 11-19-92)
NAC 90.025 “Assistant sales representative” defined. (NRS 90.750) “Assistant sales representative” includes a natural person who is employed or under contract with a broker-dealer and accepts unsolicited customer orders for submission for execution by the broker-dealer. The term does not include a broker-dealer or sales representative.
(Added to NAC by Sec’y of State, eff. 11-19-92)
NAC 90.027 “Branch office” defined. (NRS 90.750) “Branch office” means any place of business in this State other than the principal office in this State of the broker-dealer, from which one or more sales representatives transact business.
(Added to NAC by Sec’y of State by R016-02, eff. 8-6-2002)
NAC 90.030 “Central Registration Depository” defined. (NRS 90.750) “Central Registration Depository” means the Central Registration Depository of the Financial Industry Regulatory Authority and the North American Securities Administrators Association.
(Added to NAC by Sec’y of State, eff. 11-19-92; A by R016-02, 8-6-2002; R033-08, 6-17-2008)
NAC 90.035 “Control person” defined. (NRS 90.750) “Control person” includes a person who:
1. Owns or controls 10 percent or more of the voting stock of a corporation;
2. Is an officer or director of a corporation; or
3. Is in a position to influence the decision-making processes of a corporation.
(Added to NAC by Sec’y of State, eff. 11-19-92)
NAC 90.040 “Division” defined. (NRS 90.750) “Division” means the Securities Division of the Office of the Secretary of State.
(Added to NAC by Sec’y of State, eff. 11-19-92)
NAC 90.042 “Federal covered adviser” defined. (NRS 90.750) “Federal covered adviser” means a person who is:
1. Registered or required to be registered pursuant to section 203 of the Investment Advisers Act of 1940; or
2. Excluded from the definition of “investment adviser” pursuant to subparagraph (11) of paragraph (a) of section 202 of the Investment Advisers Act of 1940.
(Added to NAC by Sec’y of State, eff. 10-30-97; A by R016-02, 8-6-2002; R018-21, 6-2-2023)
NAC 90.045 “Fiscal year” defined. (NRS 90.750) “Fiscal year” means an annual accounting period or, if no closing date has been adopted, the calendar year ending on December 31.
(Added to NAC by Sec’y of State, eff. 11-19-92)
NAC 90.051 “Insider” defined. (NRS 90.750) “Insider” includes a person who:
1. Owns or controls 10 percent or more of:
(a) The voting stock of a corporation;
(b) The membership interest of a limited-liability company; or
(c) Any other equity interest in another type of entity;
2. Is:
(a) An officer or director of a corporation; or
(b) A manager or managing member of a limited-liability company; or
3. Is a spouse or other member of the household of:
(a) An officer or director of a corporation; or
(b) A manager or managing member of a limited-liability company.
(Added to NAC by Sec’y of State, eff. 11-19-92; A by R018-21, 6-2-2023)
NAC 90.053 “Investment Adviser Registration Depository” defined. (NRS 90.750) “Investment Adviser Registration Depository” means the Investment Adviser Registration Depository operated by the Financial Industry Regulatory Authority, or its successor, to provide a system for the electronic registration of investment advisers and representatives of investment advisers.
(Added to NAC by Sec’y of State by R016-02, eff. 8-6-2002; A by R033-08, 6-17-2008)
NAC 90.061 “Nasdaq” defined. (NRS 90.750) “Nasdaq” means The Nasdaq Stock Market, Inc.
(Added to NAC by Sec’y of State, eff. 11-19-92; A by R016-02, 8-6-2002)
NAC 90.063 “Offering document” defined. (NRS 90.750)
1. “Offering document” includes, without limitation, a registration statement, prospectus, applicable agreement, charter, by-law, opinion of counsel and other opinion, specimen, indenture, consent to service of process and associated resolution, sales material, subscription agreement and any applicable exhibit.
2. As used in this section, “sales material” includes, without limitation, materials used in connection with the solicitation of purchasers of securities which are approved as sales literature or other related materials by the Securities and Exchange Commission, the Financial Industry Regulatory Authority or a state, as applicable.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.071 “Office of the Administrator” defined. (NRS 90.750) “Office of the Administrator” means the Office of the Secretary of State, Securities Division, 555 East Washington Avenue, Suite 5200, Las Vegas, Nevada 89101.
(Added to NAC by Sec’y of State, eff. 11-19-92; A 5-23-96)
NAC 90.075 “Representative of an investment adviser” defined. (NRS 90.750) “Representative of an investment adviser” has the meaning ascribed to it in NRS 90.278.
(Added to NAC by Sec’y of State, eff. 5-23-96)
NAC 90.076 “Securities Act of 1933,” “Securities Exchange Act of 1934,” “Investment Company Act of 1940” and “Investment Advisers Act of 1940” defined. (NRS 90.750) “Securities Act of 1933,” “Securities Exchange Act of 1934,” “Investment Company Act of 1940” and “Investment Advisers Act of 1940” mean the federal statutes of those names, as amended.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.078 “Securities industry personnel” defined. (NRS 90.750) “Securities industry personnel” includes, without limitation, broker-dealers, sales representatives, investment advisers, representatives of investment advisers and any other persons the Administrator designates as securities industry personnel pursuant to a rule or order.
(Added to NAC by Sec’y of State, eff. 10-30-97)
NAC 90.088 “Institutional buyer” interpreted. (NRS 90.750) The Administrator will interpret the term “institutional buyer” as used in subsection 6 of NRS 90.240 to include, without limitation, any accredited investor as defined under Rule 501(a)(1)-(4), (7) and (8) of Regulation D of the Securities Act of 1933.
(Added to NAC by Sec’y of State by R033-08, eff. 6-17-2008; A by R018-21, 6-2-2023)
NAC 90.090 “Investment contract” interpreted. (NRS 90.750) An “investment contract” as used in NRS 90.295, includes:
1. Any investment in a common enterprise with the expectation of profit to be derived substantially through the efforts of a promoter or other third party; or
2. Any investment by which:
(a) An offeree furnishes initial value to an offeror;
(b) A portion of this initial value is subjected to the risks of the enterprise;
(c) The furnishing of the initial value is induced by the offeror’s promises or representations which give rise to a reasonable understanding that a valuable benefit of some kind over and above the initial value will accrue to the offeree as a result of the operation of the enterprise; and
(d) The offeree does not receive the right to exercise practical or actual control over the managerial decisions of the enterprise.
(Added to NAC by Sec’y of State, eff. 11-19-92)
NAC 90.095 Construction of chapter. (NRS 90.750) Chapter 90 of NAC must be interpreted and applied in harmony with the National Securities Markets Improvement Act of 1996, Public Law 104-290.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.101 Severability of provisions. (NRS 90.750) If any provision of this chapter or the application thereof to any person or circumstance is held invalid, the invalidity does not affect any other provision or application of this chapter that can be given effect without the invalid provision or application, and to this end the provisions of this chapter are declared to be severable.
(Added to NAC by Sec’y of State, eff. 10-16-89)—(Substituted in revision for NAC 90.319)
ADMINISTRATION
NAC 90.315 Availability of forms. (NRS 90.750)
1. Except as otherwise provided in this section, any form referred to in this chapter that pertains to the registration of securities or the licensing of investment advisers may be obtained from the Internet website of the Securities and Exchange Commission.
2. The Small Company Offering Registration Form (Form U-7), the Uniform Investment Company Notice Filing (Form NF), the Uniform Application to Register Securities (Form U-1), the Uniform Consent to Service of Process (Form U-2), the Uniform Form of Corporate Resolution (Form U-2A), the Uniform Notice of Federal Crowdfunding Offering (Form U-CF) and the Regulation A — Tier 2 Offering notice filing form may be obtained from:
(a) The Office of the Administrator; or
(b) The Internet website of the Office of the Secretary of State.
3. Any form pertaining to the licensing of broker-dealers and sales representatives and any form relating to branch offices may be obtained from the Internet website of the Financial Industry Regulatory Authority.
4. The forms prescribed and authorized by the Administrator for use in this State are:
(a) The Year End Securities Sales Report (Nevada Form 500-3).
(b) The Notice of Withdrawal of Registration (Nevada Form 500-12).
(c) The Claim of Exemption From Securities Registration (Nevada Form N-9).
(d) The Nevada Child Support Statement.
Ê Any of these forms may be obtained from the Office of the Administrator or from the Internet website of the Secretary of State.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; 11-19-92; R016-02, 8-6-2002; R033-08, 6-17-2008; R018-21, 6-2-2023)
NAC 90.3155 Irrevocable consent to service of process. (NRS 90.750, 90.770)
1. An applicant for licensing as a broker-dealer satisfies the requirement set forth in NRS 90.770 concerning the filing of an irrevocable consent to service of process by filing with the Administrator the Uniform Consent to Service of Process (Form U-2) as required by NAC 90.330.
2. An applicant for licensing as a transfer agent satisfies the requirement set forth in NRS 90.770 concerning the filing of an irrevocable consent to service of process by filing with the Administrator the Uniform Consent to Service of Process (Form U-2) as required by NAC 90.374.
3. An applicant for licensing as a sales representative, assistant sales representative or representative of an investment adviser or an issuer who proposes to offer a security in this State through an agent satisfies the requirement set forth in NRS 90.770 concerning the filing of an irrevocable consent to service of process by filing with the Administrator:
(a) The Uniform Consent to Service of Process (Form U-2);
(b) The Uniform Application for Broker-Dealer Registration (Form BD); or
(c) The Uniform Application for Investment Adviser Registration (Form ADV).
(Added to NAC by Sec’y of State, eff. 5-23-96; A by R016-02, 8-6-2002; R033-08, 6-17-2008)
NAC 90.317 Issuance of written interpretations of provisions. (NRS 90.715, 90.750) The Division will not render a written interpretation of any provision of this chapter or chapter 90 of NRS.
(Added to NAC by Sec’y of State, eff. 10-16-89; A by R047-04, 5-25-2004)
NAC 90.318 Request for waiver or no-action letter. (NRS 90.715, 90.750)
1. A request for a waiver or no-action letter must be submitted in writing to the Office of the Administrator, accompanied by the fee set forth in NRS 90.715.
2. Two copies of the request for a waiver or no-action letter must be filed. The request for a waiver or no-action letter must contain:
(a) A brief summary of the statutory and regulatory provisions to which it pertains;
(b) A detailed statement of the relevant facts;
(c) A detailed discussion and analysis of the law as it relates to the facts;
(d) A statement of the legal authority for granting the request;
(e) A statement of the reasons a waiver or no-action letter is appropriate;
(f) A statement explaining any adverse or beneficial effect upon the public interest resulting from the granting of the request;
(g) A certification that, within the knowledge of the person on whose behalf the request is made, the transaction described is not directly or indirectly the subject of any pending judicial or administrative proceeding or, if such a proceeding is pending, a description of the proceeding;
(h) A certification that the transaction in question has not been commenced or, if it has commenced, a statement concerning its status; and
(i) An acknowledgment by the person on whose behalf the request is made that the request, together with any documents or information submitted and any response from the Division, is, except as otherwise provided in NRS 90.730, public information which may be released for publication.
3. A request for a waiver or no-action letter must be limited to the particular situation involving the problem at hand and must not attempt to include every possible type of situation that may arise in the future.
4. As used in this section, “no-action letter” has the meaning ascribed to it in NRS 90.715.
(Added to NAC by Sec’y of State, eff. 10-16-89; A by R047-04, 5-25-2004)
SECURITIES AGENTS
General Provisions
NAC 90.321 Adoption by reference of certain provisions of Financial Industry Regulatory Authority Rules; review of changes. (NRS 90.750)
1. The Administrator hereby adopts by reference chapters 2000 to 7000, inclusive, of the Financial Industry Regulatory Authority Rules, which are published and available, free of charge, on the Internet website of the Financial Industry Regulatory Authority.
2. The Administrator will periodically review the Financial Industry Regulatory Authority Rules and determine within 30 days after the review whether any change made to those rules is appropriate for application in this State. If the Administrator does not disapprove a change to an adopted rule within 30 days after the review, the change is deemed to be approved by the Administrator.
(Added to NAC by Sec’y of State by R016-02, eff. 8-6-2002; A by R033-08, 6-17-2008; R018-21, 6-2-2023)
NAC 90.325 Availability of registration information for Financial Industry Regulatory Authority examinations. (NRS 90.750) Registration information for appropriate Financial Industry Regulatory Authority examinations may be obtained from the Internet website of the Financial Industry Regulatory Authority.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; 11-19-92; 5-23-96; R016-02, 8-6-2002; R033-08, 6-17-2008; R018-21, 6-2-2023)
NAC 90.327 Unethical and dishonest practices. (NRS 90.420, 90.750)
1. A broker-dealer, sales representative, investment adviser, representative of an investment adviser or transfer agent who engages in any of the following acts or practices shall be deemed to have engaged in an unethical or dishonest practice within the meaning of paragraph (h) of subsection 1 of NRS 90.420:
(a) Engaging in any act or practice enumerated in NAC 90.328.
(b) In connection with any solicitation of the sale or purchase of a security that is not included in the Nasdaq or listed or approved for listing on a securities exchange described in paragraph (g) of subsection 2 of NRS 90.520, failing promptly to provide information requested by a customer, such as:
(1) The current prospectus concerning an offering;
(2) The most recently filed periodic report filed pursuant to section 13 of the Securities Exchange Act of 1934; or
(3) Any information required by Rule 15c2-11 of the Securities and Exchange Commission.
(c) Marking any order ticket or confirmation as unsolicited if the transaction is solicited.
(d) Failing to comply with any applicable provision of:
(1) The Financial Industry Regulatory Authority Rules as adopted by reference in NAC 90.321; or
(2) Any applicable rule of conduct or ethical standard promulgated by:
(I) The Securities and Exchange Commission;
(II) The Financial Industry Regulatory Authority or any other self-regulatory organization approved by the Securities and Exchange Commission; or
(III) Any other organization approved by the Administrator by written order.
(e) Receiving compensation in connection with referring a customer to an unlicensed investment adviser who is required to be licensed in this State.
2. The provisions of this section are not all-inclusive. Any act or practice not enumerated in subsection 1 may also be deemed an unethical or dishonest practice within the meaning of NRS 90.420.
(Added to NAC by Sec’y of State, eff. 10-16-89; A 11-19-92; R016-02, 8-6-2002; R033-08, 6-17-2008; R018-21, 6-2-2023)
NAC 90.328 Fraudulent practices. (NRS 90.570, 90.750)
1. A broker-dealer, sales representative, investment adviser, representative of an investment adviser or transfer agent who engages in any of the following acts or practices shall be deemed to have engaged in an act, practice or course of business which operates or would operate as a fraud within the meaning of NRS 90.570:
(a) Entering into a transaction with a customer in any security at an unreasonable price or at a price not reasonably related to the current market price of the security.
(b) Receiving an unreasonable commission or profit in a transaction with a customer in any security.
(c) Contradicting or negating the importance of any information contained in a prospectus or other offering materials with the intent to deceive or mislead another person.
(d) Using any advertising or sales presentation in a deceptive or misleading manner.
(e) In connection with the offer, sale or purchase of a security, falsely leading a customer to believe that the broker-dealer, sales representative, investment adviser, representative of an investment adviser or transfer agent is in possession of material information, not available to the public, which would affect the value of the security.
(f) In connection with the solicitation of a sale or purchase of a security, engaging in a pattern or practice of making contradictory recommendations concerning the sale or purchase to different investors with similar investment objectives, if the recommendations:
(1) Are made at or about the same time; and
(2) Are not justified by the particular circumstances of each investor.
(g) Failing to make a bona fide public offering of all the securities allotted to a broker-dealer for distribution by, among other acts:
(1) Transferring securities to a customer, another broker-dealer or a fictitious account with the understanding that the securities will be returned to the broker-dealer or his or her nominee; or
(2) Parking or withholding securities.
(h) In connection with the solicitation of the purchase or sale of any equity security traded over the counter, other than a security included in the Nasdaq Global Market:
(1) Recommending any speculative low-priced security to a customer without attempting to obtain information about:
(I) The other securities held by the customer;
(II) The financial situation of the customer; and
(III) Other data necessary to determine the suitability of the investment for the customer;
(2) Failing to disclose the firm’s bid and ask price of a particular security:
(I) At the time of solicitation; and
(II) At the time of execution on the confirmation;
(3) If the firm is a market maker at the time of the solicitation, failing to disclose, both at the time of solicitation and on the confirmation in connection with a principal transaction, a short inventory position in the firm’s account of more than 5 percent of the issued and outstanding shares of that class of securities of the issuer;
(4) Conducting any sale contests in a security;
(5) Failing or refusing, in connection with a principal transaction, to promptly execute a sell order after a solicited purchase by a customer;
(6) Soliciting a secondary market transaction if the broker-dealer, sales representative, investment adviser, representative of an investment adviser or transfer agent knows or should know that there has not been a bona fide distribution in the primary market;
(7) Effecting any transaction in or inducing the purchase or sale of any security by means of any manipulative, deceptive or other fraudulent device or contrivance, including, without limitation, the use of boiler room tactics or a fictitious or nominee account; or
(8) Failing to comply with any requirement for delivery of a prospectus promulgated under state or federal law.
Ê Nothing in this paragraph shall be deemed to preclude application of the general antifraud provisions of chapter 90 of NRS against any person for any practice similar in nature to the practices described in this paragraph.
2. The provisions of this section are not all-inclusive. Any act or practice not enumerated in subsection 1 may also be deemed an act, practice or course of business which operates or would operate as a fraud within the meaning of NRS 90.570.
(Added to NAC by Sec’y of State, eff. 10-16-89; A 11-19-92; R016-02, 8-6-2002; R033-08, 6-17-2008)
NAC 90.329 Notification of customers before assessing new charges for services performed. (NRS 90.750) A broker-dealer, sales representative, investment adviser, representative of an investment adviser or transfer agent shall notify a customer in writing at least 30 days before assessing any new charges for services performed. The notice must be placed on the front of the account statement or other document containing the notice. The notice must be printed in a type size which is equal to the type used to print any statement of charges or fees sent to the customer.
(Added to NAC by Sec’y of State, eff. 11-19-92; A by R016-02, 8-6-2002; R033-08, 6-17-2008)
NAC 90.3291 Merger and acquisition brokers: Exemption from licensing requirements under certain circumstances. (NRS 90.320, 90.750)
1. Except as provided in subsection 2, a merger and acquisition broker is exempt from the licensing requirements described in NRS 90.310.
2. A merger and acquisition broker is not exempt from licensing if the broker:
(a) Directly or indirectly, in connection with the transfer of ownership of an eligible privately held company, receives, holds, transmits or has custody of the funds or securities to be exchanged by the parties to the transaction;
(b) Engages on behalf of an issuer in a public offering of any class of securities that is registered or is required to be registered with the Securities and Exchange Commission under section 12 of the Securities Exchange Act of 1934, or with respect to which the issuer files or is required to file periodic information, documents and reports under section 15(d) of the Securities Exchange Act of 1934;
(c) Engages on behalf of any party in a transaction involving a public shell company; or
(d) Is subject to:
(1) Suspension or revocation of registration under section 15(b)(4) of the Securities Exchange Act of 1934;
(2) A statutory disqualification described in section 3(a)(39) of the Securities Exchange Act of 1934;
(3) A disqualification under the rules adopted by the Securities and Exchange Commission under section 926 of the Dodd-Frank Wall Street Reform and Consumer Protection Act;
(4) A final order described in paragraph (4)(H) of section 15(b) of the Securities Exchange Act of 1934; or
(5) Chapter 645 of NRS and fails to comply with that chapter.
3. Nothing in this section shall be construed to limit any other authority of the Administrator to exempt any person or class of persons from any provision of this chapter or chapter 90 of NRS.
4. As used in this section:
(a) “Control” means the power, directly or indirectly, to direct the management or policies of a company, whether through ownership of securities, by contract or otherwise. There is a presumption of control for any person who:
(1) Is a director, general partner, member or manager of a limited-liability company, or an officer who exercises executive responsibility or has a similar status or function to a director, general partner, member or manager;
(2) Has the right to vote 20 percent or more of a class of voting securities or the power to sell or direct the sale of 20 percent or more of a class of voting securities; or
(3) In the case of a partnership or limited-liability company, has the right to receive upon dissolution, or has contributed, 20 percent or more of the capital.
(b) “Eligible privately held company” means a company which:
(1) Does not have any class of securities registered or required to be registered with the Securities and Exchange Commission under section 12 of the Securities Exchange Act of 1934, or with respect to which the company files or is required to file periodic information, documents and reports under section 15(d) of the Act; and
(2) In the fiscal year ending immediately before the fiscal year in which the services of the merger and acquisition broker are initially engaged with respect to the securities transaction, and as determined by the historical financial accounting records of the company:
(I) The earnings of the company before interest, taxes, depreciation and amortization were less than $25,000,000;
(II) The gross revenues of the company were less than $250,000,000; or
(III) The company satisfied both sub-subparagraphs (I) and (II).
(c) “Merger and acquisition broker” means a broker and any person associated with a broker engaged in the business of effecting securities transactions solely in connection with the transfer of ownership of an eligible privately held company, regardless of whether that broker acts on behalf of a seller or buyer, through the purchase, sale, exchange, issuance, repurchase or redemption of, or a business combination involving, securities or assets of the eligible privately held company if:
(1) The broker reasonably believes that upon consummation of the transaction, any person acquiring securities or assets of the eligible privately held company, acting alone or in concert, will control and, directly or indirectly, be active in the management of the eligible privately held company or the business conducted with the assets of the eligible privately held company; and
(2) A person who is offered securities in exchange for securities or assets of the eligible privately held company, before becoming legally bound to consummate the transaction, receives or has reasonable access to the most recent fiscal year-end financial statements of the issuer of the securities as customarily prepared by its management in the normal course of operations and, if the financial statements of the issuer are audited, reviewed or compiled, any related statement by the independent accountant, a balance sheet dated not more than 120 days before the date of the exchange offer and information pertaining to the management, business, results of operations for the period covered by the foregoing financial statements and any material loss contingencies of the issuer.
(d) “Public shell company” is a company that at the time of a transaction with an eligible privately held company:
(1) Has any class of securities registered or required to be registered pursuant to section 12 of the Securities and Exchange Act of 1934, or with respect to which the company files or is required to file periodic information, documents and reports under section 15(d) of the Act;
(2) Has no or nominal operations; and
(3) Has:
(I) No or nominal assets;
(II) Assets consisting solely of cash and cash equivalents; or
(III) Assets consisting of any amount of cash and cash equivalents and nominal other assets.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.3292 Broker-dealers and sales representatives: Exemption from licensing requirements under certain circumstances. (NRS 90.320, 90.750)
1. A broker-dealer who:
(a) Is a resident of Canada; and
(b) Meets the conditions of paragraph (a) of subsection 1 of NRS 90.320,
Ê is exempt from the licensing requirements of NRS 90.310.
2. If a sales representative is acting for a broker-dealer who is exempt from the licensing requirements of NRS 90.310 pursuant to subsection 1, the sales representative is exempt from the licensing requirements of NRS 90.310.
(Added to NAC by Sec’y of State, eff. 10-30-97)
NAC 90.32923 Broker-dealers and investment advisers: Delay of transactions or disbursements to prevent exploitation of older or vulnerable persons. (NRS 90.614, 90.6145, 90.740, 90.750)
1. A broker-dealer or investment adviser may delay a transaction or disbursement from an account of an older person or vulnerable person or from an account from which an older person or vulnerable person is a beneficiary if:
(a) The broker-dealer, investment adviser or designated reporter reasonably believes, after initiating an internal review of the requested transaction or disbursement and the suspected exploitation, that the requested transaction or disbursement may result in the exploitation of the older person or vulnerable person.
(b) The broker-dealer or investment adviser:
(1) Immediately, but not later than 2 business days after the date of the delayed requested transaction or disbursement, provides written notification of the delay and the reason for the delay to all parties authorized to transact business on the account, other than any party that is reasonably believed to have engaged in the suspected or attempted exploitation of the older person or vulnerable person;
(2) Immediately, but not later than 2 business days after the date of the delayed requested transaction or disbursement, notifies the Administrator of the Securities Division of the Office of the Secretary of State and the Administrator of the Aging and Disability Services Division of the Department of Human Services; and
(3) Continues its internal review of the suspected or attempted exploitation of the older person or vulnerable person, as necessary, and provides status updates to the Administrator of the Securities Division and the Administrator of the Aging and Disability Services Division, respectively, upon request.
2. Any delay of a transaction or disbursement authorized by this section will expire upon the sooner of:
(a) A determination by the broker-dealer or investment adviser that the transaction or disbursement will not result in the exploitation of an older person or vulnerable person; or
(b) Fifteen business days after the date on which the broker-dealer or investment adviser first delayed a transaction or disbursement of the funds, unless either the Securities Division or Aging and Disability Services Division requests that the broker-dealer or investment adviser extend the delay, in which case the delay must expire not more than 25 business days after the date on which the broker-dealer or investment adviser first delayed a transaction or disbursement of the funds unless otherwise terminated or further extended by the Securities Division, the Aging and Disability Services Division or an order of a court of competent jurisdiction.
3. A court of competent jurisdiction may enter an order extending the delay of a transaction or the disbursement of funds or may order other protective relief based on the petition of:
(a) The Administrator of the Securities Division or the Administrator of the Aging and Disability Services Division, respectively;
(b) The broker-dealer or investment adviser that initiated the delay under this section; or
(c) Any other interested party.
4. A broker-dealer or investment adviser that, in good faith and exercising reasonable care, complies with this section shall not be penalized or sanctioned by the Administrator of the Securities Division for a delay in a transaction or disbursement.
5. As used in this section:
(a) “Exploitation” has the meaning ascribed to it in NRS 200.5092.
(b) “Older person” has the meaning ascribed to it in NRS 200.5092.
(c) “Vulnerable person” has the meaning ascribed to it in NRS 200.5092.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.3293 Investment advisers and representatives of investment advisers: Electronic transfer of fees to and filing of documents with certain depositories. (NRS 90.350, 90.750, 90.845, 90.847)
1. Pursuant to subsection 2 of NRS 90.350, the Administrator designates the Investment Adviser Registration Depository, or any other depository for electronic registration that is approved by the Administrator by order, to receive and store filings and collect related fees from investment advisers and representatives of investment advisers on behalf of the Administrator.
2. Except as otherwise provided in subsection 5 and NAC 90.3294, an investment adviser or representative of an investment adviser who is required by this chapter or chapter 90 of NRS to pay a fee to the Administrator or file a document with the Administrator, including, without limitation, an application, amendment, report or notice, must comply with that requirement by:
(a) Transferring the fee electronically to the depository designated or approved pursuant to subsection 1; or
(b) Filing the document electronically with the depository designated or approved pursuant to subsection 1,
Ê as applicable.
3. If the instructions accompanying a document that is required to be electronically filed pursuant to subsection 2 require a signature, the applicant or an authorized officer of the applicant, as required, shall affix his or her electronic signature to the document by typing his or her name in the appropriate fields and submitting the document to the depository designated or approved pursuant to subsection 1. If a document is submitted in the manner set forth in this subsection, the document shall be deemed to include the legal signature of the person whose name is typed on the document.
4. A document that is required to be electronically filed pursuant to subsection 2 shall be deemed to be filed with the Administrator when all the required fees are received and the document is filed with and accepted on behalf of the Administrator by the depository.
5. If a fee or document that an investment adviser or representative of an investment adviser is required by this chapter or chapter 90 of NRS to pay to or file with the Administrator cannot be paid to, filed with or accepted by the depository designated or approved pursuant to subsection 1, the fee or document must be directly paid to or filed with the Administrator, as applicable.
(Added to NAC by Sec’y of State by R016-02, eff. 8-6-2002)
NAC 90.32932 Investment advisers, representatives of investment advisers and federal covered advisers: Fiduciary duties; unethical business practices. (NRS 90.575, 90.750)
1. A person who is an investment adviser, a representative of an investment adviser or a federal covered adviser is a fiduciary and has a duty to act primarily for the benefit of the clients of the investment adviser, representative of the investment adviser or federal covered adviser, as applicable.
2. An investment adviser, representative of an investment adviser or federal covered adviser shall not violate subsection 1 by engaging in unethical business practices, including, without limitation, the following conduct:
(a) If investment supervisory services are provided to a client, recommending to the client the purchase, sale or exchange of any security without reasonable grounds to believe that the recommendation is suitable for the client on the basis of information furnished by the client after reasonable inquiry relating to the investment objectives, financial situation and needs of the client and any other information known by the investment adviser;
(b) Exercising discretionary power in placing an order for the purchase or sale of securities for a client without obtaining written discretionary authority from the client within 10 business days after the date of the first transaction placed, pursuant to the oral discretionary authority of the client, unless the discretionary power relates solely to the price at which, or the time when, an order involving a definite amount of a specified security must be executed, or both;
(c) Inducing trading in the account of a client that is excessive in size or frequency in view of the financial resources, investment objectives and character of the account in light of the fact that the investment adviser or a representative of the investment adviser in the situation can directly benefit from the number of securities transactions effected in the account of the client;
(d) Placing an order to purchase or sell a security for the account of a client without authority;
(e) Placing an order to purchase or sell a security for the account of a client upon instruction of a third party without first having obtained a written third-party trading authorization from the client;
(f) Loaning money to a client unless:
(1) The investment adviser is a financial institution engaged in the business of loaning funds; or
(2) The client is an affiliate of the investment adviser;
(g) Borrowing money or securities from a client unless the client is:
(1) A broker-dealer;
(2) An affiliate of the investment adviser; or
(3) A financial institution engaged in the business of loaning funds;
(h) Misrepresenting to an advisory client or prospective advisory client:
(1) The qualifications of the investment adviser or any employee of the investment adviser; or
(2) The nature of the advisory services being offered or fees to be charged for the service;
(i) Omitting or failing to state to an advisory client or prospective advisory client a material fact necessary to make a comprehensive statement regarding:
(1) The qualifications of the investment adviser or any employee of the investment adviser; or
(2) The nature of the advisory services being offered or fees being charged for the services of the investment adviser;
(j) Providing a report or recommendation to any advisory client prepared by someone other than the investment adviser without disclosing that fact to the client;
(k) Charging a client an unreasonable advisory fee;
(l) Failing to disclose to a client, in writing before rendering advice, any material conflict of interest relating to the investment adviser, or any of its employees, which could reasonably be expected to impair the rendering of unbiased and objective advice, including, without limitation, a conflict of interest relating to:
(1) A compensation arrangement connected with advisory services to a client that is in addition to compensation for the advisory services; or
(2) Charging a client an advisory fee for rendering advice when a commission for executing securities transactions pursuant to such advice will be received by the adviser or its employees;
(m) Making a guarantee to a client that a specific result will be achieved, regardless of whether the guarantee relates to a gain or loss;
(n) Disclosing the identity, affairs or investments of a client unless:
(1) Required by law; or
(2) The consent of the client is obtained by the investment adviser or a representative of the investment adviser;
(o) Taking any action, directly or indirectly, with respect to a security or fund in which the client has a beneficial interest, where the investment adviser has custody or possession of the security or fund and the action of the investment adviser violates NAC 90.3852;
(p) Entering into, extending or renewing an investment advisory contract, unless the contract is:
(1) In writing; and
(2) Discloses, in substance:
(I) The services to be provided;
(II) The term of the contract;
(III) The advisory fee;
(IV) The formula for computing the fee described in sub-subparagraph (III);
(V) The amount of the prepaid fee to be returned in the event of contract termination or non-performance;
(VI) Whether the contract grants discretionary power to the investment adviser; and
(VII) That an assignment of the contract must not be made by the investment adviser without the consent of the parties to the contract;
(q) Failing to establish, maintain and enforce written policies and procedures reasonably designed to prevent the misuse of material nonpublic information, the use of which is contrary to the provisions of section 204A of the Investment Advisers Act of 1940;
(r) Entering into, extending or renewing any advisory contract contrary to the provisions of section 205 of the Investment Advisers Act of 1940;
(s) Indicating in an advisory contract any condition, stipulation or provision which binds any person to waive compliance with a provision of chapter 90 of NRS or the Investment Advisers Act of 1940, or any other practice contrary to the provisions of section 215 of the Investment Advisers Act of 1940;
(t) Engaging in any act, practice or course of business which is fraudulent, deceptive or manipulative and contrary to the provisions of section 206(4) of the Investment Advisers Act of 1940, notwithstanding the fact that the investment adviser or a representative of the investment adviser is not registered or required to be registered under section 203 of the Investment Advisers Act of 1940;
(u) Engaging in conduct or any act, indirectly or through or by any other person, which would be unlawful for such person to do directly under the provisions of chapter 90 of NRS or any rule or regulation adopted by the Administrator;
(v) Accessing the account of a client by using the unique identifying information of the client; or
(w) Failing to establish, maintain and enforce a required policy or procedure.
3. The provisions of this section apply to a federal covered adviser:
(a) To the extent that the alleged conduct violating subsection 1 is fraudulent or deceptive; and
(b) As permitted by section 203A of the Investment Advisers Act of 1940 and the National Securities Markets Improvement Act of 1996, Public Law No. 104-290.
4. The provisions of paragraph (r) of subsection 2 apply to all investment advisers and representatives of investment advisers who are registered or required to be registered pursuant to law or regulation, notwithstanding whether the adviser or representative would be exempt from federal registration pursuant to section 203(b) of the Investment Advisers Act of 1940.
5. The provisions of paragraph (j) of subsection 2 do not apply to an investment adviser who:
(a) Uses published research reports or statistical analyses to render advice; or
(b) Orders any such report or analysis in the normal course of providing service.
6. As used in this section, “unique identifying information”:
(a) Includes, without limitation, the username and password used by a client to access the account of the client; and
(b) Does not include data aggregation software if:
(1) The investment adviser does not know, or have access to, the password of the client used for the client account;
(2) There is an agreement between the data aggregation software company and the custodian or online account platform which permits back-door access to the client account; and
(3) The data is supplied in a manner in which the investment adviser may only view the information and cannot effectuate any changes to the underlying account of the client.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.32934 Investment advisers, representatives of investment advisers and federal covered advisers: Advertisements. (NRS 90.420, 90.750)
1. An investment adviser, representative of an investment adviser or federal covered adviser shall be deemed to have engaged in an unethical or dishonest practice within the meaning of paragraph (h) of subsection 1 of NRS 90.420 if the adviser or representative, directly or indirectly, uses any advertisement:
(a) To refer to a testimonial of any kind relating to:
(1) The adviser or a representative of the investment adviser; or
(2) The advice, analysis, report or other service rendered by the adviser or representative of the investment adviser;
(b) To refer to past specific recommendations of the adviser or representative of the investment adviser that were or would have been profitable to any person, unless the adviser or representative of the investment adviser furnishes or offers to furnish a list of all recommendations made by the adviser or representative of the investment adviser within the immediately preceding 1-year period, if the advertisement or list includes, without limitation:
(1) The name of each security recommended;
(2) The date and nature of each recommendation;
(3) The market price of the security at that time and the price at which the recommendation was to be acted upon by the adviser or representative of the investment adviser;
(4) The most recently available market price of each such security; and
(5) A legend on the first page of the advertisement or list, in prominent print or type, that states that the reader should not assume that recommendations made in the future will be profitable or will equal the performance of the securities in the advertisement or list;
(c) To represent that any graph, chart, formula or other device being offered may, in and of itself, be used to determine which securities to buy or sell, or when to buy or sell the securities;
(d) To represent, directly or indirectly, that any graph, chart, formula or other device being offered will assist any person in making any decision of the person as to which securities to buy or sell, or when to buy or sell them, without prominently disclosing in such advertisement the limitations thereof and the difficulties with respect to the use of the graph, chart, formula or other device;
(e) To represent that any report, analysis or other service will be furnished for free or without charge, unless such report, analysis or other service actually is or will be furnished entirely free and without any direct or indirect condition or obligation;
(f) To represent that the Administrator or the Division has approved any advertisement; or
(g) That contains any untrue statement of a material fact or that is otherwise false or misleading.
2. The provisions of this section apply to federal covered advisers as permitted by section 203A of the Investment Advisers Act of 1940 and the National Securities Markets Improvement Act of 1996, Public Law No. 104-290.
3. As used in this section, “advertisement” includes, without limitation, any notice, circular, letter or other written communication addressed to more than one person, or any notice or other announcement in an electronic or paper publication, by radio or television or by any medium that offers:
(a) Any analysis, report or publication concerning securities;
(b) Any analysis, report, publication, graph, chart, formula or other device that is to be used in making any determination as to when to buy or sell any security or which security to buy or sell; or
(c) Any other investment advisory service with regard to securities.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.3294 Federal covered advisers: Filing, renewal and updates to Form ADV. (NRS 90.340, 90.750)
1. Except as otherwise provided in subsection 2, a federal covered adviser shall file a notice with the Administrator in the manner set forth in NAC 90.3293. The notice must consist of:
(a) An executed Uniform Application for Investment Adviser Registration (Form ADV); and
(b) The fee required by NRS 90.360 for an investment adviser.
2. If the depository designated or approved pursuant to subsection 1 of NAC 90.3293 does not allow the filing of Part 2 of Form ADV and the Administrator so requests, the federal covered adviser shall submit Part 2 of Form ADV to the Administrator within 5 days after the Administrator requests the federal covered adviser to submit the form.
3. A federal covered adviser must renew the notice required by subsection 1 annually, on or before December 31, by paying the fee required by NRS 90.360 for an investment adviser to the Administrator in the manner set forth in NAC 90.3293.
4. A federal covered adviser shall file with the Administrator in the manner set forth in NAC 90.3293 any amendments to the most recent Form ADV filed by the federal covered adviser that are required by the instructions set forth in Form ADV.
5. The provisions of this section do not apply to a federal covered adviser that is exempt from the licensing requirements pursuant to paragraph (a) of subsection 1 of NRS 90.340.
(Added to NAC by Sec’y of State, eff. 10-30-97; A by R016-02, 8-6-2002; R018-21, 6-2-2023)
NAC 90.3296 Federal covered advisers: Employment restrictions. (NRS 90.750)
1. Except as otherwise provided in subsection 3, a federal covered adviser shall not employ, in order to engage in any activity related to the sale of securities in this State, any person having a place of business in this State who is suspended or barred from association with a broker-dealer or investment adviser by the Administrator.
2. A federal covered adviser does not violate this section unless the federal covered adviser knows or in the exercise of reasonable care should know of the suspension or bar.
3. Upon request from a federal covered adviser and for good cause shown, the Administrator may, by order, waive the prohibition of this section with respect to a particular person who has been suspended or barred.
(Added to NAC by Sec’y of State, eff. 10-30-97)
NAC 90.3298 Securities industry personnel: Use of Internet for distribution of information. (NRS 90.320, 90.340, 90.750)
1. Securities industry personnel who use the Internet to distribute information on available products and services shall not be deemed to be transacting business in this State for the purposes of NRS 90.310 or 90.330 if the information so distributed:
(a) Contains a legend clearly stating that the securities industry personnel may only transact business in those states in which they are licensed or otherwise excluded from applicable state licensing requirements;
(b) Contains a mechanism which reasonably ensures that a subsequent interaction between prospective customers or clients residing in states where the securities industry personnel are not licensed is limited so that the securities industry personnel are not required to be licensed by the state and the securities are not required to be registered;
(c) Does not involve the actual effecting of securities trades;
(d) Does not involve the rendering of personalized investment advice for compensation;
(e) Is limited to the dissemination of information about a product or service; and
(f) Prominently discloses the affiliation of the sales representative with the broker-dealer or the representative of an investment adviser with the investment adviser.
2. The broker-dealer or investment adviser shall:
(a) Review and approve the content of the information distributed on the Internet;
(b) Specifically authorize the distribution of that information regarding the product or service; and
(c) Recognize that the sales representative or representative of the investment adviser is acting within the scope of his or her authority.
(Added to NAC by Sec’y of State, eff. 10-30-97)
Broker-Dealers
NAC 90.330 Applicant for licensing: Filing requirements; payment of fee. (NRS 90.350, 90.390, 90.750)
1. An applicant for licensing as a broker-dealer who is not registered with the Financial Industry Regulatory Authority must pay to the Office of the Administrator the fee required by NRS 90.360 and file an application with the Office of the Administrator. The application must include:
(a) The Uniform Application for Broker-Dealer Registration (Form BD);
(b) The Uniform Consent to Service of Process (Form U-2);
(c) A balance sheet prepared in the manner prescribed in NAC 90.335;
(d) A certificate that he or she has qualified to do business in this State, if qualification is required by NRS 80.010;
(e) A fidelity bond in the amount of $10,000, issued by a corporate surety qualified to do business in this State, or proof of membership in the Securities Investor Protection Corporation;
(f) The Uniform Application for Securities Industry Registration or Transfer (Form U-4) for a designated official of the applicant; and
(g) Proof of successful completion by one or more designated employees of the applicant of the appropriate examination required by the Financial Industry Regulatory Authority for a principal.
2. The original signature of the applicant must be used on the Uniform Application for Broker-Dealer Registration (Form BD) and the Uniform Consent to Service of Process (Form U-2) required by paragraphs (a) and (b) of subsection 1.
3. An applicant for licensing as a broker-dealer who is registered with the Financial Industry Regulatory Authority must:
(a) File with the Central Registration Depository the documents required for licensing pursuant to paragraphs (a) to (d), inclusive, and paragraphs (f) and (g) of subsection 1; and
(b) Pay to the Central Registration Depository the fees required by NRS 90.360.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; 5-23-96; R016-02, 8-6-2002; R033-08, 6-17-2008; R018-21, 6-2-2023)
NAC 90.335 Filing of balance sheet. (NRS 90.350, 90.750) The balance sheet filed pursuant to NAC 90.330 by an applicant for licensing as a broker-dealer:
1. Must be prepared in accordance with generally accepted accounting principles;
2. Must be accompanied by a report of audit containing the unqualified opinion of an independent certified public accountant;
3. In the case of an applicant who is not acting as a broker-dealer in another state, must be prepared as of a date not earlier than 60 days before the date of filing; and
4. In the case of an applicant who is acting as a broker-dealer in another state, must consist of:
(a) The most recent audited financial statement relating to the applicant; and
(b) An interim unaudited financial statement, prepared as of a date not earlier than 60 days before the date of filing.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)
NAC 90.340 Failure to comply with Rule 15c3-1: Disciplinary proceedings. (NRS 90.420, 90.750) Disciplinary proceedings may be commenced pursuant to NRS 90.420 against a broker-dealer who fails to comply with the provisions of Rule 15c3-1 of the Securities and Exchange Commission, relating to capital requirements.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)
NAC 90.342 Compliance with certain provisions of Financial Industry Regulatory Authority Rules. (NRS 90.390, 90.750) For the purposes of subsection 5 of NRS 90.390, each licensed broker-dealer shall comply with the provisions of Rules 4511 to 4515, inclusive, and 7440 of the Financial Industry Regulatory Authority Rules, as adopted by reference in NAC 90.321, whether or not he or she is a member of the Financial Industry Regulatory Authority.
(Added to NAC by Sec’y of State by R016-02, eff. 8-6-2002; A by R033-08, 6-17-2008; R018-21, 6-2-2023)
NAC 90.345 Expiration and renewal of license. (NRS 90.350, 90.390, 90.750)
1. The license of a broker-dealer expires on December 31 of each year. A broker-dealer must renew his or her license annually by paying the fee required by NRS 90.360 and, if the provisions of subsection 2 are applicable to the broker-dealer, by filing the documents required by that subsection. Except as otherwise provided in subsection 3, the fee must be paid to and the documents must be filed with the Office of the Administrator on or before December 31.
2. A broker-dealer who is not registered with the Financial Industry Regulatory Authority, or who is not registered under the Securities Exchange Act of 1934, must file with the Office of the Administrator:
(a) A written request for renewal of his or her license; and
(b) A fidelity bond, in a form acceptable to the Administrator, or proof of membership in the Securities Investor Protection Corporation.
3. A broker-dealer who is a member of the Financial Industry Regulatory Authority must pay the fee required by NRS 90.360 to the Central Registration Depository on or before December 31.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; R016-02, 8-6-2002; R033-08, 6-17-2008; R018-21, 6-2-2023)
NAC 90.350 Withdrawal from licensing. (NRS 90.750, 90.847)
1. Except as otherwise provided in subsection 2, a broker-dealer who withdraws from licensing in this State shall file with the Office of the Administrator the Uniform Request for Broker-Dealer Withdrawal (Form BDW).
2. If a broker-dealer who withdraws from licensing is a member of the Financial Industry Regulatory Authority and is withdrawing from licensing in all states in which he or she is licensed, the broker-dealer shall file the request for withdrawal with the Central Registration Depository.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; R016-02, 8-6-2002; R033-08, 6-17-2008)
NAC 90.351 Registration of sales representatives by broker-dealers. (NRS 90.750)
1. Except as otherwise provided in subsection 2, a broker-dealer may not make or maintain the registration of a sales representative if the registration is for:
(a) A person who is no longer active in the security business of the broker-dealer;
(b) A person who no longer functions as a sales representative; or
(c) The sole purpose of avoiding any applicable examination requirement.
2. A broker-dealer may make or maintain the registration of a sales representative if the registration is for a person who performs legal, compliance, internal audit, back-office operations or similar responsibilities for the broker-dealer or other sales representative of the broker-dealer.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
Sales Representatives
NAC 90.355 Applicant for licensing: Filing requirements; payment of fee; required examinations. (NRS 90.350, 90.360, 90.750, 90.845, 90.847)
1. Except as otherwise provided in this section, an applicant for licensing as a sales representative must include in his or her application the Uniform Application for Securities Industry Registration or Transfer (Form U-4) with the applicant’s original signature and:
(a) Proof of successful completion of the appropriate Financial Industry Regulatory Authority examination; or
(b) Proof of waiver of those examinations.
2. If an applicant is to be licensed for a broker-dealer who is a member of the Financial Industry Regulatory Authority, the documents required by this section and the fee required by NRS 90.360 must be filed with and paid to the Central Registration Depository. In any other case, the documents and the fee must be filed with and paid to the Administrator.
3. An applicant who is in good standing as a sales representative with the Securities Association of the United Kingdom may provide proof of successful completion of the Series 17 Limited Registered Representative Examination of the Financial Industry Regulatory Authority in lieu of the Series 7 General Securities Representative Examination, if required pursuant to the provisions of paragraph (a) of subsection 1. However, if that applicant engages in the solicitation, purchase or sale of municipal securities as that phrase is defined in section 3(a)(29) of the Securities Exchange Act of 1934, he or she must also apply for registration as a Municipal Securities Representative with the Financial Industry Regulatory Authority and pass the Series 52 Municipal Securities Representative Examination.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; 11-19-92; 5-23-96; R033-08, 6-17-2008; R018-21, 6-2-2023)
NAC 90.360 Cessation of employment or contractual relationship with broker-dealer. (NRS 90.350, 90.360, 90.380, 90.750, 90.845, 90.847)
1. The license of a sales representative terminates upon the withdrawal, cancellation or termination of his or her employment or contractual relationship with a broker-dealer. Except as otherwise provided in subsection 2, the sales representative, broker-dealer or issuer shall file with the Office of the Administrator the Uniform Termination Notice for Securities Industry Registration (Form U-5).
2. In the case of the termination, cancellation or withdrawal of a sales representative who is a member of the Financial Industry Regulatory Authority, the notice referred to in subsection 1 must be submitted by the broker-dealer to the Central Registration Depository.
3. A sales representative whose employment or contractual relationship with a broker-dealer ceases and who intends to continue to transact business in this State as a sales representative must file a new application for a license, together with the required fee. If the sales representative is applying for a license with a broker-dealer who is a member of the Financial Industry Regulatory Authority, the application and fee may be processed through the relicensing program of the Central Registration Depository.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; R016-02, 8-6-2002; R033-08, 6-17-2008)
NAC 90.365 Expiration and renewal of license. (NRS 90.350, 90.360, 90.750, 90.845)
1. The license of a sales representative expires on December 31 of each year. Except as otherwise provided in subsection 2, a sales representative must renew his or her license annually by paying to the Administrator the fee required by NRS 90.360 and filing with the Administrator a written request for renewal of his or her license. The fee must be paid and the request for renewal filed on or before December 31.
2. If the sales representative is licensed for a broker-dealer who is a member of the Financial Industry Regulatory Authority, no request for renewal is required and the fee required by NRS 90.360 must be paid to the Central Registration Depository on or before December 31.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; R016-02, 8-6-2002; R033-08, 6-17-2008)
NAC 90.368 Licensing as representative of investment adviser: Exemption from licensing requirements under certain circumstances. (NRS 90.340, 90.750)
1. A sales representative who is:
(a) Licensed pursuant to NRS 90.310;
(b) Not employed in the offer or sale of investment advice unless as part of a wrap fee program; and
(c) Employed by:
(1) A broker-dealer licensed pursuant to NRS 90.310 and 90.330; or
(2) A broker-dealer licensed pursuant to NRS 90.310 who offers investment advice provided by an investment adviser licensed pursuant to NRS 90.330,
Ê is exempt from licensing under NRS 90.330.
2. As used in this section:
(a) “Sales representative” has the meaning ascribed to it in NRS 90.285.
(b) “Wrap fee program” means a program that charges a client a fee which is not directly based upon transactions in the client’s account for:
(1) Investment advisory services, including portfolio management and advice concerning the selection of other investment advisers, and the execution of transactions; or
(2) Advice relating to the allocation of the assets of a client among investment companies or to investments within an investment company, if the adviser or a related person serves as an investment adviser, administrator or a principal underwriter for an investment company. As used in this subsection, “related person” means any officer, director or partner of an adviser or any person directly or indirectly controlling, controlled by or under common control with the adviser.
(Added to NAC by Sec’y of State, eff. 9-15-94)
NAC 90.369 Licensing requirements inapplicable under certain circumstances. (NRS 90.320, 90.750) The provisions of NRS 90.310 do not apply to a sales representative acting for an issuer effecting offers to sell or sales of securities if:
1. The securities are set forth in subparagraph (3) of paragraph (b) of section 18 of the Securities Act of 1933, or subsubparagraph (D) of subparagraph (4) of paragraph (b) of section 18 of the Securities Act of 1933, and the sales representative is not paid a commission or other compensation, directly or indirectly, for soliciting any person in this State; or
2. The transactions in this State are limited to only those transactions set forth in subparagraph (3) of paragraph (i) of section 15 of the Securities Exchange Act of 1934.
(Added to NAC by Sec’y of State, eff. 10-30-97; A by R018-21, 6-2-2023)
NAC 90.3695 Affiliation with registered branch office required. (NRS 90.380, 90.750) Notwithstanding the Financial Industry Regulatory Authority Rules adopted by reference in NAC 90.321, any sales representative located in and working from this State must be affiliated with an associated registered branch office that is physically located in this State.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
Assistant Sales Representatives
NAC 90.371 Licensing requirements; expiration and renewal of license. (NRS 90.350, 90.360, 90.380, 90.750, 90.845, 90.847)
1. A person desiring to transact business as an assistant sales representative must apply to the Administrator for licensure.
2. An applicant for licensure as an assistant sales representative must include in his or her application the Uniform Application for Securities Industry Registration or Transfer (Form U-4) with the applicant’s original signature and:
(a) Proof of successful completion of the Financial Industry Regulatory Authority Qualification Examination for Assistant Representative-Order Processing (Series 11); or
(b) Proof of waiver of that examination.
3. Such an applicant must pay the fee required by NRS 90.360 for a sales representative.
4. If an applicant is to be licensed for a broker-dealer who is a member of the Financial Industry Regulatory Authority, the documents and fee required by this section must be filed with and paid to the Central Registration Depository. In any other case, the documents and the fee must be filed with and paid to the Administrator.
5. The license of an assistant sales representative expires on December 31 of each year. An assistant sales representative must renew his or her license annually, on or before December 31, by paying the fee required by NRS 90.360 for a sales representative.
(Added to NAC by Sec’y of State, eff. 11-19-92; A by R016-02, 8-6-2002; R033-08, 6-17-2008)
NAC 90.373 Restrictions on activities and compensation. (NRS 90.380, 90.750)
1. An assistant sales representative shall not:
(a) Solicit a transaction or a new account on behalf of a broker-dealer;
(b) Render investment advice;
(c) Make recommendations to customers regarding the appropriateness of a securities transaction;
(d) Effect transactions in a securities market on behalf of a broker-dealer; or
(e) Act as an assistant sales representative for more than one broker-dealer at any one time.
2. The activities of an assistant sales representative may only be conducted at a business location of the broker-dealer which is under the direct supervision of an appropriately registered principal of the broker-dealer.
3. A broker-dealer may only compensate an assistant sales representative on an hourly wage or salaried basis and may not in any way, directly or indirectly, relate the compensation to the number or size of the transactions effected for customers. This provision does not prohibit persons registered in this capacity from receiving bonuses or other compensation based on a member’s profit-sharing plan or similar arrangement.
(Added to NAC by Sec’y of State, eff. 11-19-92)
Transfer Agents
NAC 90.374 Applicant for licensing: Filing requirements. (NRS 90.350, 90.750)
1. An applicant for licensing as a transfer agent must file an application with the Administrator. The application must include:
(a) A copy of the most recent Uniform Form for Registration as a Transfer Agent filed by the applicant (SEC Form TA-1);
(b) The Uniform Consent to Service of Process (Form U-2);
(c) A balance sheet prepared in the manner prescribed in NAC 90.335 for an applicant for licensing as a broker-dealer; and
(d) A certificate that the applicant has qualified to do business in this State, if qualification is required by NRS 80.010.
2. The original signature of the applicant must be used on the forms required pursuant to paragraphs (a) and (b) of subsection 1.
(Added to NAC by Sec’y of State by R033-08, eff. 6-17-2008)
NAC 90.3743 Expiration and renewal of license. (NRS 90.380, 90.750) The license of a transfer agent expires on December 31 of each year. A transfer agent must renew his or her license annually.
(Added to NAC by Sec’y of State by R033-08, eff. 6-17-2008)
NAC 90.3745 Compliance with certain provisions of Financial Industry Regulatory Authority Rules. (NRS 90.750) Each licensed transfer agent shall comply with the provisions of Rules 4511 to 4515, inclusive, and 7440 of the Financial Industry Regulatory Authority Rules, as adopted by reference in NAC 90.321, whether or not the transfer agent is a member of the Financial Industry Regulatory Authority.
(Added to NAC by Sec’y of State by R033-08, eff. 6-17-2008; A by R018-21, 6-2-2023)
NAC 90.3747 Withdrawal from licensing. (NRS 90.750) A transfer agent who withdraws from licensing in this State shall file with the Administrator a Notice of Withdrawal From Registration as Transfer Agent (SEC Form TA-W).
(Added to NAC by Sec’y of State by R033-08, eff. 6-17-2008)
Investment Advisers
NAC 90.375 Applicant for initial license: Filing requirements; payment of fee. (NRS 90.350, 90.360, 90.750, 90.845, 90.847)
1. An applicant for an initial license as an investment adviser must file an application with the Administrator in the manner set forth in NAC 90.3293. The application must include:
(a) The Uniform Application for Investment Adviser Registration (Form ADV), completed in accordance with the instructions accompanying that application;
(b) Proof:
(1) Of successful completion by the applicant, if he or she is a natural person, or by an owner, officer or director of the applicant if the applicant is not a natural person, of:
(I) The Uniform Investment Adviser Law Examination (Series 65); or
(II) The Uniform Combined State Law Examination (Series 66) and the General Securities Registered Representative Examination (Series 7); or
(2) That the applicant, if he or she is a natural person, or an owner, officer or director of the applicant if the applicant is not a natural person, holds a professional designation listed in subsection 3 of NAC 90.391;
(c) The Uniform Application for Securities Industry Registration or Transfer (Form U-4) which is signed by the person submitting proof of the requirements set forth in paragraph (b); and
(d) Such other information as the Administrator may reasonably require.
2. In addition to the requirements set forth in subsection 1, an applicant for an initial license as an investment adviser must pay the fee required by NRS 90.360 to the Administrator in the manner set forth in NAC 90.3293.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; 11-19-92; 5-23-96; R016-02, 8-6-2002)
NAC 90.380 Expiration and renewal of license; filing of amendments and updates to Form ADV. (NRS 90.350, 90.360, 90.750, 90.845, 90.847)
1. The license of an investment adviser expires on December 31 of each year. An investment adviser must renew his or her license annually, on or before December 31, by paying the fee required by NRS 90.360 to the Administrator in the manner set forth in NAC 90.3293.
2. An investment adviser shall file with the Administrator in the manner set forth in NAC 90.3293 any amendments to the most recent Form ADV filed by the investment adviser that are required by the instructions set forth in the Uniform Application for Investment Adviser Registration (Form ADV) within 30 days after the event that requires the filing of the amendment.
3. Within 90 days after the end of the fiscal year, an investment adviser must file an updated Form ADV with the Administrator in the manner set forth in NAC 90.3293.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; R016-02, 8-6-2002)
NAC 90.385 Withdrawal from licensing. (NRS 90.750, 90.847) An investment adviser who withdraws from licensing shall file with the Administrator, in the manner set forth in NAC 90.3293, the Uniform Notice of Withdrawal From Registration as an Investment Adviser (Form ADV-W).
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; R016-02, 8-6-2002)
NAC 90.3852 Custody of client funds and securities. (NRS 90.450, 90.750)
1. Except as otherwise provided in this section, it is unlawful and deemed to be a fraudulent, deceptive and manipulative act, practice and course of business for an investment adviser, whether licensed or required to be licensed, to have custody of client funds or securities.
2. An investment adviser, whether licensed or required to be licensed, may have custody of client funds and securities if:
(a) The investment adviser promptly notifies the Administrator on a Uniform Application for Investment Adviser Registration (Form ADV) that the investment adviser has or may have custody of the client funds and securities;
(b) Except as otherwise provided in subsection 9, a qualified custodian maintains the client funds and securities:
(1) In a separate account for each client, the account of which must be designated by the name of the client; or
(2) In an account that contains only the client funds and securities and which is:
(I) In the name of the investment adviser, as agent or trustee for the client; or
(II) In the case of a pooled investment vehicle managed by the investment adviser, in the name of the pooled investment vehicle;
(c) Except as otherwise provided in subsection 10, the investment adviser notifies each client whose funds or securities are maintained in an account described in paragraph (b), the notification of which must:
(1) Be sent to the client:
(I) Upon the opening of the account; and
(II) At any time there is a change to the information described in subparagraph (2); and
(2) Include, without limitation:
(I) The name and address of the qualified custodian;
(II) The manner in which the client funds and securities are maintained; and
(III) If the investment adviser sends an account statement to the client, a statement directing the client to compare the account statement of the investment adviser with the account statement of the qualified custodian;
(d) Except as otherwise provided in subsection 10, the investment adviser has a reasonable basis, after due inquiry, for believing that the qualified custodian described in paragraph (b) sends, at least quarterly, to each client for which the qualified custodian maintains funds and securities and to each person described in subparagraph (1) of paragraph (e), if applicable, an account statement which includes, without limitation:
(1) The amount of funds and type of securities in the account at the end of the statement period; and
(2) Each transaction during the statement period;
(e) The investment adviser is a general partner of a limited partnership or managing member of a limited-liability company, or the investment adviser otherwise holds a comparable position for another type of pooled investment vehicle and the investment adviser:
(1) Enters into a written agreement with an independent party who is obliged to act in the best interest of the limited partners, members or other beneficial owners to review all fees, expenses and capital withdrawals from the accounts described in paragraph (b); and
(2) Sends all invoices and receipts to the independent party described in subparagraph (1). The invoices and receipts must include, without limitation, the amount of the fee, expenses or capital withdrawal and the method of calculation, such that the independent party may:
(I) Determine that the payment is in accordance with the standards of the pooled investment vehicle, including, without limitation, any standard generally established in the partnership agreement or membership agreement, as applicable; and
(II) Forward to the qualified custodian approval for payment of the invoice with a copy to the investment adviser;
(f) Except as otherwise provided in subsections 10 and 11, the client funds and securities are verified by actual examination at least once during each calendar year by an independent certified public accountant pursuant to a written agreement between the investment adviser and the independent certified public accountant; and
(g) The investment adviser maintains, or the investment adviser has custody because a related person maintains, the client funds or securities as a qualified custodian in connection with any advisory services the investment adviser provides to clients and if:
(1) The independent certified public accountant the investment adviser retains to perform the independent verification required by paragraph (f) is registered with and subject to regular inspection by, as of the commencement of the professional engagement period and as of each calendar year-end, the Public Company Accounting Oversight Board in accordance with its rules; and
(2) The investment adviser obtains, or receives from its related person, within 6 months of becoming subject to this paragraph and thereafter not less frequently than once each calendar year, a written internal control report.
3. A client may designate an independent representative to receive, on his or her behalf, the notices and account statements described in paragraphs (d) and (e) of subsection 2.
4. With respect to shares of an open-end company, the investment adviser may use the transfer agent of the open-end company in lieu of a qualified custodian for the purpose of satisfying the conditions set forth in subsection 2.
5. The examination described in paragraph (f) of subsection 2 must:
(a) Be performed at a time that is chosen by the independent certified public accountant who is a party to the written agreement; and
(b) Occur without prior notice or announcement to the investment adviser on a date that is irregular from year to year.
6. The written agreement described in paragraph (f) of subsection 2 must:
(a) Provide for the first examination to occur within 6 months after the effective date of this regulation, except that if an investment adviser maintains client funds or securities pursuant to this section as a qualified custodian, the agreement must provide for the first examination to occur not later than 6 months after obtaining the internal control report; and
(b) Require the independent certified public accountant to:
(1) File a certificate on Form ADV-E with the Administrator within 120 days after a date chosen by the independent certified public accountant. The certificate must:
(I) State that the independent certified public accountant has examined the funds and securities; and
(II) Describe the nature and extent of the examination;
(2) Notify the Administrator within 1 business day after the finding of any material discrepancy during the course of the examination, by means of a facsimile transmission or electronic mail, followed by first-class mail, directed to the attention of the Administrator; and
(3) File, within 4 business days after the resignation or dismissal from, or other termination of, the engagement, or removal of itself or being removed from consideration for being reappointed, a Form ADV-E accompanied by a statement that includes, without limitation:
(I) The date of the resignation, dismissal, termination or removal and the name, address and contact information of the independent certified public accountant; and
(II) An explanation of any problems relating to the scope of the examination or the procedure that contributed to the resignation, dismissal, termination or removal.
7. The internal control report described in paragraph (g) of subsection 2 must:
(a) Be prepared by an independent certified public accountant, who must:
(1) Verify that the funds and securities are reconciled to a custodian other than the investment adviser or a person related to the investment adviser; and
(2) As of the commencement of the professional engagement period and as of each calendar year-end, be registered with, and subject to regular inspection by, the Public Company Accounting Oversight Board in accordance with its rules; and
(b) Include, without limitation, an opinion of the independent certified public accountant described in paragraph (a) as to whether controls have been placed in operation as of a specific date, and are suitably designed and are operating effectively to meet control objectives relating to custodial services, including, without limitation, the safeguarding of funds and securities held by either the investment adviser or a related person on behalf of the client of the investment adviser, during the year.
8. The provisions of paragraph (d) of subsection 2 and subsection 10 are not satisfied if the account statement is sent solely to limited partners, members or other beneficial owners who are not natural persons or are otherwise entities in and of themselves and are related persons of the investment adviser.
9. The provisions of paragraph (b) of subsection 2 do not apply if:
(a) The securities:
(1) Were acquired from the issuer in a transaction or chain of transactions not involving any public offering;
(2) Are uncertificated and ownership thereof is recorded only on the books of the issuer or its transfer agent in the name of the client; and
(3) Are transferable only with prior consent of the issuer or holder of the outstanding securities of the issuer; and
(b) The following requirements are met as they apply to securities held for an account of a limited partnership, limited-liability company or other pooled investment vehicle:
(1) The entity is audited;
(2) The audited financial statements are distributed in the manner prescribed by subsection 10; and
(3) The investment adviser notifies the Administrator on a Uniform Application for Investment Adviser Registration (Form ADV) that the investment adviser intends to provide audited financial statements.
10. The provisions of paragraphs (c), (d) and (f) of subsection 2 do not apply to an investment adviser, with respect to the account of a limited partnership, limited-liability company or any other type of pooled investment vehicle, if:
(a) The investment adviser sends, at least quarterly, to all limited partners, members or other beneficial owners of the entity, as applicable, a statement showing:
(1) The total amount of all additions to and withdrawals from the fund as a whole and the opening and closing value of the fund at the end of the quarter based on the records of the custodian;
(2) A listing of all long and short positions on the closing date of the statement in accordance with Rule ASC 946-210-50 of the Financial Accounting Standards Board; and
(3) The total amount of additions to and withdrawals from the fund by the investment adviser and the total value of the interest of the investment adviser in the fund at the end of the quarter;
(b) At least annually the fund is subject to an audit and distributes, not later than 120 days after the end of its fiscal year, its audited financial statements, prepared in accordance with generally accepted accounting principles, to each limited partner, member or other beneficial owner of the entity and to the Administrator;
(c) As of the commencement of the professional engagement period and as of each calendar year-end, the audit is performed by an independent certified public accountant that is registered with, and subject to regular inspection by, the Public Company Accounting Oversight Board in accordance with its rules;
(d) Upon liquidation and promptly after the completion of the final audit, the investment adviser distributes the final financial statements of the fund, prepared in accordance with generally accepted accounting principles, to each limited partner, member or other beneficial owner of the entity and to the Administrator;
(e) The written agreement with the independent certified public accountant requires the independent certified public accountant to, upon resignation or dismissal from, or other termination of, the engagement, or upon removing itself or being removed from consideration for being reappointed, notify the Administrator within 4 business days after such resignation, dismissal, termination or removal, and the notification is accompanied by a statement that includes, without limitation:
(1) The date of the resignation, dismissal, termination or removal and the name, address and contact information of the independent certified public accountant; and
(2) An explanation of any problems relating to the scope of the audit or the procedure of the audit that contributed to the resignation, dismissal, termination or removal; and
(f) The investment adviser notifies the Administrator on a Uniform Application for Investment Adviser Registration (Form ADV) that the investment adviser intends to use the statement delivery and audit safeguards described in this subsection.
11. An investment adviser is not required to obtain an annual verification of client funds and securities maintained by a qualified custodian pursuant to paragraph (f) of subsection 2 if:
(a) The investment adviser has:
(1) Custody of the funds and securities solely as a consequence of the authority of the investment adviser to make withdrawals from client accounts to pay the advisory fee of the investment adviser; and
(2) Written authorization from the client to deduct advisory fees from the account held with the qualified custodian;
(b) Each time a fee is to be directly deducted from a client account, the investment adviser concurrently sends:
(1) The qualified custodian or the independent representative designated pursuant to subsection 3, as applicable, an invoice or statement of the amount of the fee to be deducted from the account of the client; and
(2) The client an invoice or statement itemizing the fee, the itemization of which must include the formula used to calculate the fee, the amount of assets under management the fee is based on and the time period covered by the fee; and
(c) The investment adviser notifies the Administrator on a Uniform Application for Investment Adviser Registration (Form ADV) that the investment adviser intends to use the safeguards provided in this subsection.
12. The provisions of this section do not apply to the account of an investment company registered under the Investment Company Act of 1940.
13. The provisions of this section do not apply to an investment advisory contract entered into by an investment adviser when the investment adviser was not licensed and was not required to be licensed pursuant to NRS 90.330 if the investment adviser was in compliance with all rules and regulations regarding performance-based compensation in each jurisdiction in which the investment adviser was registered or required to be registered at the time of entering into the advisory contract. For the purposes of this subsection, a transfer of an equity ownership interest in a private investment company by gift or bequest, or pursuant to an agreement related to a legal separation or divorce, will not cause the provisions of this section to apply to the transferee.
14. As used in this section:
(a) “Control” means the power, directly or indirectly, to direct the management or policies of a person, whether through ownership of securities, by contract or otherwise. Each of the following persons is presumed to have control:
(1) An officer, partner or director of the investment adviser, and any other person having similar status or function, who exercises executive responsibility;
(2) A person who, directly or indirectly, has the right to vote 25 percent or more of a class of the voting securities of a corporation;
(3) A person who has the power to sell or direct the sale of 25 percent or more of a class of the voting securities of a corporation;
(4) A person who has the right to receive upon dissolution, or has contributed, 25 percent or more of the capital of a partnership;
(5) A person who, directly or indirectly, has the right to vote 25 percent or more of a class of the interests of a limited-liability company;
(6) A person who has the right to receive upon dissolution of a limited-liability company, or has contributed, 25 percent or more of the capital of the limited-liability company;
(7) A person who is an elected manager of a limited-liability company; or
(8) A person who is a trustee or managing agent of a trust.
(b) “Custody” means holding, directly or indirectly, client funds or securities, having any authority to obtain possession of the funds or securities or having the ability to appropriate the funds or securities. The term:
(1) Includes, without limitation:
(I) An investment adviser if a related person holds, directly or indirectly, client funds or securities, or has any authority to obtain possession of the funds or securities, in connection with any advisory services the investment adviser provides to clients;
(II) Possession of client funds or securities, unless the investment adviser receives the funds or securities inadvertently and returns the funds or securities to the sender within 3 business days after receiving the funds or securities and the investment adviser maintains the records required by NAC 90.3867;
(III) Any arrangement, including, without limitation, a general power of attorney, under which the investment adviser is authorized or permitted to withdraw client funds or securities maintained with a custodian upon the instruction of the investment adviser to the custodian; and
(IV) Any capacity, including, without limitation, as a general partner of a limited partnership, managing member of a limited-liability company or a comparable position for another type of pooled investment vehicle, or a trustee of a trust, that gives the investment adviser or any supervised person legal ownership of or access to client funds or securities; and
(2) Does not include the receipt of checks drawn by clients and made payable to third parties if the checks are forwarded to the third party within 3 business days after receipt and the investment adviser maintains the records required by NAC 90.3867.
(c) “Independent certified public accountant” means a certified public accountant that meets the standards of independence described in 17 C.F.R. § 210.2-01(b) and (c).
(d) “Independent party” means a person that:
(1) Is engaged by the investment adviser to act as a gatekeeper for the payment of fees, expenses and capital withdrawals from a pooled investment;
(2) Does not control, is not controlled by and is not under common control with the investment adviser;
(3) Does not have, and has not had within the immediately preceding 2 years, a material business relationship with the investment adviser; and
(4) Is prohibited from negotiating or agreeing to have material business relations or commonly controlled relations with an investment adviser for a period of 2 years after serving as the person engaged in an independent party agreement.
(e) “Independent representative” means a person who:
(1) Acts as an agent for an advisory client, in the case of a pooled investment vehicle, for a limited partner or a limited partnership, for a member of a limited-liability company or for a beneficial owner of another type of pooled investment vehicle, and who is, by law or contract, obliged to act in the best interest of the advisory client, limited partner, member or other beneficial owner;
(2) Does not control, is not controlled by and is not under common control with the investment adviser; and
(3) Does not have, and has not had within the immediately preceding 2 years, a material business relationship with the investment adviser.
(f) “Open-end company” has the meaning ascribed to it in section 5(a)(1) of the Investment Company Act of 1940.
(g) “Qualified custodian” means the following:
(1) A bank or savings association that has deposits insured by the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act;
(2) A broker-dealer who:
(I) Is registered in this State and with the Securities and Exchange Commission; and
(II) Holds client assets in customer accounts;
(3) A registered futures commission merchant who:
(I) Is registered under section 4f(a) of the Commodity Exchange Act; and
(II) Holds client assets in customer accounts, but only with respect to the funds and security futures of the client, or other securities incidental to transactions in contracts for the purchase or sale of a commodity for future delivery and options thereon; and
(4) A foreign financial institution that customarily holds financial assets for its customers, if the foreign financial institution keeps the assets of the advisory client in customer accounts segregated from the proprietary assets of the foreign financial institution.
(h) “Related person” means any person, directly or indirectly, controlling or controlled by the investment adviser, and any person that is under common control with the investment adviser.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.3854 Minimum net worth requirements. (NRS 90.390, 90.750)
1. If an investment adviser is licensed or required to be licensed pursuant to NRS 90.330 and the investment adviser has custody of client funds or securities, the investment adviser must maintain a minimum net worth of $35,000 unless the investment adviser has custody of the funds and securities solely as a result of:
(a) A direct fee deduction; or
(b) Advising a pooled investment vehicle.
2. An investment adviser who is licensed or required to be licensed pursuant to NRS 90.330 and who has discretionary authority over client funds or securities but does not have custody of client funds or securities shall maintain a minimum net worth of $10,000.
3. An investment adviser who is licensed or required to be licensed pursuant to NRS 90.330 and who accepts prepayment of more than $500 per client 6 or more months in advance shall maintain a positive net worth.
4. If the net worth of an investment adviser falls below the minimum standards established by this section, the investment adviser must:
(a) Notify the Administrator not more than 1 business day after the occurrence of the event; and
(b) File a report with the Administrator, not more than 1 business day after the notification described in paragraph (a), which must include, without limitation:
(1) A trial balance of all ledger accounts;
(2) A statement of all client funds or securities which are not segregated;
(3) A computation of the aggregate amount of client ledger debit balances; and
(4) A statement of the number of client accounts.
5. The Administrator may require an investment adviser to submit a current appraisal in order to establish the worth of any asset.
6. Nothing in this section shall be construed to relieve an investment adviser from any requirement of the state of its principal place of business relating to minimum net worth.
7. As used in this section:
(a) “Custody” has the meaning ascribed to it in NAC 90.3852.
(b) “Discretion” does not include an investment adviser placing a trade order with a broker-dealer pursuant to a third-party trading agreement if:
(1) The investment adviser has executed a separate investment adviser contract exclusively with its client which acknowledges that a third-party trading agreement will be executed to allow the investment adviser to effect securities transactions for the client in the broker-dealer account of the client;
(2) The investment adviser contract specifically states that the client does not grant discretionary authority to the investment adviser and the investment adviser does not exercise any discretion with respect to the account of the client; and
(3) A third-party trading agreement is executed between the client and the broker-dealer which specifically limits the authority of the investment adviser in the broker-dealer account of the client to the placement of trade orders and the deduction of investment adviser fees.
(c) “Net worth” means an excess of assets over liabilities as determined by generally accepted accounting principles. As used in this paragraph, the term “assets” does not include:
(1) Prepaid expenses, unless the item is properly classified as an asset under generally accepted accounting principles;
(2) Deferred charges;
(3) Goodwill;
(4) Franchise rights;
(5) Organization expenses;
(6) Patents;
(7) Copyrights;
(8) Marketing rights;
(9) Unamortized debt discounts and expenses;
(10) Homes;
(11) Home furnishings;
(12) Automobiles;
(13) Advances or loans to a stockholder or officer in a corporation or a partner in a partnership;
(14) Any other assets of an intangible nature; and
(15) Any other personal items of an individual that are not readily marketable.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.3856 Performance-based compensation. (NRS 90.420, 90.750)
1. It is unethical or dishonest practice for an investment adviser to enter into, extend or renew an investment advisory contract if the contract provides for compensation to the investment adviser on the basis of a share of capital gains upon or capital appreciation of the funds or any portion of the funds of a client unless:
(a) The investment adviser is not licensed and is not required to be licensed pursuant to NRS 90.330; or
(b) The following conditions are met:
(1) The client entering into the contract is a qualified client, as defined by Rule 205-3 under the Investment Advisers Act of 1940; and
(2) To the extent not otherwise disclosed on Part 2 of the Uniform Application for Investment Adviser Registration (Form ADV), the investment adviser discloses to the client, in writing, all material information relating to the proposed advisory arrangement, including, without limitation:
(I) That the fee arrangement may create an incentive for the investment adviser to make investments that are riskier or more speculative than would be the case in the absence of a performance fee;
(II) That the investment adviser may receive increased compensation with regard to unrealized appreciation as well as realized gains in the account of the client, if applicable;
(III) The periods that will be used to measure investment performance throughout the contract and the significance of such periods in the computation of the fee;
(IV) The nature of any index that will be used as a comparative measure of investment performance, the significance of the index and the reason the investment adviser believes that the index is appropriate; and
(V) If the compensation of the investment adviser is based in part on the unrealized appreciation of securities for which market quotations are not readily available within the meaning of Rule 2a-4(a)(1) under the Investment Company Act of 1940, how the securities will be valued and the extent to which the valuation will be independently determined.
2. If an investment adviser enters into a contract and satisfies the conditions set forth in this section that are in effect when the contract is entered into, the investment adviser will be considered to satisfy the conditions set forth in this section, but if a natural person or company who is not a party to the contract subsequently becomes a party, including, without limitation, an equity owner of a private investment company advised by the investment adviser, the conditions set forth in this section that are in effect when the natural person or company becomes a party to the contract will apply with regard to the natural person or company. For the purposes of this subsection, a transfer of an equity ownership in a private investment company by gift or bequest, or pursuant to an agreement related to a legal separation or divorce, will not cause the transferee to become a party to the contract.
3. As used in this section:
(a) “Client” includes, without limitation:
(1) Each equity owner of a private investment company, unless the equity owner:
(I) Is the investment adviser who enters into the contract; or
(II) Is not charged a fee on the basis of a share of capital gains or capital appreciation;
(2) An investment company registered under the Investment Company Act of 1940; or
(3) A business development company, as defined in section 202(a)(22) of the Investment Advisers Act of 1940.
(b) “Company” has the meaning ascribed to it in section 202(a)(5) of the Investment Advisers Act of 1940. The term does not include a company that is required to be registered under the Investment Company Act of 1940 but is not registered.
(c) “Private investment company” means a company that would be defined as an investment company under section 3(a) of the Investment Company Act of 1940, but for the exception provided from that definition by section 3(c)(1) of the Act.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.3858 Business continuity and success planning and procedures. (NRS 90.390, 90.750)
1. An investment adviser shall establish, implement and maintain written procedures relating to a plan for business continuity and success.
2. The plan described in subsection 1 must:
(a) Be based upon the facts and circumstances of the business model of the investment adviser, including, without limitation:
(1) The size of the business;
(2) The types of services provided to clients; and
(3) The number of business locations of the investment adviser; and
(b) Provide information relating to:
(1) The protection, backup and recovery of books and records;
(2) Any alternate means of communications with customers, key personnel, employees, vendors and service providers, including, without limitation, third-party custodians and regulators, in the event of a significant business interruption, the death or unavailability of key personnel or any other disruption or cessation of any business activity;
(3) An office relocation, if the business incurs a temporary or permanent loss of a principal place of business;
(4) The assignment of duties to qualified responsible persons in the event of the death or unavailability of key personnel; and
(5) Any efforts taken to minimize service disruptions and harm to the client, if such disruptions or harm could result from a sudden significant business interruption.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.386 Information security and cybersecurity policies and procedures. (NRS 90.390, 90.750)
1. An investment adviser who is licensed or required to be licensed shall establish, implement, update and enforce written policies and procedures for physical security and cybersecurity which are reasonably designed to ensure the confidentiality, integrity and availability of physical and electronic records and information.
2. The policies and procedures described in subsection 1 must:
(a) Be tailored to the business model of the investment adviser, including, without limitation:
(1) The size of the firm;
(2) The type of services provided by the investment adviser; and
(3) The number of locations of the investment adviser;
(b) Protect against reasonably anticipated threats or hazards to the security or integrity of client records and information;
(c) Ensure that the investment adviser safeguards confidential client records and information;
(d) Protect records and information from any release which could result in harm or inconvenience to a client;
(e) Develop the organizational understanding to manage information security risks to systems, assets, data and capabilities;
(f) Develop and implement the appropriate safeguards to ensure the delivery of critical infrastructure services; and
(g) Develop and implement the appropriate activities to:
(1) Identify the occurrence of an information security event;
(2) Take action regarding a detected information security event; and
(3) Maintain plans for resilience and to restore any capabilities or services that were impaired due to an information security event.
3. The investment adviser shall:
(a) Review at least annually and modify as needed the policies and procedures described in subsection 1 to ensure the adequacy of the security measures and the effectiveness of their implementation;
(b) Keep records relating to any review of the policies and procedures described in paragraph (a), which must include, without limitation, a summary of any amendments made as a result of the review; and
(c) Maintain true, accurate and current:
(1) Copies of the policies and procedures described in subsection 1, which must be:
(I) Maintained in hard copy; or
(II) Stored on electronic storage media that is separate from and not dependent upon access to the computers or networks of the investment adviser;
(2) Records documenting the compliance of the investment adviser with this section, including, without limitation, evidence of the annual review of the policies and procedures described in subsection 1; and
(3) Records of any violation of this section and any action taken as a result of the violation.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.3862 Policies relating to collection of private personal information of clients. (NRS 90.390, 90.750)
1. An investment adviser who is licensed or required to be licensed shall establish, implement, update and enforce written policies that are reasonably designed to aid a client in understanding how the investment adviser collects private personal information.
2. The policies described in subsection 1 must be delivered by the investment adviser to the client upon the initial engagement of the client and annually thereafter. An updated version of the policies must be delivered to the client promptly at such time that the policies are amended or any other time that the information in the policies becomes inaccurate.
3. The investment adviser shall maintain true, accurate and current:
(a) Copies of the policies described in subsection 1, which must be:
(1) Maintained in hard copy; or
(2) Stored on electronic storage media that is separate from and not dependent upon access to the computers or networks of the investment adviser;
(b) Records documenting the compliance of the investment adviser with this section, including, without limitation, evidence of the annual review of the policies; and
(c) Records of any violation of this section and any action taken as a result of the violation.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.3865 Delivery of brochures, supplements and other required documents. (NRS 90.390, 90.750)
1. Except as otherwise provided in this section, an investment adviser who is licensed or required to be licensed pursuant to NRS 90.330 shall furnish each designated client and designated prospective client with:
(a) A brochure which may be a copy of Part 2A of the Uniform Application for Investment Adviser Registration (Form ADV) or written documents containing the information required by Part 2A of the Uniform Application for Investment Adviser Registration (Form ADV);
(b) A copy of its Part 2B brochure supplement for each person who:
(1) Provides investment advice and has direct contact with clients in this State; or
(2) Exercises discretion over assets of clients in this State, even if no direct contact is involved;
(c) A copy of its Part 2A, Appendix 1 wrap fee brochure if the investment adviser sponsors or participates in a wrap fee account;
(d) A summary of material changes to the documents described in paragraph (a), (b) or (c), which may be:
(1) Included in Part 2 of its Uniform Application for Investment Adviser Registration (Form ADV); or
(2) Given as a separate document; and
(e) Any other information required by the Administrator.
2. The brochure described in paragraph (a) of subsection 1 must comply with the language, organizational format and filing requirements specified in the instructions to Part 2 of the Uniform Application for Investment Adviser Registration (Form ADV).
3. An investment adviser shall deliver the brochure described in paragraph (a) of subsection 1 and any other documents required by this section to each designated prospective client:
(a) Not less than 48 hours before entering into an advisory contract with the designated prospective client; or
(b) At the time of entering into the contract, if the designated client has a right to terminate the contract without penalty within 5 business days after entering into the contract.
4. An investment adviser, within 120 days after the end of its fiscal year, shall deliver to a designated client:
(a) Any updates to the brochure described in paragraph (a) of subsection 1 and any other information required by subsection 1; or
(b) A summary of the material changes to the documents described in subsection 1, including, without limitation:
(1) Any offer to provide a copy of the updated brochure and supplements; and
(2) Information relating to how the client may obtain a copy of the brochure, supplements and any other information required by subsection 1.
5. An investment adviser may electronically deliver the brochure described in paragraph (a) of subsection 1 and any related supplements required by subsection 1 if the investment adviser:
(a) In the case of an initial delivery to a designated prospective client, obtains a verification that a readable copy of the brochure and supplements was received by the designated prospective client;
(b) In any case other than the initial delivery, obtains the prior consent of the designated client to provide the brochure, supplements and other information electronically;
(c) Prepares the brochure, supplements and other information in the format described in this section;
(d) Electronically delivers the brochure, supplements and other information in a format that can be retained by the client in either electronic or paper form; and
(e) Establishes procedures to:
(1) Supervise personnel transmitting the brochure, supplements and other information; and
(2) Prevent violations of this section.
6. Nothing in this section shall relieve an investment adviser from any other obligation described in any provision of chapter 90 of NRS or the rules and regulations thereunder or other federal or state law to disclose information to its designated clients or prospective designated clients.
7. As used in this section:
(a) “Advisory contract” means any contract relating solely to the provision of investment advisory services:
(1) By means of written material or oral statements which do not purport to meet the objectives or needs of specific individuals or accounts;
(2) Through the issuance of statistical information which does not contain any expression of opinion as to the investment merits of a particular security; or
(3) By any combination of the foregoing services.
(b) “Designated client” or “designated prospective client” means a client or prospective client who:
(1) Receives only impersonal advice and who pays less than $500 in fees per year;
(2) Is an investment company registered under the Investment Company Act of 1940; or
(3) Is a business development company, as defined in the Investment Company Act of 1940, and whose advisory contract meets the requirements of section 15(c) of the Act.
(c) “Entering into,” in reference to an advisory contract, does not include an extension or renewal without a material change of any such contract which is in effect immediately before such extension or renewal.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.3867 Recordkeeping: General requirements. (NRS 90.390, 90.750)
1. An investment adviser who is registered or required to be registered under the Investment Advisers Act of 1940 shall maintain the following, which are true, accurate and current:
(a) A journal which includes:
(1) Each cash receipt and disbursement record; and
(2) Any other record of original entry forming the basis of an entry in any ledger;
(b) A ledger or similar record, whether general or auxiliary, which reflects asset, liability, reserve, capital, income and expense accounts;
(c) A memorandum of each:
(1) Order given by the investment adviser for the purchase or sale of a security, including, without limitation, an order entered pursuant to the discretionary power of the investment adviser;
(2) Instruction received by the investment adviser from a client concerning the purchase, sale, receipt or delivery of a particular security; and
(3) Modification or cancellation of any order or instruction described in subparagraph (1) or (2);
(d) Any checkbook, bank statement, cancelled check or cash reconciliation of the investment adviser;
(e) Any bill or statement, or a copy thereof, whether paid or unpaid, which relates to the investment advising business of the investment adviser;
(f) Any trial balance, internal audit working paper relating to the business of the investment adviser and any of the following financial statements:
(1) A balance sheet prepared in accordance with generally accepted accounting principles;
(2) An income statement;
(3) A cash flow statement; or
(4) A net worth computation, as applicable;
(g) Except as otherwise provided in subsection 3, originals of all written communications received by the investment adviser and copies of all written communications sent by the investment adviser relating to:
(1) Each recommendation made or proposed to be made and advice given or proposed to be given;
(2) Each receipt, disbursement or delivery of funds or securities; and
(3) The placing or execution of each order to purchase or sell any security;
(h) A list or other record of each account of the investment adviser that identifies any account in which the investment adviser is vested with a discretionary power for a fund, security or transaction of a client;
(i) A copy of any power of attorney or like document which evidences the granting of discretionary authority to the investment adviser by a client;
(j) A physical copy of:
(1) Each agreement entered into by the investment adviser with a client; and
(2) Any other written agreement relating to the business of the investment adviser;
(k) A file containing a copy of each notice, circular, advertisement, newspaper article, investment letter, bulletin or other communication, including, without limitation, electronic media, that the investment adviser circulates or distributes, whether directly or indirectly, to two or more persons not connected with the business of the investment adviser. If the document recommends the purchase or sale of a specific security and does not state the reasons for the recommendation, the file must contain a memorandum indicating the reasons for the recommendation by the investment adviser;
(l) A copy of each written statement and an amendment or revision thereof, given or sent to a client or prospective client who subsequently became a client of the investment adviser, and a record of the dates that the statement, amendment or revision was given, or offered to be given, to the client or prospective client;
(m) For each client obtained by the investment adviser by means of a solicitor to whom a cash fee was paid by the investment adviser:
(1) Evidence of a written agreement where the adviser is a party and which is related to the payment of the fee;
(2) A signed and dated acknowledgment evidencing the receipt by the client of the investment disclosure statement and the written disclosure statement of the solicitor; and
(3) A copy of the written disclosure statement of the solicitor;
(n) A record of each account, book, internal working paper or any other document that is necessary to form the basis for, or demonstrate, the calculation of the performance or rate of return of each managed account or securities recommendation in any notice, circular, advertisement, newspaper article, investment letter, bulletin or other communication, including, without limitation, electronic media, that the investment adviser circulates or distributes, whether directly or indirectly, to two or more persons not related to the investment advising business of the investment adviser;
(o) A file containing a copy of each written communication received or sent by the investment adviser relating to:
(1) Litigation involving the investment adviser or a representative or employee of the investment adviser; and
(2) Any written complaint of a client or customer of the investment adviser;
(p) Any written information concerning a client that is the basis for making a recommendation or providing any investment advice to the client;
(q) Any written procedure reasonably designed to achieve compliance with a security law or regulation;
(r) A file containing a copy of each application, amendment, renewal filing or other correspondence, other than a notice of general dissemination relating to a registrant or an advisory representative of the investment adviser, as defined in NAC 90.3869, that was filed with or received from any state or federal agency or regulatory organization;
(s) A copy of the following documents which must include original signatures of the appropriate signatory of the investment adviser and the representative of the investment adviser:
(1) Each Uniform Application for Securities Industry Registration or Transfer (Form U-4); and
(2) Each amendment to Disclosure Reporting Pages (DRP U-4), which must be made available for inspection upon request;
(t) If the investment adviser inadvertently held or obtained a security or fund of a client and returned the security or fund to the client within 3 business days, or forwarded a third-party check within 24 hours, a ledger or other listing relating to the inadvertent custody, which must include, without limitation:
(1) The issuer;
(2) The type of security and series;
(3) The date of issue;
(4) For debt instruments, the denomination, interest rate and maturity date;
(5) The certificate number, including, without limitation, the alphabetical prefix or suffix;
(6) The name in which the security or fund is registered;
(7) The date the security or fund was obtained or given to the investment adviser;
(8) The date the security, fund or third-party check was sent to the client or sender;
(9) The form of delivery to the client or sender or a copy of the form of delivery; and
(10) The mail confirmation number, if applicable, or any confirmation by the client or sender of the return of the fund or security; and
(u) If an investment adviser obtains possession of securities that are acquired from an issuer in a transaction or chain of transactions not involving a public offering in compliance with the provisions of NAC 90.3852:
(1) A record showing the name, address and phone number of the issuer or current transfer agent, and other applicable contract information pertaining to the party responsible for recording client interests in the securities; and
(2) A copy of any legend, shareholder agreement or other agreement showing that the securities are transferable only with the prior consent of the issuer or holder of the outstanding securities of the issuer.
2. The memorandum described in paragraph (c) of subsection 1 must, as applicable:
(a) Show the terms and conditions of the order, instruction, modification or cancellation;
(b) Identify the person connected with the investment adviser who recommended the transaction to the client and the person who placed the order; and
(c) Show the account for which the order was entered, the date of entry and the broker-dealer or bank with or through whom the transaction was effected, where appropriate.
3. For the purposes of paragraph (g) of subsection 1:
(a) If a notice, circular or other advertisement was sent by an investment adviser who offered a report, analysis, publication or other investment advisory service to more than 10 persons, the investment adviser is not required to keep a record of the names and addresses of the persons to whom the notice, circular or other advertisement was sent, unless the notice, circular or advertisement was distributed to persons named on any list relating to a requirement for recordkeeping, in which case the investment adviser must retain with the copy of the notice, circular or advertisement a memorandum describing the list and its source.
(b) “Communication” does not include an unsolicited marketing letter or other similar communication of general public distribution not prepared by or for the investment adviser.
4. The documents described in paragraph (m) of subsection 1 must be in compliance with the Investment Advisers Act of 1940.
5. As used in this section:
(a) “Discretionary power” does not include discretion as to the price at which or the time when a transaction is or is to be effected, if, before an order is given by an investment adviser, the client directed or approved the purchase or sale of a definite amount of the particular security.
(b) “Performance of managed accounts” means the retention of each:
(1) Account statement, if the statement reflects all debits, credits and other transactions in the account of the client for the period of the statement; and
(2) Worksheet necessary to demonstrate the calculation of the performance or rate of return of each account.
(c) “Solicitor” means any person or entity who, for compensation, acts as an agent of an investment adviser in referring potential clients.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.3869 Recordkeeping: Securities transactions involving beneficial ownership of investment advisers and advisory representatives. (NRS 90.390, 90.750)
1. In addition to any other recordkeeping requirement, an investment adviser who is registered or required to be registered under the Investment Advisers Act of 1940 shall maintain a true, accurate and current record of every security transaction in which the investment adviser or any advisory representative of the investment adviser has, or by reason of any transaction acquires, any direct or indirect beneficial ownership, unless the transaction is:
(a) In an account over which neither the investment adviser nor the advisory representative of the investment adviser has any direct or indirect influence or control; or
(b) A direct obligation of the United States.
2. The record described in subsection 1:
(a) Must include:
(1) The title and amount of the security involved;
(2) The date and nature of the transaction, including, without limitation, the purchase, sale or other acquisition or disposition;
(3) The price at which the transaction was effected; and
(4) The name of the broker-dealer or bank with or through whom the transaction was effected; and
(b) May contain a statement declaring that the reporting or recording of the transaction described in this section must not be construed as an admission that the investment adviser or advisory representative of the investment adviser has any direct or indirect beneficial ownership in the security.
3. The transaction described in subsection 1 must be recorded not later than 10 days after the end of the calendar quarter in which the transaction was effected.
4. The failure of an investment adviser to record the transaction of an advisory representative of the investment adviser shall not be deemed to be a violation of this section if the investment adviser establishes that the investment adviser instituted adequate procedures and used reasonable diligence to promptly obtain reports of all transactions required to be recorded pursuant to this section.
5. As used in this section:
(a) “Advisory representative of an investment adviser” means:
(1) A partner, officer or director of an investment adviser;
(2) An employee of an investment adviser who:
(I) Participates in any way in the determination of which recommendations will be made; or
(II) In connection with the duties of the employee, obtains any information concerning which securities are being recommended before the effective dissemination of the recommendations; or
(3) Any of the following persons who obtain information concerning securities recommendations being made by the investment adviser before the effective dissemination of the recommendations:
(I) A person in a control relationship to the investment adviser;
(II) An affiliated person of a controlling person; or
(III) An affiliated person of an affiliated person.
(b) “Control” means the power to exercise a controlling influence over the management or policies of a company, unless such power is solely the result of an official position with the company. A person who owns beneficially, either directly or through one or more controlled companies, more than 25 percent of the voting securities of a company shall be presumed to control such company.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.3871 Recordkeeping: Securities transactions involving beneficial ownership when investment adviser is primarily engaged in business other than advising clients. (NRS 90.390, 90.750)
1. Notwithstanding the provisions of NAC 90.3869, and in addition to any other recordkeeping requirement, if an investment adviser is registered or required to be registered under the Investment Advisers Act of 1940 and the investment adviser is primarily engaged in a business other than advising investment advisory clients, a record must be maintained of every securities transaction in which the investment adviser or any advisory representative of the investment adviser has, or by reason of any transaction acquires, any direct or indirect beneficial ownership, unless the transaction is:
(a) Effected in any account over which neither the investment adviser nor any advisory representative of the investment adviser has any direct or indirect influence or control; or
(b) A direct obligation of the United States.
2. The record described in subsection 1:
(a) Must include:
(1) The title and amount of the security involved;
(2) The date and nature of the transaction, including, without limitation, the purchase, sale or other acquisition or disposition;
(3) The price at which the transaction was effected; and
(4) The name of the broker-dealer or bank with or through whom the transaction was effected; and
(b) May contain a statement declaring that the reporting or recording of a transaction described in this section must not be construed as an admission that the investment adviser or advisory representative has any direct or indirect beneficial ownership in the security.
3. The transaction described in subsection 1 must be recorded not later than 10 days after the end of the calendar quarter in which the transaction was effected.
4. The failure of an investment adviser to record the transaction of an advisory representative of the investment adviser shall not be deemed to be a violation of this section if the investment adviser establishes that the investment adviser instituted adequate procedures and used reasonable diligence to promptly obtain reports of all transactions required to be recorded pursuant to this section.
5. As used in this section:
(a) “Advisory representative” means:
(1) A partner, officer, director or employee of the investment adviser:
(I) Who participates in any way in the determination of which recommendation must be made; or
(II) Whose functions or duties relate to the determination of which securities are being recommended before the effective dissemination of the recommendations; or
(2) Any of the following persons, who obtain information concerning securities recommendations being made by the investment adviser before the effective dissemination of the recommendations or the information concerning the recommendations:
(I) A person in a control relationship to the investment adviser;
(II) An affiliated person of a controlling person; or
(III) An affiliated person of an affiliated person.
(b) “Control” means the power to exercise a controlling influence over the management or policies of a company, unless such power is solely the result of an official position with the company. Any person who owns beneficially, either directly or through one or more controlled companies, more than 25 percent of the voting securities of a company shall be presumed to control the company.
(c) “Primarily engaged in a business other than advising investment advisory clients” means when, for each of the most recent 3 fiscal years of the investment adviser or for the period of time since organization, whichever is less, the investment adviser derived, on an unconsolidated basis, more than 50 percent of:
(1) Its total sales and revenues; and
(2) Its income, or loss, before income taxes and extraordinary items,
Ê from such other business.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.3873 Recordkeeping: Additional requirements when investment adviser has custody of client funds or securities. (NRS 90.390, 90.750) In addition to any recordkeeping requirement, if an investment adviser is registered or required to be registered under the Investment Advisers Act of 1940 and the investment adviser has custody of client funds or securities, the investment adviser shall ensure that any record required to be maintained by the investment adviser includes, as applicable:
1. A copy of each document executed by the client, including, without limitation, a limited power of attorney, under which the investment adviser is authorized or permitted to withdraw funds or securities of the client which are maintained with a custodian upon the instruction of the investment adviser to the custodian.
2. A journal or other record showing all purchases, sales, receipts and deliveries of securities, including, without limitation, certificate numbers, for all accounts and all other debits and credits to the accounts.
3. A separate ledger account for each client showing:
(a) All purchases, sales, receipts and deliveries of securities;
(b) The date and price of each purchase and sale described in paragraph (a); and
(c) All debits and credits.
4. A copy of any confirmation of a transaction effected by or for the account of any client.
5. A record for each security in which any client has a position showing:
(a) The name of each client having any interest in each security;
(b) The amount or interest of each client; and
(c) The location of each security.
6. A copy of:
(a) Each quarterly account statement of the client, as generated and delivered by the qualified custodian;
(b) If the adviser generates a statement that is delivered to the client, the statement and the date that the statement was sent to the client; and
(c) A special examination report verifying the completion of the examination by an independent certified public accountant and describing the nature and extent of the examination, as applicable.
7. A record of any finding by the independent certified public accountant of any material discrepancies found during the examination.
8. Any evidence of the designation of an independent representative by a client, if applicable.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.3875 Recordkeeping: Additional requirements when custody of client funds or securities arises from advising a pooled investment vehicle. (NRS 90.390, 90.750) In addition to any recordkeeping requirement, if an investment adviser is registered or required to be registered under the Investment Advisers Act of 1940 and the investment adviser has custody of client funds or securities because the investment adviser advises a pooled investment vehicle, the investment adviser must keep:
1. A true, accurate and current record of each account statement;
2. Where the investment adviser is subject to the requirements set forth in paragraph (d) of subsection 2 of NAC 90.3852, records which include:
(a) The date of any audit;
(b) A copy of any audited financial statement; and
(c) Evidence of the mailing of the audited financial statement to each limited partner, member or other beneficial owner within 120 days after the end of the fiscal year of the investment adviser; and
3. Where the investment adviser is subject to the requirements set forth in paragraph (e) of subsection 2 of NAC 90.3852, records which include:
(a) A copy of the written agreement with the independent party reviewing all fees and expenses, indicating the responsibilities of the independent party; and
(b) A copy of each invoice and receipt showing approval by the independent party for payment through the qualified custodian.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.3877 Recordkeeping: Records required when providing investment supervisory or management services to client portfolios. (NRS 90.390, 90.750) In addition to any recordkeeping requirement, if an investment adviser is registered or required to be registered under the Investment Advisers Act of 1940 and the investment adviser renders an investment supervisory or management service to a client, the investment adviser shall, with respect to the portfolio being supervised or managed and to the extent that the information is reasonably available to or obtainable by the investment adviser, make and keep true, accurate and current:
1. Records for each client showing:
(a) The securities purchased and sold; and
(b) The date, amount and price of each purchase and sale.
2. For each security in which a client has a current position, information from which the investment adviser can promptly furnish:
(a) The name of the client; and
(b) The current amount or interest of the client.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.3879 Recordkeeping: Maintenance and preservation of required records. (NRS 90.390, 90.750)
1. A record required to be maintained by an investment adviser pursuant to NAC 90.386, 90.3862 and 90.3867 to 90.3877, inclusive:
(a) May be maintained by the investment adviser in such a manner that the identity of any client to whom the investment adviser renders investment supervisory services is indicated by numerical or alphabetical code or some similar designation.
(b) Must be maintained and preserved by the investment adviser:
(1) Except as otherwise provided in this section, in an easily accessible place for a period of not less than 5 years after the end of the fiscal year during which the last entry was made on record, the first 2 years of which must be in the principal office of the investment adviser.
(2) If the record is described in paragraph (k) or (n) of subsection 1 of NAC 90.3867, in an easily accessible place for a period of not less than 5 years after the end of the fiscal year during which the investment adviser last published or otherwise disseminated, directly or indirectly, the notice, circular, advertisement, newspaper article, investment letter, bulletin, or other communication, including by electronic media, the first 2 years of which must be in the principal office of the investment adviser.
(3) If the record is described in paragraphs (o) to (t), inclusive, of subsection 1 of NAC 90.3867, in an easily accessible place for a period of not less than 5 years after the end of the fiscal year during which the last entry was made on such record, the first 2 years of which must be in the principal office of the investment adviser, or for the time period during which the investment adviser was registered or required to be registered in this State, if less than 5 years.
(4) If the record is a partnership article, including any amendment thereof, article of incorporation, charter, minute book and stock certificate book of the investment adviser and of any predecessor, in the principal office of the investment adviser and preserved until at least 3 years after termination of the enterprise.
2. In addition to any other recordkeeping requirement, an investment adviser must maintain at any business location in this State from which a customer or client is being provided or has been provided with investment advisory services the following records for the period of time described in subsection 1:
(a) The records described paragraphs (c), (g) to (j), inclusive, (l), (m), (o), (p) and (q) of subsection 1 of NAC 90.3867 and 90.3877; and
(b) The records described in paragraphs (k) and (n) of subsection 1 of NAC 90.3867, which must identify the name of the representative of the investment adviser providing investment advice from that business location, or which identify the physical address, mailing address, electronic mailing address or telephone number of the business location.
3. As used in this section, “investment supervisory services” means the giving of continuous advice as to the investment of funds on the basis of the individual needs of each client.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.3881 Recordkeeping: Preservation of records upon cessation or discontinuance of business. (NRS 90.390, 90.750) An investment adviser who is subject to the recordkeeping requirements described in NAC 90.386, 90.3862 and 90.3867 to 90.3877, inclusive, shall, before ceasing to conduct or discontinuing business as an investment adviser:
1. Arrange and be responsible for the preservation of the records required to be maintained and preserved under those sections for the remainder of the period specified for the recordkeeping of the records; and
2. Notify the Administrator in writing of the exact address where the records will be maintained during that period.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.3883 Recordkeeping: Authorized media for record storage; organization and accessibility of records; separate storage of duplicate copies; safeguards for electronic records. (NRS 90.390, 90.750)
1. An investment adviser may immediately produce and reproduce, and shall maintain and preserve, a record described in NAC 90.386, 90.3862 and 90.3867 to 90.3877, inclusive, in:
(a) Paper or hard copy form, as those records are kept in their original form;
(b) Micrographic media, including, without limitation, microfilm, microfiche or any similar medium; or
(c) Electronic storage media, including any digital storage medium or system that meets the terms of this section.
2. An investment adviser described in subsection 1 shall:
(a) Arrange and index the records described in NAC 90.386, 90.3862 and 90.3867 to 90.3877, inclusive, in a way that permits easy location, access and retrieval of any particular record;
(b) Promptly provide any of the following that the Administrator or its examiner or other representatives may request:
(1) A legible, true and complete copy of any record described in NAC 90.386, 90.3862 and 90.3867 to 90.3877, inclusive, in the medium and format in which it is stored;
(2) A legible, true and complete printout of any record described in NAC 90.386, 90.3862 and 90.3867 to 90.3877, inclusive; and
(3) Means to access, view and print any record described in NAC 90.386, 90.3862 and 90.3867 to 90.3877, inclusive;
(c) Separately store, for the time required for preservation of the original record described in NAC 90.386, 90.3862 and 90.3867 to 90.3877, inclusive, a duplicate copy of the record on any medium authorized by this section; and
(d) In the case of a record described in NAC 90.386, 90.3862 and 90.3867 to 90.3877, inclusive, that is created or maintained on electronic storage media, establish and maintain procedures to:
(1) Maintain and preserve the records so as to reasonably safeguard the records from loss, alteration or destruction;
(2) Limit access to the records to properly authorized personnel and the Administrator, its examiners and other representatives; and
(3) Reasonably ensure that any reproduction of a non-electronic original record on electronic storage media is complete, true and legible when retrieved.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.3885 Recordkeeping: Compliance with federal law deemed to meet certain recordkeeping requirements. (NRS 90.390, 90.750) If a record is made, kept, maintained and preserved in compliance with Rule 17a-3 or 17a-4 of the Securities Exchange Act of 1934, and the record is substantially the same as a record required to be made, kept, maintained and preserved pursuant to NAC 90.386, 90.3862 and 90.3867 to 90.3877, inclusive, the record made, kept, maintained and preserved in compliance with the Securities Exchange Act of 1934 shall be deemed to meet the recordkeeping requirements set forth in NAC 90.386, 90.3862 and 90.3867 to 90.3877, inclusive.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.3887 Recordkeeping: Exemption for certain investment advisers licensed in another state. (NRS 90.390, 90.750) Every investment adviser registered or required to be registered in this State and that has its principal place of business in a state other than this State is exempt from the requirements of NAC 90.386, 90.3862 and 90.3867 to 90.3877, inclusive, if the investment adviser is licensed in such a state and is in compliance with the recordkeeping requirements of that state.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
Representatives of Investment Advisers
NAC 90.391 Applicant for initial license: Filing requirements; payment of fee. (NRS 90.350, 90.360, 90.750, 90.845, 90.847)
1. An applicant for an initial license as a representative of an investment adviser must file an application with the Administrator in the manner set forth in NAC 90.3293.
2. Except as otherwise provided in subsections 3 and 5, the application must include:
(a) The Uniform Application for Securities Industry Registration or Transfer (Form U-4); and
(b) Proof of successful completion by the applicant of:
(1) The Uniform Investment Adviser Law Examination (Series 65); or
(2) The Uniform Combined State Law Examination (Series 66) and the General Securities Representative Examination (Series 7).
3. The examination requirements set forth in subsection 2 do not apply to a person who includes in his or her application proof that he or she:
(a) Is certified as a Certified Financial Planner (CFP) by the Certified Financial Planner Board of Standards, Inc.;
(b) Is designated as a Chartered Financial Consultant (ChFC) by The American College located in Bryn Mawr, Pennsylvania;
(c) Is designated as a Personal Financial Specialist (PFS) by the American Institute of Certified Public Accountants;
(d) Is designated as a Chartered Financial Analyst (CFA) by the CFA Institute;
(e) Is designated as a Chartered Investment Counselor (CIC) by the Investment Adviser Association; or
(f) Holds such other professional designation as the Administrator may recognize by order.
4. An applicant for a license as a representative of an investment adviser must pay the fee required by NRS 90.360 to the Administrator in the manner set forth in NAC 90.3293.
5. In addition to the information required by subsection 2 and the fee required by subsection 4, a person licensed as a sales representative of a broker-dealer who is registered with the Financial Industry Regulatory Authority and is also a licensed investment adviser in this State or is the affiliate of such a licensed investment adviser must include his or her Central Registration Depository number in his or her application for an initial license as a representative of an investment adviser.
(Added to NAC by Sec’y of State, eff. 11-19-92; A 5-23-96; R016-02, 8-6-2002; R033-08, 6-17-2008)
NAC 90.3911 Expiration and renewal of license; required updating of certain information. (NRS 90.350, 90.360, 90.750, 90.845, 90.847)
1. The license of a representative of an investment adviser expires on December 31 of each year. A representative of an investment adviser must renew his or her license annually, on or before December 31, by paying the applicable fee required pursuant to NRS 90.360 to the Administrator in the manner set forth in NAC 90.3293.
2. A representative of an investment adviser and the investment adviser with whom the representative is employed or retained as an independent contractor shall update the information required by the Uniform Application for Securities Industry Registration or Transfer (Form U-4) filed with the Administrator pursuant to NAC 90.391 within 30 days after the change in that information occurs.
(Added to NAC by Sec’y of State by R016-02, eff. 8-6-2002)
NAC 90.3912 Licensing requirements inapplicable under certain circumstances. (NRS 90.340, 90.750) The licensing requirements of NRS 90.330 do not apply to a representative of an investment adviser who is a federal covered adviser if the representative does not have a place of business in this State.
(Added to NAC by Sec’y of State, eff. 10-30-97)
NAC 90.3913 Continuing education requirements. (NRS 90.750)
1. Every representative of an investment adviser licensed under NRS 90.330 must complete the following continuing education for each reporting period:
(a) Six credits of ethics and professional responsibility offered by an authorized provider, at least three credits of which must cover the topic of ethics; and
(b) Six credits of products and practice content offered by an authorized provider.
2. A representative of an investment adviser who is also registered as a sales representative of a broker-dealer member of the Financial Industry Regulatory Authority, or its successor, and who complies with the continuing education requirements of the Financial Industry Regulatory Authority, or its successor, is considered to be in compliance with paragraph (b) of subsection 1 so long as the continuing education content of the Financial Industry Regulatory Authority, or its successor, meets all the following baseline criteria as determined by the North American Securities Administrator Association:
(a) The continuing education content focuses on compliance, regulatory, ethical and sales practices standards;
(b) The continuing education content is derived from state and federal investment advisory statutes, rules and regulations, securities industry rules and regulations, and accepted standards and practices in the financial services industry; and
(c) The continuing education content requires that participants demonstrate proficiency in the subject matter of the educational materials.
3. A representative of an investment advisor who was awarded and currently holds a credential that qualifies for an examination waiver under subsection 3 of NAC 90.391 shall be deemed to be in compliance with subsection 1 if all the following are true:
(a) The representative of an investment adviser completes the credits of continuing education as a condition of maintaining the credential for the relevant reporting period;
(b) The credits of continuing education completed during the relevant reporting period by the representative of an investment adviser are mandatory to maintain the credential; and
(c) The continuing education content provided by the credentialing organization during the relevant reporting period is approved continuing education content.
4. Every representative of an investment adviser is responsible for ensuring that the authorized provider reports completion of the continuing education.
5. A representative of an investment adviser who completes credits of continuing education in excess of the amount required for the reporting period may not carry forward the excess credits to a subsequent reporting period.
6. A representative of an investment adviser who fails to comply with the requirements of this section by the end of a reporting period will renew as “CE Inactive” at the close of the calendar year in this State until the representative of the investment adviser completes and reports all required continuing education credits for all reporting periods as required by this section. A representative who is CE Inactive at the close of the next calendar year is not eligible for licensing or renewal as an investment adviser.
7. The Administrator may, in his or her discretion, waive any requirements of this section.
8. A representative of an investment adviser licensed or required to be licensed under chapter 90 of NRS who is registered as a representative of an investment adviser in his or her home state shall be deemed to be in compliance with this section if:
(a) The representative of an investment adviser’s home state has continuing education requirements that are at least as stringent as the requirements of this section; and
(b) The representative of an investment adviser is in compliance with the home state’s investment adviser representative continuing education requirements.
9. A representative of an investment adviser who was previously licensed under chapter 90 of NRS and became unlicensed must complete continuing education for all reporting periods that occurred between the time that the representative became unlicensed and when the representative became licensed again under chapter 90 of NRS unless the representative takes and passes the examination or receives an examination waiver as required by NRS 90.370 in connection with the subsequent application for licensing.
10. As used in this section:
(a) “Approved continuing education content” means the materials, whether written, oral or otherwise, that have been approved by the North American Securities Administrators Association, or its designee, and which make up the educational program provided to a representative of an investment adviser.
(b) “Authorized provider” means a person who is authorized by the North American Securities Administrators Association, or its designee, to provide continuing education content.
(c) “Credit” means a unit that has been designated by the North American Securities Administrators Association, or its designee, as at least 50 minutes of educational instruction.
(d) “Home state” means the state in which the representative of an investment adviser has its principal office and place of business.
(e) “North American Securities Administrators Association” includes a committee designated by the Board of Directors of the North American Securities Administrators Association.
(f) “Products and practice content” means approved continuing education content that addresses the continuing skills and knowledge of a representative of an investment adviser relating to financial products, investment features and practices in the investment advisory industry.
(g) “Ethics and professional responsibility” means approved continuing education content that addresses ethical and regulatory obligations of representatives of investment advisers.
(h) “Reporting period” means a 12-month period as determined by the North American Securities Administrators Association. The initial reporting period of an investment adviser with this State commences the first day of the first full reporting period after the individual is licensed or required to be licensed in this State.
(i) “Representative of an investment adviser” means an individual who meets the definition of:
(1) “Representative of an investment adviser” pursuant to NRS 90.278; and
(2) “Investment adviser representative” pursuant to 17 C.F.R. § 275.203A-3.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.3915 Cessation of employment or contractual relationship with investment adviser. (NRS 90.350, 90.360, 90.750, 90.847)
1. The license of a representative of an investment adviser terminates upon the withdrawal, cancellation or termination of his or her employment or contractual relationship with an investment adviser. The investment adviser shall file the Uniform Termination Notice for Securities Industry Registration (Form U-5) with the Administrator, in the manner set forth in NAC 90.3293, upon the withdrawal, cancellation or termination of his or her employment of or contractual relationship with a representative of an investment adviser.
2. A representative of an investment adviser whose employment or contractual relationship with an investment adviser ceases and who intends to transact business in this State as a representative of an investment adviser with another investment adviser must file a new application for a license, together with the required fee.
(Added to NAC by Sec’y of State, eff. 11-19-92; A 5-23-96; R016-02, 8-6-2002)
Branch Offices
NAC 90.392 Licensing requirements; changes in certain information; expiration and renewal of license. (NRS 90.360, 90.750)
1. A broker-dealer who maintains a branch office must obtain a license from the Division before doing business at that office.
2. A broker-dealer who desires to obtain the license required by this section must:
(a) File a Uniform Branch Office Registration Form (Form BR) with the Central Registration Depository;
(b) Be licensed in this State as a broker-dealer and, if qualification is required by NRS 80.010, be qualified to do business in this State; and
(c) Pay the appropriate fee set forth in NRS 90.360.
3. If any change occurs in the information set forth in the Uniform Branch Office Registration Form (Form BR), the applicant shall, within 30 days after the change:
(a) File an updated Uniform Branch Office Registration Form (Form BR) with the Central Registration Depository; and
(b) Pay the appropriate fee set forth in NRS 90.360.
4. A license obtained pursuant to this section expires on December 31 of each year. The license must be renewed annually on or before December 31 by paying the appropriate fee set forth in NRS 90.360.
(Added to NAC by Sec’y of State, 10-16-89, eff. 1-1-90; A by R016-02, 8-6-2002; R047-04, 5-25-2004; R018-21, 6-2-2023)
NAC 90.3925 Designation as office of supervisory jurisdiction; designation of supervisor. (NRS 90.360, 90.750)
1. A person who files a Uniform Branch Office Registration Form (Form BR) pursuant to NAC 90.392 must designate the branch office as an office of supervisory jurisdiction if required to do so by the requirements of the Financial Industry Regulatory Authority, regardless of whether he or she is a member of that Authority.
2. Every registered broker-dealer must employ at its principal office and at each branch office in this State at least one person designated to act in a supervisory capacity and licensed with the Division as a principal.
3. If a branch office is not designated as an office of supervisory jurisdiction, a supervisor need not be located at any office for which he or she is given supervisory responsibility.
(Added to NAC by Sec’y of State, eff. 10-16-89; A by R033-08, 6-17-2008; R018-21, 6-2-2023)
NAC 90.393 Licensing of person in charge; roster of affiliated sales representatives. (NRS 90.360, 90.750)
1. The individual in charge of a branch office must be licensed in this State as a sales representative or broker-dealer.
2. A broker-dealer who maintains a branch office shall keep a current roster of the sales representatives affiliated with that office.
(Added to NAC by Sec’y of State, eff. 10-16-89)
NAC 90.3935 Restrictions on name and location of operation. (NRS 90.360, 90.750) A branch office must not be operated:
1. Under any name other than:
(a) The name of the broker-dealer; or
(b) A fictitious name registered by the broker-dealer as required by chapter 602 of NRS.
2. Within the physical confines of another business unless:
(a) There are conspicuous signs or physical separation of the businesses that clearly indicate to the public that the businesses are separate and distinct from one another; and
(b) Any person referring customers to or soliciting business for the branch office for compensation complies with the licensing requirements set forth in this chapter and chapter 90 of NRS.
(Added to NAC by Sec’y of State, eff. 10-16-89; A 11-19-92)
NAC 90.394 Grounds for denial, suspension or revocation of license. (NRS 90.360, 90.750) The Administrator may deny, suspend or revoke any license issued for the operation of a branch office on any ground applicable to the denial, suspension or revocation of the license of a broker-dealer.
(Added to NAC by Sec’y of State, eff. 10-16-89)
NAC 90.3945 Notification of Division before closing office or terminating business. (NRS 90.360, 90.750) A broker-dealer shall notify the Division before closing a branch office or terminating business at that location. Notice must be given by the filing of a Uniform Branch Office Registration Form (Form BR) with the Central Registration Depository.
(Added to NAC by Sec’y of State, eff. 10-16-89; A by R018-21, 6-2-2023)
REGISTRATION OF SECURITIES
General Provisions
NAC 90.395 Definitions. (NRS 90.750) As used in NAC 90.395 to 90.538, inclusive, unless the context otherwise requires:
1. “Commission” means any consideration paid for services rendered, whether received by or accruing to the benefit of a person in connection with the distribution of securities or otherwise. The term includes cash, selling discounts, fees, securities, contracts and any other thing of value.
2. “Dilution” means the difference between:
(a) The net tangible asset value of the issuer allocable to the equity securities being offered, calculated by dividing the net tangible asset value of the issuer by the number of equity securities outstanding, including the securities being offered; and
(b) The aggregate offering price for the securities being offered.
3. “Underwriter” means a person who purchases any security from the issuer with a view to, or offers or sells any security for an issuer in connection with, the distribution of the security, or participates in the direct or indirect underwriting of any such undertaking, but does not include a person whose interest in an undertaking is limited to that of a distributor or seller, and who receives a commission, if a commission is paid, not in excess of the usual and customary commission received by a distributor or seller.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; 11-19-92)
NAC 90.398 Electronic filing; electronic payment of fees. (NRS 90.750, 90.845, 90.847)
1. Any document which must be filed pursuant to NRS 90.470 to 90.500, inclusive, or 90.520 may be filed with the Securities Registration Depository or any other system for the electronic registration of securities which is approved by the Administrator by order.
2. If a document is filed pursuant to subsection 1, any fee required by NRS 90.500 or 90.520 may be paid by the electronic transfer of money to the system for the electronic registration of securities with which the document was filed.
3. As used in this section, “Securities Registration Depository” means the system for the electronic registration of securities that is owned and operated by SRD, Inc., or its successor.
(Added to NAC by Sec’y of State, eff. 5-23-96; A by R016-02, 8-6-2002)—(Substituted in revision for NAC 90.422)
NAC 90.3982 Electronic delivery of offering documents. (NRS 90.390, 90.750)
1. An issuer of securities or an agent acting on behalf of the issuer may deliver an offering document over the Internet or by other electronic means or in machine-readable format if:
(a) The offering document:
(1) Is prepared, updated and delivered in a manner consistent and in compliance with state and federal securities laws;
(2) Includes the following statement, “Clarity of text in this document may be affected by the size of the screen on which it is displayed”;
(3) Satisfies any formatting requirements applicable to printed documents, including, without limitation, a requirement relating to font size and typeface;
(4) Is identical in content to a printed version, except for any content relating to:
(I) Electronic-specific instructions or procedures; and
(II) Daily net asset value;
(5) Is delivered as a single, integrated document or file, or as a single package or list when multiple offering documents are delivered;
(6) Provides notices to investors or prospective investors that any document or content that is external to the offering document and is accessed through any hyperlink to the document or content is provided by an external source; and
(7) Is delivered in an electronic format that intrinsically enables the recipient to store, retrieve and print the offering document; and
(b) The issuer or the agent acting on behalf of the issuer:
(1) Obtains informed consent from the investor or prospective investor to electronically receive the offering document;
(2) Ensures that the investor or prospective investor receives timely, adequate and direct notice when an offering document has been delivered electronically;
(3) Employs safeguards to ensure that delivery of the offering document occurred at or before the time required by law in relation to the time of sale; and
(4) Maintains evidence of delivery by keeping records of its electronic delivery of the offering document and makes such records available on demand by the Administrator.
2. Informed consent to receive offering documents electronically may be obtained in connection with each new offering or globally, either by the issuer or by an agent acting on behalf of the issuer. The investor may revoke the consent at any time by informing the party to whom the consent was given or, if such party is no longer available, the issuer.
3. Investment opportunities shall not be conditioned on participation in any electronic initiative.
4. As used in this section, “delivery” means that the offering document was conveyed to and received by the investor or prospective investor, or that the storage media in which the offering document was stored is physically delivered to the investor or prospective investor.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.3984 Electronic subscription agreements. (NRS 90.390, 90.750) In addition to any requirement prescribed by NAC 90.3982, a subscription agreement may be provided by an issuer or an agent acting on behalf of the issuer electronically for review and completion if the subscription process is administered in a manner that is similar to the administration of subscription agreements in paper form and:
1. Before completion of the subscription agreement, the issuer or agent acting on behalf of the issuer reviews with the prospective investor all appropriate documentation related to the prospective investment, including, without limitation, any document or instruction on how to complete the subscription agreement;
2. Mechanisms are established to ensure a prospective investor reviews all required disclosures and scrolls through the document in its entirety before initialing or signing; and
3. Unless otherwise allowed by the Administrator, a single subscription agreement is used to subscribe a prospective investor in not more than one offering.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.3986 Electronic initiatives for offering documents and subscription agreements: Policies; procedures; record storage. (NRS 90.390, 90.750)
1. An investor or prospective investor who declines to participate in an electronic initiative for offering documents and subscription agreements pursuant to NAC 90.3982 and 90.3984, respectively, is not subject to any higher costs for declining to participate in the initiative, except those relating to the actual direct cost of printing, mailing, processing and storing offering documents and subscription agreements. A discount must not be given for participating in the electronic initiative.
2. An entity participating in an electronic initiative described in subsection 1 shall maintain, and shall require participating underwriters, dealer-managers, placement agents, broker-dealers or other selling agents to maintain, written policies and procedures covering the use of electronic offering documents and subscription agreements in accordance with this section and NAC 90.3982 and 90.3984, respectively.
3. An entity and its contractors and agents having custody and possession of any electronic offering documents, including, without limitation, electronic subscription agreements, shall store such documents in a non-rewritable and non-erasable format.
4. This section does not change or waive any other requirement of law concerning the registration or presale disclosure of a securities offering.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.3988 Use of electronic signature. (NRS 90.750)
1. An issuer of securities or an agent acting on behalf of the issuer may provide for the use of electronic signatures if the process by which electronic signatures are obtained:
(a) Is implemented in compliance with chapter 719 of NRS and the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001 et seq.;
(b) Includes, without limitation:
(1) An appropriate level of security and assurances of accuracy; and
(2) Any required federal disclosures;
(c) Employs:
(1) An authentication process to establish signer credentials; and
(2) Security features that protect signed records from alteration; and
(d) Provides for the retention of electronically signed documents in compliance with applicable laws and regulations, by either the issuer or agent acting on behalf of the issuer.
2. An initiative for electronic signatures must be expressly opt-in and if an investor or prospective investor opts-in to such an initiative, participation may be terminated at any time.
3. An investment opportunity may not be conditioned on participation in an initiative for electronic signatures.
4. An entity that participates in an initiative for electronic signatures shall maintain, and shall require underwriters, dealer-managers, placement agencies, broker-dealers and other selling agents to maintain, written policies and procedures covering the use of electronic signatures.
5. An election to participate in an initiative for electronic signatures may be obtained in connection with each new offering, or by an agent acting on behalf of the issuer. The investor may revoke such consent at any time by informing the party to whom the consent was given or, if such a party is no longer available, the issuer.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.399 Security breaches relating to electronic offering documents or electronic signatures. (NRS 90.390, 90.750)
1. In the event of discovery of a security breach, the issuer or its agent, as appropriate, will take prompt action to:
(a) Identify and locate the breach;
(b) Secure the affected information;
(c) Suspend the use of the particular device or technology that has been compromised until the security breach has been terminated; and
(d) Provide notice of the security breach to:
(1) The investor whose confidential personal information has been improperly accessed in connection with the security breach; and
(2) The Administrator of each state in which an affected investor resides.
2. The compliance of an issuer or its agent with this section after the discovery of a security breach, or any other breach of personal information, does not substitute, or in any way affect, any other requirement or obligation imposed on the issuer or its agent, including, without limitation, any notification requirement.
3. As used in this section, “security breach” means the unauthorized accessing, acquisition or disclosure of any data that compromises the security or confidentiality of personal information maintained by the person or business. The term is limited to systems, technologies or processes that are used in connection with or introduced into a securities offering in order to implement the use of an electronic offering document or an electronic signature.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.400 Filing of Year-End Securities Sales Report. (NRS 90.500, 90.750) If an open-end management company, face amount certificate company or unit investment trust is required to file a report pursuant to paragraph (b) of subsection 3 of NRS 90.500, it shall satisfy that requirement by filing with the Administrator a Year-End Securities Sales Report (Nevada Form 500-3).
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)
NAC 90.402 Prospectus: Index. (NRS 90.750) Any prospectus, amendment or supplement to a prospectus required by chapter 90 of NRS must have an index clearly identifying each topical heading in the order that it appears in the prospectus.
(Added to NAC by Sec’y of State, eff. 10-16-89)
NAC 90.403 Prospectus: Use and availability of Small Company Offering Registration Form. (NRS 90.750)
1. The Small Company Offering Registration Form (Form U-7), as adopted by the North American Securities Administrators Association, may be used as a prospectus for the purposes of any requirement for a prospectus contained in this chapter or chapter 90 of NRS if the minimum offering price per share is equal to or more than $1 per share. An offering submitted in connection with Rule 504 of Regulation D of the Securities and Exchange Commission must be submitted on Form U-7.
2. Each Form U-7 so submitted must be completed in conformance with the uniform instructions accompanying the form.
3. An issuer who uses Form U-7 in connection with an offering pursuant to Rule 504 of Regulation D of the Securities and Exchange Commission may elect in writing to participate in the Western Regional Review, as administered by the North American Securities Administrators Association.
4. Form U-7 may be obtained from the North American Securities Administrators Association or the Office of the Administrator in the manner described in NAC 90.315.
(Added to NAC by Sec’y of State, eff. 10-16-89; A 11-19-92; 10-30-97; R016-02, 8-6-2002)
NAC 90.405 Application of statements of policy to offerings; offerings made with unreasonable amounts of underwriters’ and sellers’ compensation; aggregate amount of compensation. (NRS 90.510, 90.750)
1. For the purposes of NRS 90.510:
(a) Except as otherwise provided in paragraph (b), statements of policy adopted by the North American Securities Administrators Association may be used by the Administrator to determine whether an offering:
(1) Is complete with respect to the disclosure provided;
(2) Works or will tend to work a fraud upon purchasers; or
(3) Is or will be made with unreasonable amounts of promoters’ profits or participation, or unreasonable amounts or kinds of options.
(b) An offering is made with unreasonable amounts of underwriters’ and sellers’ discounts, commissions or other compensation if the aggregate amount of that compensation, calculated as provided in subsection 2:
(1) Is greater than 15 percent; or
(2) When added to the total amount of expenses incurred or to be incurred in connection with the offering, is greater than 20 percent,
Ê of the aggregate offering price.
2. Except as otherwise provided in this subsection, the aggregate amount of compensation includes the fair market value of any options or warrants given in connection with the offering to underwriters and sellers. If there is no evidence sufficient to establish a fair market value or other value, the value of these options and warrants shall be deemed to be not less than 20 percent of the public offering price of the stock to which they relate.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)
NAC 90.408 Registration statements: Use of financial statements and financial information prepared in accordance with generally accepted accounting principles of Canada. (NRS 90.500, 90.750)
1. Financial statements and financial information which have been prepared in accordance with generally accepted accounting principles of Canada, consistently applied, may be included in a registration statement which is filed with the Administrator pursuant to NRS 90.470 or 90.480 if the registration statement has been designated as Form F-7, F-8, F-9 or F-10 by the Securities and Exchange Commission and:
(a) The securities which are the subject of a registration statement designated as Form F-7 by the Securities and Exchange Commission are offered for cash upon the exercise of rights granted to existing security holders.
(b) The securities which are the subject of a registration statement designated as Form F-8 by the Securities and Exchange Commission are securities to be issued in an exchange offer, merger or other business combination.
(c) The securities which are the subject of the registration statement designated as Form F-9 by the Securities and Exchange Commission are either nonconvertible preferred stock or nonconvertible debt which will be rated in one of the four highest rating categories by one or more nationally recognized statistical rating organizations.
(d) The securities which are the subject of a registration statement designated as Form F-10 by the Securities and Exchange Commission are offered and sold pursuant to a prospectus in which the Securities and Exchange Commission has not required a reconciliation to generally accepted accounting principles of the United States with respect to the financial information presented therein.
2. For the purposes of this section, preferred stock and debt securities which are not convertible for at least 1 year after the date of effectiveness of the registration statement shall be deemed to meet the requirement of paragraph (c) of subsection 1.
(Added to NAC by Sec’y of State, eff. 11-19-92)
NAC 90.410 Registration statements deemed abandoned: Circumstances and effect. (NRS 90.500, 90.750) A registration statement shall be deemed abandoned if the registration statement does not become effective within 1 year after the date on which the registration statement is filed with the Administrator. A registration statement that has been deemed abandoned pursuant to this section must not be reinstated. An applicant who wishes to register securities under a registration statement that has been deemed abandoned pursuant to this section must file a new registration statement that includes the filing fee required by NRS 90.500 and the documents required to be filed pursuant to:
1. NRS 90.470 and NAC 90.420;
2. NRS 90.480 and NAC 90.440; or
3. NRS 90.490 and NAC 90.460,
Ê as applicable.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; R016-02, 8-6-2002)
NAC 90.412 Withdrawal of registration statement. (NRS 90.750) Any withdrawal of a registration statement must be submitted on a Notice of Withdrawal of Registration (Nevada Form 500-12). No refund of filing fees will be made if a registration statement is withdrawn.
(Added to NAC by Sec’y of State, eff. 10-16-89)
NAC 90.413 Application to extend effectiveness of registration statement. (NRS 90.500, 90.750)
1. Except as otherwise provided in this section, any application to extend the effectiveness of a registration statement previously approved by the Administrator will be processed as a new application for registration and must be accompanied by the filing fee and documentation required by NRS 90.470 to 90.500, inclusive, and NAC 90.420, 90.440 and 90.460.
2. If the application is made before the expiration of effectiveness of the registration statement on file with the Division and no material change has occurred in the prospectus or other documentation on file, the issuer need only submit:
(a) The filing fee required by NRS 90.500;
(b) A Uniform Application to Register Securities (Form U-1);
(c) An audited financial statement of the issuer for the last fiscal year; and
(d) An affidavit, signed by an executive officer of the issuer or underwriter, stating that no changes have occurred in the other documentation on file with the Administrator. The affidavit must contain a clear reference to the file number of the Division and specific documents represented to be current and accurate from the previous filing.
3. An application to extend the effectiveness of a previous registration statement must be submitted not more than 60 days before the date of expiration of the previous statement.
4. Upon approval, the application is effective for 1 year after the date of expiration of the previous statement or the date of approval of the subsequent application, whichever is later.
(Added to NAC by Sec’y of State, eff. 10-16-89; A 11-19-92; R018-21, 6-2-2023)
NAC 90.415 Waiver of provisions. (NRS 90.715, 90.750) The Administrator may waive the application of any provision of NAC 90.395 to 90.538, inclusive, if a written request for the waiver is filed with the Administrator in accordance with NRS 90.715 and NAC 90.318 by the registrant affected and the Administrator determines that waiver is appropriate under the circumstances and is in the public interest.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; 11-19-92; R047-04, 5-25-2004)
Registration by Filing
NAC 90.420 Documents required to accompany filing. (NRS 90.470, 90.750) A registration statement filed pursuant to NRS 90.470 must be accompanied by:
1. The Uniform Application to Register Securities (Form U-1);
2. The Uniform Consent to Service of Process (Form U-2);
3. The Uniform Corporate Resolution (Form U-2A);
4. A copy of the final offering prospectus or, pending preparation of the final prospectus, a copy of the preliminary prospectus; and
5. Any other document or information requested by the Administrator in writing before the effective date of the offering.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; R016-02, 8-6-2002)
NAC 90.425 Accelerated effectiveness. (NRS 90.470, 90.750) The effectiveness of a registration statement filed pursuant to NRS 90.470 may be accelerated by the Administrator upon the filing of a written request for acceleration. The request must be filed by the registrant and must set forth, in clear and concise terms, the basis for the request.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)
NAC 90.430 Posteffective amendment. (NRS 90.470, 90.750) A posteffective amendment of a registration statement filed pursuant to NRS 90.470 must be filed with the Administrator not later than 5 business days after the date it is filed with the Securities and Exchange Commission.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)
NAC 90.435 Timely filing of reports. (NRS 90.470, 90.750) For the purposes of paragraph (e) of subsection 1 of NRS 90.470, all reports required to be filed during the 12 calendar months next preceding the filing of the federal registration statement shall be deemed to have been timely filed if they have:
1. Been filed within the time, including any permitted extensions of time, allowed by the Securities and Exchange Commission pursuant to its regulations; or
2. Been on file with the Securities and Exchange Commission for not less than 60 days.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)
Registration by Coordination
NAC 90.440 Documents required to accompany filing. (NRS 90.480, 90.750) A registration statement filed pursuant to NRS 90.480 must be accompanied by:
1. The Uniform Application to Register Securities (Form U-1);
2. The Uniform Consent to Service of Process (Form U-2);
3. The Uniform Corporate Resolution (Form U-2A);
4. A copy of the final offering prospectus or, pending preparation of the final prospectus, a copy of the preliminary prospectus; and
5. Any other document or information requested by the Administrator in writing before the effective date of the offering.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; R016-02, 8-6-2002)
NAC 90.445 Accelerated effectiveness. (NRS 90.480, 90.750) The effectiveness of a registration statement filed pursuant to NRS 90.480 may be accelerated by the Administrator upon the filing of a written request for acceleration. The request must be filed by the registrant and must set forth, in clear and concise terms, the basis for the request.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)
NAC 90.450 Posteffective amendment. (NRS 90.480, 90.750) A posteffective amendment of a registration statement filed pursuant to NRS 90.480 must be filed with the Administrator not later than 5 business days after the date it is filed with the Securities and Exchange Commission.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)
NAC 90.453 Effective date of registration statement filed with Securities and Exchange Commission. (NRS 90.480, 90.750) Notwithstanding the provisions of paragraph (b) of subsection 3 of NRS 90.480, if a registration statement is filed on Form F-7, F-8, F-9 or F-10 with the Securities and Exchange Commission, it may become effective, subject to any other applicable requirements, after it has been on file with the Administrator for at least 7 days. If the registration statement is not filed with the Administrator within 5 days after the initial filing under the Securities Act of 1933, the registration statement must have been on file with the Administrator for 30 days or any shorter period authorized by the Administrator.
(Added to NAC by Sec’y of State, eff. 11-19-92)
NAC 90.455 Written notice of date federal registration statement became effective. (NRS 90.480, 90.750) The notice to the Administrator required by subsection 4 of NRS 90.480 must be given by the registrant in writing. The Administrator will promptly acknowledge receipt of the notice.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)
Registration by Qualification
NAC 90.460 Documents required to accompany filing. (NRS 90.490, 90.750) A registration statement filed pursuant to NRS 90.490 must be accompanied by:
1. The Uniform Application to Register Securities (Form U-1), including the exhibits required by that application;
2. The Uniform Consent to Service of Process (Form U-2);
3. The Uniform Corporate Resolution (Form U-2A);
4. A copy of the final offering prospectus or, pending preparation of the final prospectus, a copy of the preliminary prospectus;
5. A copy of the articles of incorporation and bylaws or their substantial equivalents, as applicable, which are currently in effect;
6. A copy of any agreement with or among the underwriters;
7. A copy of any indenture or other instrument governing the issuance of the security to be registered;
8. A copy, specimen or description of the security;
9. A signed or conformed copy of an opinion of counsel as to the legality of the security being registered, with an English translation if it is in a foreign language, which states whether the security when sold will be legally issued, fully paid and nonassessable and, if a debt security, a binding obligation of the issuer; and
10. Any other document or information requested by the Administrator in writing before the effective date of the offering.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; 11-19-92; R016-02, 8-6-2002)
NAC 90.465 Amendment to prospectus, pamphlet or similar document. (NRS 90.490, 90.750) Within 30 days after the effective date of a registration statement filed pursuant to NRS 90.490, the registrant shall file with the Administrator a copy of any amendment to any prospectus, pamphlet or other document filed pursuant to paragraph (m) of subsection 2 of NRS 90.490.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)
NAC 90.470 Preparation and auditing of financial statements. (NRS 90.490, 90.750)
1. Except as otherwise provided in subsection 2 of this section or in the Uniform Limited Offering Circular (Form U-7) adopted by the North American Securities Administrators Association, a financial statement filed pursuant to paragraph (q) of subsection 2 of NRS 90.490 must be:
(a) Prepared in accordance with generally accepted accounting principles;
(b) Audited in accordance with generally accepted auditing standards; and
(c) Except as otherwise approved by the Administrator under the circumstances of the case, contain the unqualified opinion of an independent certified public accountant.
2. If an issuer has an established fiscal year and submits a financial statement which:
(a) Is audited as provided in this section; and
(b) Covers at least 1 fiscal year,
Ê any interim financial statement which is filed for the period between the end of the issuer’s last fiscal year and the date of filing need not be audited, but must be prepared in accordance with generally accepted accounting principles.
3. In the case of a registration by an issuer with one or more subsidiaries, a consolidated financial statement complying with the requirements of this section and NRS 90.490 must be filed.
4. The requirements of this section are met by a financial statement prepared in accordance with any requirements prescribed for the issuer by the Securities and Exchange Commission.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)
Development Stage Companies
NAC 90.475 Applicability. (NRS 90.480, 90.490, 90.750)
1. The provisions of NAC 90.475 to 90.490, inclusive, are applicable to the registration pursuant to NRS 90.480 or 90.490 of any security issued by a development stage company. As used in this subsection, “development stage company” means an issuer which has no public market for its securities and no significant earnings or revenues from continuing operations during the last 5 years or any shorter period of its existence.
2. For the purposes of subsection 1:
(a) “Public market” does not include any thin market which does not result in reliable prices. In determining whether a market is a public market, the Administrator may consider:
(1) The history of the market;
(2) The public trading volume in the market;
(3) Any spread between bid and asked prices in the market;
(4) The number of market makers in the market;
(5) Public float in the market;
(6) The pricing formula used in the market;
(7) Inclusion of the market in the Nasdaq; and
(8) Any other relevant factor.
(b) An issuer shall be deemed to have significant earnings from continuing operations if, during each of any two consecutive fiscal years during the period prescribed by subsection 1, the issuer had earnings per share equal to at least 5 percent of the initial public offering price per common share. Nothing in this paragraph shall be deemed to preclude the Administrator from considering other indicators of earnings or revenues.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; 11-19-92; R016-02, 8-6-2002)
NAC 90.480 Contents of registration statement or offering document; penalty for failure to comply. (NRS 90.480, 90.490, 90.500, 90.510, 90.750)
1. The registration statement, in the case of a security registered pursuant to NRS 90.480, or the offering document required by subsection 11 of NRS 90.500 in the case of a security registered pursuant to NRS 90.490, must set forth with reasonable specificity:
(a) The intended use of the proceeds of the offering;
(b) The type of business in which the issuer is or will be engaged;
(c) The product or service offered or to be offered by the issuer; and
(d) The name of each principal manager of the business of the issuer.
2. If, in the case of a security other than a security described in subsection 3, the information required by subsection 1 is not set forth with the specificity required by that subsection, the Administrator may deem the offering to be a blank check blind pool and may deny, suspend or revoke the effectiveness of the registration statement pursuant to NRS 90.510 unless:
(a) The net offering proceeds to the issuer, after deducting offering expenses and commissions, are not less than $150,000;
(b) Notwithstanding the provisions of NAC 90.490, the issuer has equity, contributed in cash, of not less than 10 percent of the aggregate offering price;
(c) Specific disclosure is made of the criteria to be used by management in acquiring a business or other asset;
(d) Disclosure is made of any previous involvement of any officer or director of the issuer in any similar offering, including:
(1) The nature of any transaction entered into by the issuer in connection with that offering;
(2) The dilution experienced by public shareholders as a result of that transaction; and
(3) The extent to which the criteria for selection set forth in the original prospectus were followed in effecting that transaction;
(e) The issuer undertakes in the prospectus to obtain the approval of a majority of disinterested shareholders if he or she proposes to:
(1) Spend more than 50 percent of the net offering proceeds in a transaction or series of related transactions;
(2) Issue new shares of stock equivalent, after completion of the transaction or series of related transactions, to more than 50 percent of the issued and outstanding stock;
(3) Change, without a meeting of the shareholders and within any 12-month period, more than one-half the members of the board of directors; or
(4) Change the criteria for acquisitions set forth in the prospectus; and
(f) The issuer undertakes in the prospectus to distribute an informational statement, before any vote of the shareholders conducted pursuant to paragraph (e), setting forth:
(1) All material facts regarding the proposal, including specific disclosure of the manner in which the criteria for selection set forth in the offering prospectus have been applied;
(2) A reasonably detailed description of any business or asset to be acquired in the proposed transaction;
(3) A detailed disclosure of any related-party transaction, finders’ fee, consulting fee or agreement expected to be entered into or paid within the 12 months following the proposed transaction with or to any person who is an officer, director, promoter or principal shareholder of the issuer; and
(4) A pro forma balance sheet, prepared in accordance with generally accepted accounting principles, which gives effect to the proposed transaction and discloses the dilution to shareholders resulting from the transaction and the book value of the issuer immediately before and immediately after the transaction.
3. If, in the case of a security registered on Form SB-2 with the United States Securities and Exchange Commission, pursuant to Rule 419 of the Securities and Exchange Commission, 17 C.F.R. § 230.419, and registered pursuant to NRS 90.480, the information required by subsection 1 is not set forth with the specificity required by that subsection, the Administrator may deem the offering to be a blank check blind pool and may deny, suspend or revoke the effectiveness of the registration statement pursuant to NRS 90.510 unless the registration statement sets forth with reasonable specificity:
(a) The name of each principal manager of the business of the issuer;
(b) That the net offering proceeds to the issuer are not less than $75,000;
(c) That, notwithstanding the provisions of NAC 90.490, the issuer has equity, contributed in cash, of not less than 10 percent of the aggregate offering price;
(d) That specific disclosure has been made of the criteria to be used by management in acquiring a business or other asset;
(e) That disclosure has been made of any previous involvement of any officer, director or principal manager of the issuer in any similar offering, including:
(1) The nature of any transaction entered into by the issuer in connection with that offering;
(2) The dilution experienced by public shareholders as a result of that transaction; and
(3) The extent to which the criteria for selection set forth in the original prospectus were followed in effecting that transaction;
(f) That the issuer has undertaken in the prospectus to distribute an informational statement, before any vote of the shareholders is conducted pursuant to Rule 419 of the Securities and Exchange Commission, 17 C.F.R. § 230.419, setting forth:
(1) All material facts regarding the proposal, including specific disclosure of the manner in which the criteria for selection set forth in the offering prospectus have been applied;
(2) A detailed description of any business or asset to be acquired in the proposed transaction;
(3) A detailed disclosure of any related-party transaction, finders’ fee, consulting fee or agreement expected to be entered into or paid within the 12 months following the proposed transaction with or to any person who is an officer, director, principal manager, promoter or principal shareholder of the issuer; and
(4) A pro forma balance sheet, prepared in accordance with generally accepted accounting principles, which gives effect to the proposed transaction and discloses the dilution to shareholders resulting from the transaction and the book value of the issuer immediately before and immediately after the transaction;
(g) That the offering will be completed within 3 months after the registration statement registered pursuant to NRS 90.480 becomes effective and that all the money of the investors that was raised in the offering will be held in an escrow account described in 17 C.F.R. § 230.419(b)(1)(i)(A) or in a trust account described in 17 C.F.R. § 230.419(b)(1)(i)(B);
(h) That the money of the investors that is held in the escrow or trust account will not be distributed to any officer, director, principal manager or promoter until an acquisition of another company has been completed and confirmed by the investors; and
(i) Either that any acquisition of another company resulting from an offering made pursuant to Rule 419 of the Securities and Exchange Commission, 17 C.F.R. § 230.419, will be completed within 9 months after the date on which the offering is completed or that the money of the investors which is held in the escrow or trust account, including any interest, will be returned to the investors within 5 days after that date.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; R047-04, 5-25-2004)
NAC 90.483 Registration by qualification: Additional filings required after filing of registration statement; enforcement. (NRS 90.490, 90.560, 90.750)
1. Not later than 60 days after the closing of the offering or the expiration of the period of effectiveness, whichever occurs first, an issuer who is a development stage company and files a registration statement pursuant to NRS 90.490 which has been declared effective in Nevada shall file with the Administrator:
(a) A copy of all sales and promotional materials used in connection with the offering; and
(b) A report which sets forth the:
(1) Amount of securities sold during the effective period of the offering;
(2) Consideration paid for each security; and
(3) Names and addresses of all purchasers.
2. If an issuer fails to file with the Administrator the report described in paragraph (b) of subsection 1, the Administrator may impose a sanction against the issuer pursuant to subsection 2 of NRS 90.630.
(Added to NAC by Sec’y of State, eff. 11-19-92; A by R016-02, 8-6-2002)
NAC 90.485 Limitation on amount of dilution in offering; remedy for violation. (NRS 90.480, 90.490, 90.510, 90.750) The amount of dilution in an offering by a development stage company may not exceed 75 percent of the aggregate offering price unless that limitation is waived by the Administrator pursuant to NRS 90.715. For any violation of this section, the Administrator may deem the offering to be one which will be made with unreasonable amounts of promoters’ profits or participation and issue an order denying effectiveness to, or suspending or revoking the effectiveness of, the registration statement filed in connection with the offering.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; R047-04, 5-25-2004)
NAC 90.490 Offering of debt securities, equity securities or securities convertible to equity securities; offering of partnership units or trust certificate. (NRS 90.480, 90.490, 90.750)
1. In the case of an offering by a development stage company of debt securities, equity securities or securities which are convertible to equity securities, the company must maintain equity of not less than $50,000 or 5 percent of the aggregate offering price, whichever is less. For the purposes of this subsection, equity means the sum of consideration contributed for the equity securities of the issuer plus retained earnings. Retained deficits do not reduce the equity of the issuer for the purposes of this subsection. Capital contributed in the form of services, tangible or intangible property, or evidence of indebtedness may qualify as equity for the purposes of this subsection if approved by the Administrator and:
(a) There is objective evidence of the market value of the services or the tangible or intangible property and title to the property is held by the issuer;
(b) The indebtedness is recourse debt against an obligor who has a verifiable net tangible asset value equal to 100 percent of the principal amount of the indebtedness; or
(c) The indebtedness is secured by collateral with an objectively verified market value at least equal to the principal amount of the indebtedness.
Ê In any case where noncash consideration is contributed as equity to satisfy the requirements of this subsection, the market value of all services and tangible and intangible property, plus the principal amount of all evidence of indebtedness and all cash consideration must equal at least 120 percent of the equity required by this subsection.
2. In the case of an offering of partnership units or a trust certificate, one or more of the general partners, promoters or managers of the partnership or trust must, before the effective date of the registration statement:
(a) Acquire an equity interest in the partnership or trust for a cash consideration of not less than $50,000 or 5 percent of the aggregate offering price, whichever is less;
(b) Irrevocably agree to acquire an interest of the kind described in paragraph (a), for the consideration required by that paragraph, demonstrating to the satisfaction of the Administrator his, her or their ability to perform under the agreement; or
(c) Maintain a tangible net worth, exclusive of homes, furnishings or automobiles, of not less than 10 percent of the aggregate offering price. Any tangible net worth which is used to satisfy the requirements of this paragraph in connection with an offering may not be used to satisfy these requirements in connection with another offering.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)
NAC 90.492 Submission to Division of material change in issuer or offering. (NRS 90.480, 90.490, 90.500, 90.750) During the period of effectiveness of a registration statement, any material change in the issuer or the offering, including, without limitation:
1. Any change in the use of the proceeds of the offering;
2. Any change in the control of the issuer;
3. Any merger, acquisition or reorganization;
4. Any change in the executive officers of the issuer;
5. Any change in the principal business of the issuer; or
6. Any other material change in the prospectus,
Ê must be submitted to the Division in the form of a posteffective amendment that satisfies the registration requirements of this chapter and chapter 90 of NRS.
(Added to NAC by Sec’y of State, eff. 10-16-89)
Exemptions From Registration
NAC 90.495 Claim of exemption: Filing requirements. (NRS 90.520, 90.530, 90.540, 90.750)
1. If a person claims a statutory exemption from the registration requirement of NRS 90.460 and if the person is required to file a notice with the Administrator in order to claim the exemption, the person must file a Claim of Exemption From Securities Registration (Nevada Form N-9), together with any other materials required pursuant to the section of statute or regulation which establishes the exemption and the stated fee.
2. Regardless of whether an exemption from registration requires the filing of a Claim of Exemption From Securities Registration (Nevada Form N-9) with the Administrator, the burden of demonstrating the availability and applicability of the exemption is on the person claiming the exemption.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; 11-19-92; R016-02, 8-6-2002; R047-04, 5-25-2004; R018-21, 6-2-2023)
NAC 90.496 Claim of exemption: Effective period. (NRS 90.520, 90.530, 90.540, 90.750)
1. Except as otherwise provided in subsections 2 and 3, a claim of exemption (Nevada Form N-9) is effective for 1 year after the date the claim is received by the Administrator.
2. A claim of exemption pursuant to paragraph (n) of subsection 2 of NRS 90.520 is effective for 1 year after the date the claim is received by the Administrator or the date on which the fiscal year ends, whichever is later.
3. A claim of exemption pursuant to NAC 90.516, 90.517, 90.518 or 90.519 is effective as long as the applicable qualifications are met for the exemption. Any person who is offering or selling such securities after the claim of exemption is received by the Administrator is covered by the claim of exemption as long as it is effective.
(Added to NAC by Sec’y of State, eff. 11-19-92)
NAC 90.497 Claim of exemption: Expeditious processing. (NRS 90.465, 90.750) If expeditious processing is requested pursuant to NRS 90.465 and the applicable fee set forth in that section has been paid, the Administrator will transmit the notification of acceptance by facsimile machine.
(Added to NAC by Sec’y of State, eff. 11-19-92; A by R047-04, 5-25-2004)
NAC 90.498 Claim of exemption: Offering issued in series of securities or relating to multiple funds. (NRS 90.520, 90.530, 90.540, 90.750) A person who files a claim of exemption (Nevada Form N-9) from the registration requirements of NRS 90.460 involving a securities offering which is issued in a series of securities or relating to multiple funds shall file a separate claim of exemption for each such series or fund unless:
1. The series or funds are identified under the same name and are a single legal entity; and
2. Separate accounting for each series or fund is not maintained.
(Added to NAC by Sec’y of State, eff. 11-19-92)
NAC 90.500 Securities listed on certain exchanges. (NRS 90.520, 90.750) For purposes of the exemption from registration provided by paragraph (g) of subsection 2 of NRS 90.520, a security is also exempt from registration if it is listed or approved for listing upon notice of issuance on:
1. The Chicago Board Options Exchange;
2. Tier I of the Nasdaq OMX PHLX; or
3. Any other exchange designated by the Administrator by order.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; 5-23-96; R016-02, 8-6-2002; R018-21, 6-2-2023)
NAC 90.505 Rated promissory note, draft, bill of exchange or banker’s acceptance. (NRS 90.520, 90.750) For purposes of the exemption from registration provided by paragraph (k) of subsection 2 of NRS 90.520, a promissory note, draft, bill of exchange or banker’s acceptance is exempt from registration if it is rated by Standard & Poor’s Corporation or Mergent, Inc.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; R016-02, 8-6-2002)
NAC 90.510 Statutory exemption for nonissuer transaction by sales representative licensed in State: Inclusion of information on issuer in designated securities manual or other aggregator. (NRS 90.530, 90.750) For purposes of the exemption from registration provided by subsection 3 of NRS 90.530, a transaction is exempt from registration if the information required by that subsection is contained in:
1. Mergent Industrial Manual;
2. Mergent Municipal and Government Manual and News Reports;
3. Mergent Public Utility Manual and News Reports;
4. Mergent Transportation Manual and News Reports;
5. Mergent Bank and Finance Manual;
6. Mergent International Manual and News Reports;
7. Standard & Poor’s Corporation Records; or
8. Any other aggregator designated by order of the Administrator.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; 11-19-92; R016-02, 8-6-2002; R018-21, 6-2-2023)
NAC 90.512 Nonissuer transaction by sales representative licensed in State: Security complying with certain requirements for statutory exemption. (NRS 90.530, 90.750)
1. Except as otherwise provided in subsection 2, a nonissuer transaction by a sales representative licensed in this State in an outstanding security that complies with the provisions of paragraphs (a), (b), (c) and (e) of subsection 3 of NRS 90.530 is exempt from the registration requirements of NRS 90.460.
2. The exemption provided in subsection 1 is not available for a development stage company.
(Added to NAC by Sec’y of State, eff. 11-19-92)
NAC 90.513 Offers of securities made by investment companies registered under Investment Company Act of 1940. (NRS 90.750)
1. Before an investment company registered under the Investment Company Act of 1940 offers a security in this State, the issuer shall submit to the Administrator:
(a) A completed Uniform Investment Company Notice Filing (Form NF); and
(b) If the issuer is:
(1) A unit investment company, a fee of $300; or
(2) An investment company, other than a unit investment company, a fee of $500.
2. The notice and fee required by subsection 1 are effective for 1 year after the date on which the notice and fee are received by the Administrator.
3. If the issuer described in subsection 1 wishes to offer the security beyond the initial 1-year period described in subsection 2, the issuer must, before the expiration of such period, submit to the Administrator:
(a) A complete and updated Uniform Investment Company Notice Filing (Form NF); and
(b) A renewal fee in the amount described in paragraph (b) of subsection 1.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.5135 Offers of securities made by crowdfunding issuers. (NRS 90.750, 90.755)
1. At the time described in subsection 2, a crowdfunding issuer shall submit to the Administrator:
(a) At least one of the following:
(1) A completed Uniform Notice of Federal Crowdfunding Offering Form (Form U-CF); or
(2) A copy of every document the crowdfunding issuer filed with the Securities and Exchange Commission;
(b) If the crowdfunding issuer only submits the documents described in subparagraph (2) of paragraph (a), a completed Uniform Consent to Service of Process Form (Form U-2); and
(c) The fee prescribed by subsection 2 of NRS 90.500.
2. If the crowdfunding issuer:
(a) Has its principal place of business in this State, the crowdfunding issuer must submit the documents and fee prescribed by NRS 90.500 to the Administrator when the crowdfunding issuer makes its initial Form C filing under the Securities Act of 1933 concerning the offering with the Securities and Exchange Commission; or
(b) Sells the offering to residents in this State, the crowdfunding issuer must submit the documents and fee prescribed by NRS 90.500 to the Administrator when the crowdfunding issuer becomes aware that residents of this State have purchased at least 50 percent or more of the aggregate amount of the offering and not later than 30 days after the date of completion of the offering.
3. The submission required by subsection 1 is effective for 1 year after the date on which the documents and fee are received by the Administrator.
4. If the crowdfunding issuer described in subsection 1 wishes to offer the security beyond the initial 1-year period described in subsection 3, the crowdfunding issuer must, before the expiration of such period, submit to the Administrator:
(a) At least one of the following:
(1) A completed Uniform Notice of Federal Crowdfunding Offering Form (Form U-CF) marked “renewal”; or
(2) A cover letter or other document requesting renewal;
(b) A fee in the amount prescribed by subsection 2 of NRS 90.500 to renew the unsold portion of securities for which a filing fee has previously been paid; and
(c) If the amount of securities subject to this section has been increased in accordance with subsection 5 since the initial period described in subsection 3, a fee in the amount prescribed by subsection 2 of NRS 90.500 to cover the increase in the amount of securities.
5. A crowdfunding issuer may increase the amount of securities offered in this State if the crowdfunding issuer, before selling additional securities in this State, submits to the Administrator:
(a) At least one of the following:
(1) Uniform Notice of Federal Crowdfunding Offering Form (Form U-CF) marked “amendment”; or
(2) Any other document describing the transaction; and
(b) A fee in the amount prescribed by subsection 14 of NRS 90.500 to cover the increase in the amount of securities being offered by the crowdfunding issuer.
6. As used in this section, “crowdfunding issuer” means an issuer who offers and sells securities in this State where:
(a) The offering is made under:
(1) Regulation Crowdfunding, 17 C.F.R. Part 227; and
(2) Sections 4(a)(6) and 18(b)(4)(C) of the Securities Act of 1933; and
(b) The issuer:
(1) Has its principal place of business in this State; or
(2) Sells 50 percent or more of the aggregate amount of the offering described in paragraph (a) to residents of this State.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.514 Offers of securities made by Tier 2 issuers. (NRS 90.750, 90.755)
1. A Tier 2 issuer planning to offer and sell securities in this State shall, not less than 21 calendar days before the initial sale of the securities in this State, submit to the Administrator:
(a) At least one of the following:
(1) A completed Uniform Notice of Regulation A – Tier 2 Offering notice filing form; or
(2) A copy of every document filed with the Securities and Exchange Commission;
(b) If the Tier 2 issuer submits the documents described in subparagraph (2) of paragraph (a), a completed Uniform Consent to Service of Process Form (Form U-2); and
(c) The fee prescribed by subsection 2 of NRS 90.500.
2. The submission required by subsection 1 is effective for 1 year after the date on which the documents and fee are received by the Administrator.
3. If the Tier 2 issuer described in subsection 1 wishes to offer a security beyond the initial 1-year period described in subsection 2, the Tier 2 issuer must, on or before the expiration of such period, submit to the Administrator:
(a) At least one of the following:
(1) A completed Uniform Notice of Regulation A – Tier 2 Offering notice filing form marked “renewal”; or
(2) A cover letter or other document requesting such renewal;
(b) A fee in the amount prescribed by subsection 2 of NRS 90.500 to renew the unsold portion of securities for which the fee described in subsection 2 was paid; and
(c) If the amount of securities subject to this section has been increased in accordance with subsection 4 since the initial period described in subsection 2, a fee in the amount prescribed by subsection 2 of NRS 90.500 to cover the increase in the amount of securities.
4. A Tier 2 issuer may increase the amount of securities offered in this State if the Tier 2 issuer, before offering the additional securities, submits to the Administrator:
(a) At least one of the following:
(1) A completed Uniform Notice of Regulation A – Tier 2 Offering notice filing form marked “amendment”; or
(2) Any other document describing the transaction; and
(b) The fee calculated pursuant to subsection 14 of NRS 90.500 to cover the increase in the amount of securities being offered.
5. As used in this section, “Tier 2 issuer” means an issuer who offers and sells securities in this State where the offerings are made under Tier 2 of Federal Regulation A and:
(a) Section 18(b)(3) and section 18(b)(4) of the Securities Act of 1933;
(b) Section 18(c)(2) of the Securities Act of 1933; or
(c) Both paragraphs (a) and (b).
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.5145 Offers of securities made pursuant to Rule 506 of Regulation D of Securities and Exchange Commission. (NRS 90.456, 90.750)
1. The issuer of any security that is offered in this State and which is a covered security pursuant to Rule 506 of Regulation D of the Securities and Exchange Commission, 17 C.F.R. § 230.506, shall make a notice filing by:
(a) Filing a copy of the most recent Form D, as prescribed by the Securities and Exchange Commission pursuant to 17 C.F.R. § 239.500, with the Administrator within 15 days after the first sale of the security in this State; and
(b) Paying a fee of $500 to the Administrator.
2. The notice filing described in subsection 1 is effective for 1 year. If the issuer continues to offer the security in this State after the 1-year period, the issuer must again file the notice filing and fee described in subsection 1.
3. An issuer who is required to make a notice filing pursuant to this section must file with the Administrator a copy of any amendment to the Form D notice described in subsection 1. The Administrator may not charge a fee for the filing of the amendment.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.516 Nonissuer transaction by sales representative licensed in State: Security included or designated for inclusion in Nasdaq Capital Market. (NRS 90.540, 90.750)
1. A nonissuer transaction by a sales representative licensed in this State of an outstanding security that is included or designated for inclusion in The Nasdaq Capital Market is exempt from the registration requirements of NRS 90.460 if:
(a) The security is sold at a price reasonably related to the current market price of the security at the time of the transaction;
(b) The security does not constitute all or part of an unsold allotment to, or subscription or participation by, a broker-dealer who is an underwriter of the security;
(c) The issuer of the security has been in continuous operation for at least 2 years before inclusion or designation for inclusion of the security in The Nasdaq Capital Market;
(d) The issuer of the security has not undergone a major reorganization, merger or acquisition during the 30 days preceding the inclusion or designation for inclusion of the security in The Nasdaq Capital Market which is not reflected in The Nasdaq Capital Market listing; and
(e) The issuer of the security is not in bankruptcy or in receivership at the time of the offer or sale of the security.
2. An exemption provided by this section is available if, preceding the initial use of the exemption, the person claiming the exemption:
(a) Pays a fee of $300 to the Administrator; and
(b) Files a Claim of Exemption From Securities Registration (Nevada Form N-9) with the Administrator.
(Added to NAC by Sec’y of State, eff. 11-19-92; A by R016-02, 8-6-2002; R047-04, 5-25-2004; R018-21, 6-2-2023)
NAC 90.517 Nonissuer transaction by sales representative licensed in State: Security included or designated for inclusion in OTC Bulletin Board. (NRS 90.540, 90.750)
1. A nonissuer transaction by a sales representative licensed in this State of an outstanding security that is included or designated for inclusion in the OTC Bulletin Board as operated by the Financial Industry Regulatory Authority is exempt from the registration requirements of NRS 90.460 if:
(a) The security is sold at a price reasonably related to the current market price of the security at the time of the transaction;
(b) The security does not constitute all or part of an unsold allotment to, or subscription or participation by, a broker-dealer who is an underwriter of the security;
(c) The issuer of the security has been in continuous operation for at least 5 years before inclusion or designation for inclusion of the security in the OTC Bulletin Board;
(d) The issuer has not undergone a major reorganization, merger or acquisition during the 120 days preceding the inclusion or designation for inclusion of the security in the OTC Bulletin Board which is not reflected in the OTC Bulletin Board listing;
(e) The issuer of the security is not in bankruptcy or in receivership at the time of the offer or sale of the security; and
(f) The security has been, except as otherwise provided in subsection 2, outstanding for at least 2 years before inclusion in the OTC Bulletin Board and:
(1) Was part of an initial public offering which was registered in any state as a Small Company Offering Registration using the Small Company Offering Registration Form (Form U-7), as adopted by the North American Securities Administrators Association; or
(2) Was registered for sale in any state as a Regulation A filing with the Securities and Exchange Commission.
2. In the case of an insider, promoter or control person of the issuer or an affiliate of such an insider, promoter or control person, the security must have been held for at least 3 years before inclusion in the OTC Bulletin Board.
3. An exemption provided by this section is available if, preceding the initial use of the exemption, the person claiming the exemption:
(a) Pays a fee of $300 to the Administrator; and
(b) Files a Claim of Exemption From Securities Registration (Nevada Form N-9) with the Administrator.
(Added to NAC by Sec’y of State, eff. 11-19-92; A by R016-02, 8-6-2002; R047-04, 5-25-2004; R033-08, 6-17-2008)
NAC 90.518 Nonissuer transaction by sales representative licensed in State: Security of no more than $100,000 held by shareholder for 12-month period. (NRS 90.540, 90.750)
1. A nonissuer transaction by a sales representative licensed in this State of an outstanding security of no more than $100,000 which was held by a shareholder for any 12-month period is exempt from the registration requirements of NRS 90.460, if:
(a) The security is sold at a price reasonably related to the current market price of the security at the time of the transaction;
(b) The security does not constitute all or part of an unsold allotment to, or subscription or participation by, a broker-dealer who is an underwriter of the security;
(c) The issuer of the security has been in continuous operation for at least 5 years before the resale of the security;
(d) The issuer of the security has not undergone a major reorganization, merger or acquisition during the 120 days preceding the transaction which is not disclosed by the sales representative;
(e) The issuer of the security is not in bankruptcy or in receivership at the time of the offer or sale of the security; and
(f) The security has been, except as otherwise provided in subsection 2, outstanding for at least 2 years before the resale of the security and:
(1) Was part of an initial public offering which was registered in any state as a Small Corporate Offering Registration using the Uniform Limited Offering Circular (Form U-7), as adopted by the North American Securities Administrators Association; or
(2) Was registered for sale in any state as a Regulation A filing with the Securities and Exchange Commission.
2. In the case of an insider, promoter or control person of the issuer or an affiliate of such an insider, promoter or control person, the security must have been held for at least 3 years before the resale of the security.
3. An exemption provided by this section is available if, preceding the initial use of the exemption, the person claiming the exemption:
(a) Pays a fee of $300 to the Administrator; and
(b) Files a Claim of Exemption From Securities Registration (Nevada Form N-9) with the Administrator.
(Added to NAC by Sec’y of State, eff. 11-19-92; A by R047-04, 5-25-2004)
NAC 90.519 Certain securities issued by governmental entities. (NRS 90.540, 90.750) An issuer or a person acting on behalf of an issuer of a security described in paragraph (a) of subsection 2 of NRS 90.520, other than a security issued by this State or an agency, instrumentality or political subdivision of this State, shall file with the Administrator not later than the date of the first offer or sale of the security in this State, whichever occurs earlier, a Claim of Exemption From Securities Registration (Nevada Form N-9) and a fee of $300 if the issuer would have been required to register the security with the Administrator before the enactment of the National Securities Markets Improvement Act of 1996, Public Law 104-290, unless the security or the transaction would have been exempt from registration pursuant to NRS 90.520 or 90.530 before the date of enactment of that Act.
(Added to NAC by Sec’y of State, eff. 11-19-92; A by R016-02, 8-6-2002; R047-04, 5-25-2004)
NAC 90.521 Offer or sale complying with Regulation S of Securities and Exchange Commission. (NRS 90.540, 90.750)
1. An offer or sale of a security is exempt from the registration requirements of NRS 90.460 if it complies with the provisions of Regulation S of the Securities and Exchange Commission, 17 C.F.R. §§ 230.901 to 230.904, inclusive.
2. An exemption provided by this section is available if, preceding the initial use of the exemption, the person claiming the exemption:
(a) Pays a fee of $300 to the Administrator; and
(b) Files a Claim of Exemption From Securities Registration (Nevada Form N-9) with the Administrator.
(Added to NAC by Sec’y of State, eff. 11-19-92; A by R047-04, 5-25-2004)
NAC 90.522 Nonissuer transaction for which designated registration statement filed with and declared effective by Securities and Exchange Commission. (NRS 90.540, 90.750)
1. A nonissuer transaction, whether or not effected through a broker-dealer, involving any class of an issuer’s security is exempt from the registration requirements of NRS 90.460 if:
(a) The issuer filed a registration statement with the Securities and Exchange Commission on Form F-8, F-9 or F-10; and
(b) The Securities and Exchange Commission has declared the registration statement to be effective.
2. An exemption provided by this section is available if, preceding the initial use of the exemption, the person claiming the exemption:
(a) Pays a fee of $300 to the Administrator; and
(b) Files a Claim of Exemption From Securities Registration (Nevada Form N-9) with the Administrator.
(Added to NAC by Sec’y of State, eff. 11-19-92; A by R047-04, 5-25-2004)
NAC 90.525 Isolated transaction. (NRS 90.530, 90.750) For purposes of the exemption from registration provided by subsection 1 of NRS 90.530, a transaction is isolated if it does not occur more frequently, with respect to the same offeror or seller, than twice during any 12-month period.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)
NAC 90.534 Certain offers of securities made over the Internet or similar electronic system. (NRS 90.540, 90.750, 90.830)
1. An offer to sell or purchase a security that is made over the Internet, World Wide Web, or other similar proprietary or common carrier electronic system into this State is an offer to sell or an offer to purchase pursuant to NRS 90.830.
2. An offer made into this State pursuant to subsection 1 is exempt from the provisions of NRS 90.460 and 90.560 if:
(a) The offer indicates, directly or indirectly, that the securities are not being offered to the residents of this State; and
(b) An offer is not otherwise specifically directed to any person in a state by, or on behalf of, the issuer of the securities.
3. No sales of the securities may be made in this State until the offering has been registered and declared effective and the final prospectus has been delivered to the investor before such sale or the sales are exempt from registration and the appropriate notice, if required, has been filed with the Administrator.
(Added to NAC by Sec’y of State, eff. 10-30-97; A by R018-21, 6-2-2023)
NAC 90.536 Certain offers of securities made to accredited investors. (NRS 90.540, 90.567, 90.750)
1. Any offer to sell or the sale of a security by an issuer in a transaction that meets the requirements of this section is exempt from NRS 90.460 and 90.560 if the following conditions are met:
(a) Sales of securities must be made only to persons who are or the issuer reasonably believes are accredited investors. “Accredited investor” has the meaning ascribed to it in 17 C.F.R. § 230.501(a).
(b) This exemption is not available to an issuer that is in the development stage, has no specific business plan or purpose, or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies, or other entity or person.
(c) The issuer must reasonably believe that all purchasers are purchasing for investment and not with the view to or for sale in connection with a distribution of the security. Any resale of a security sold in reliance on this exemption within 12 months after sale, except a resale to an accredited investor or pursuant to a registration statement effective under NRS 90.470, 90.480 or 90.490, must be presumed to be with a view to distribution and not for investment. Securities issued under this exemption may only be resold pursuant to registration or an exemption under NRS 90.530.
2. This exemption is not available to an issuer if the issuer, any of the issuer’s predecessors, any affiliated issuer, any of the issuer’s directors, officers, general partners, beneficial owners of 10 percent or more of any class of its equity securities, any of the issuer’s promoters, promoters presently connected with the issuer in any capacity, any underwriter of the securities to be offered, or any partner, director or officer of such underwriter:
(a) Has filed a registration statement which is the subject of a currently effective registration stop order entered by any state securities administrator or the United States Securities and Exchange Commission;
(b) Has been convicted of any criminal offense in connection with the offer, purchase or sale of any security, or involving fraud or deceit;
(c) Is currently subject to any state or federal administrative enforcement order or judgment finding fraud or deceit in connection with the purchase or sale of any security; or
(d) Is currently subject to any order, judgment or decree of any court of competent jurisdiction, temporarily, preliminarily or permanently restraining or enjoining such party from engaging in or continuing to engage in any conduct or practice involving fraud or deceit in connection with the purchase or sale of any security.
3. Paragraph (d) of subsection 2 does not apply if:
(a) The party subject to the disqualification is licensed or registered to conduct securities-related business in the state in which the order, judgment or decree creating the disqualification was entered against such party; or
(b) Before the first offer under this exemption, the state securities administrator, or the court or regulatory authority that entered the order, judgment or decree, waives the disqualification.
4. A general announcement of the proposed offering may be made by any means. The general announcement must include only the following information, unless additional information is specifically permitted by the Administrator:
(a) The name, address and telephone number of the issuer of the securities;
(b) The name, a brief description and the price, if known, of any security to be issued;
(c) A brief description of the business of the issuer in 25 words or less;
(d) The type, number and aggregate amount of securities being offered;
(e) The name, address and telephone number of the person to contact for additional information; and
(f) A statement that:
(1) Sales will only be made to accredited investors;
(2) No money or other consideration is being solicited or will be accepted; and
(3) The securities have not been registered with or approved by any state securities agency or the Securities and Exchange Commission and are being offered and sold pursuant to any exemption from registration.
5. The issuer, in connection with an offer, may provide information in addition to the general announcement required by subsection 4 if such information:
(a) Is delivered through an electronic database that is restricted to persons who have been prequalified as accredited investors; or
(b) Is delivered after the issuer reasonably believes that the prospective purchaser is an accredited investor.
6. No telephone solicitation is permitted unless, before placing the call, the issuer reasonably believes that the prospective purchaser to be solicited is an accredited investor.
7. Dissemination of the general announcement of the proposed offering to persons who are not accredited investors does not disqualify the issuer from claiming the exemption under this section.
8. The issuer shall file with the Administrator a notice of the transaction, a consent to service of process, a copy of the general announcement and a fee of $500 within 15 days after the first sale in this State.
(Added to NAC by Sec’y of State, eff. 10-30-97; A by R047-04, 5-25-2004)
NAC 90.538 Certain offers of securities made to solicit interest. (NRS 90.530, 90.540, 90.550, 90.750)
1. An offer to sell a security made by or on behalf of an issuer for the sole purpose of soliciting an indication of interest in receiving a prospectus or its equivalent for the security is exempt from NRS 90.460 and 90.560 if:
(a) The issuer:
(1) Is or will be a business entity organized under the laws of one of the states, territories or possessions of the United States or one of the provinces or territories of Canada; and
(2) Is engaged in or proposes to engage in a business other than petroleum exploration or production or mining or other extractive industries and is not an offering for which the specific business or properties cannot now be described;
(b) The offeror intends to register the security in this State and conduct its offering pursuant to Regulation A or Rule 504 of Regulation D of the Securities and Exchange Commission;
(c) Ten business days before the initial solicitation of interest, the offeror files with the Administrator a Solicitation of Interest Form, provided by the Administrator, and any other materials to be used to conduct solicitations of interest, including, but not limited to, the script of any broadcast to be made and a copy of any notice to be published;
(d) Five business days before their usage, the offeror files with the Administrator any amendments to the materials filed pursuant to paragraph (c) or additional materials to be used to conduct solicitations of interest, except for materials provided to a particular offeree pursuant to a request by that offeree;
(e) No Solicitation of Interest Form, script, advertisement or other material which the offeror has been notified by the Administrator not to distribute is used to solicit indications of interest;
(f) Except for scripted broadcasts and published notices, the offeror does not communicate with any offeree about the contemplated offering unless the offeree is provided with the most current Solicitation of Interest Form at or before the time of the communication or within 5 days after the communication;
(g) During the solicitation of interest period, the offeror does not solicit or accept money or a commitment to purchase securities;
(h) No sale is made until 7 days after delivery to the purchaser of a prospectus; and
(i) The offeror does not know, and in the exercise of reasonable care, could not know that the issuer, any of the issuer’s officers, directors or promoters or any of the issuer’s shareholders who own at least 10 percent of its stock:
(1) Has filed a registration statement which is the subject of a currently effective registration stop order entered pursuant to any federal or state securities law within 5 years before the filing of the Solicitation of Interest Form;
(2) Has been convicted before the filing of the Solicitation of Interest Form of any felony or misdemeanor in connection with the offer, purchase or sale of any security or any felony involving fraud or deceit, including, but not limited to, forgery, embezzlement, obtaining money under false pretenses, larceny or conspiracy to defraud;
(3) Is currently subject to any federal or state administrative enforcement order or judgment entered by any state securities administrator or the Securities and Exchange Commission before the filing of the Solicitation of Interest Form or is subject to any federal or state administrative enforcement order or judgment entered before the filing of the Solicitation of Interest Form in which fraud or deceit, including, but not limited to, making untrue statements of material facts and omitting to state material facts, was found;
(4) Is subject to any federal or state administrative enforcement order or judgment which prohibits, denies or revokes the use of any exemption from registration in connection with the offer, purchase or sale of securities; or
(5) Is currently subject to any order, judgment, or decree of any court of competent jurisdiction temporarily or preliminarily restraining or enjoining, or is subject to any order, judgment or decree of any court of competent jurisdiction permanently restraining or enjoining, such party from engaging in or continuing any conduct or practice in connection with the purchase or sale of any security or involving the making of any false filing with the state entered before the filing of the Solicitation of Interest Form.
2. The prohibitions of paragraph (i) of subsection 1 do not apply if the person subject to the disqualification is duly licensed or registered to conduct securities-related business in the state in which the administrative order or judgment was entered against such person or if the broker-dealer employing such person is licensed or registered in this State and Form B-D filed with this State discloses the order, conviction, judgment or decree relating to such person. No person disqualified pursuant to this section may act in a capacity other than that for which the person is licensed or registered. Any disqualification caused by this section is automatically waived if the agency which created the basis for disqualification determines upon a showing of good cause that it is not necessary under the circumstances that the exemption be denied.
3. The failure to comply with any condition of subsection 1 will not result in the loss of the exemption from the requirements of NRS 90.460 for any offer to sell that is made to a particular person or entity if the offeror shows:
(a) The failure to comply did not pertain to a condition directly intended to protect that particular person or entity;
(b) The failure to comply was insignificant with respect to the offering as a whole; and
(c) A good faith and reasonable attempt was made to comply with all applicable conditions of subsection 1.
Ê If an exemption is established only through reliance upon this section, the failure to comply is actionable as a violation of this section by the Administrator and constitutes grounds for denying or revoking the exemption as to a specific security or transaction.
4. The offeror shall comply with the following requirements:
(a) Any published notice or script for broadcast must contain at least the identity of the chief executive officer of the issuer, a brief and general description of its business and products and statements in substantially the following form:
NOTICE
No money or other consideration is being solicited and none will be accepted.
No sale of the securities or commitment to purchase will be made or accepted until an offering circular that includes complete information about the issuer and the offering has been received by the offeree.
An indication of interest made by a prospective investor does not constitute an obligation or commitment of any kind.
This offer is being made pursuant to an exemption from registration under the federal securities laws and the laws of this State. No sale may be made until the offering statements are qualified by the Securities and Exchange Commission and the securities are registered in this State.
(b) All communications with prospective investors made in reliance on this section must cease after a registration statement is filed in this State, and no sale may be made until at least 20 calendar days after the last communication made in reliance on this section.
(c) A preliminary prospectus or its equivalent may only be used in connection with an offering for which indications of interest have been solicited under this section if the offering is conducted by a licensed broker-dealer.
Ê Failure to comply with these requirements will not result in the loss of the exemption from the requirements of NRS 90.460 and 90.560, but is a violation of the Securities Act of 1933, is actionable by the Administrator under NRS 90.630 and constitutes grounds for denying or revoking the exemption as to a specific security or transaction.
5. The Administrator may waive any condition of this exemption in writing, upon application by the offeror and cause having been shown. Compliance or attempted compliance with this section, or the absence of any objection or order by the Administrator with respect to any offer of securities undertaken pursuant to this section, shall not be deemed to be a waiver of any condition of this section or deemed to be a confirmation by the Administrator of the availability of this section.
6. An offer made in reliance on this section is not a violation of NRS 90.460 by virtue of being integrated with subsequent offers or sales of securities unless such subsequent offers and sales would be integrated under federal securities laws.
7. Issuers on whose behalf indications of interest are solicited under this section may not make offers to sell or sales in reliance on subsection 11 of NRS 90.530 until 6 months after the last communication with a prospective investor made pursuant to this section.
(Added to NAC by Sec’y of State, eff. 10-30-97)
PROCEEDINGS BEFORE THE ADMINISTRATOR
NAC 90.540 Applicability. (NRS 90.750, 233B.050) The provisions of NAC 90.540 to 90.610, inclusive, govern practice and procedure before the Administrator in any proceeding under NRS 90.420, 90.510, 90.630, 90.800 or 90.820.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)
NAC 90.545 Notice. (NRS 90.750, 233B.050)
1. Notice of any hearing or opportunity for hearing required in a proceeding before the Administrator must be:
(a) Served upon each respondent and any other person designated by order of the Administrator, by personal service or by certified mail to the last known address of the person; and
(b) If the Administrator by order so directs, published at least once in a newspaper of general circulation in the county specified by the Administrator.
2. Except as otherwise provided in NRS 90.800, the notice must be served and published, if publication is ordered, not less than 10 days nor more than 30 days before the date fixed for the hearing, unless the Administrator for good cause shown prescribes a shorter period.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)
NAC 90.550 Representation by counsel. (NRS 90.750, 233B.050)
1. Any party to a proceeding before the Administrator is entitled to be represented by counsel.
2. Before filing an answer, a person who is not a member of the State Bar of Nevada but who is a member in good standing and eligible to practice before the bar of any United States court or of the highest court of any state, territory or insular possession of the United States, and who has been retained to represent a client in a proceeding before the Administrator, shall comply with Nevada Supreme Court Rule 42, including, without limitation:
(a) Filing an application for admittance under the Rule with the Nevada Supreme Court;
(b) Associating with an active member of the State Bar of Nevada as counsel of record; and
(c) Receiving the approval of the Nevada Supreme Court to appear before the Administrator pursuant to the Rule.
3. An active member of the State Bar of Nevada shall file with the Administrator a copy of the motion to associate filed with the Nevada Supreme Court pursuant to Supreme Court Rule 42.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; R018-21, 6-2-2023)
NAC 90.555 Administrator’s staff to bring proceeding; respondent. (NRS 90.750, 233B.050)
1. The staff of the Administrator will bring any proceeding before the Administrator or his or her representative, may appear at any hearing, and have all rights of participation as a party to the proceeding. If counsel is desired, the Attorney General will represent the staff.
2. Any party against whom a proceeding is brought will be styled a respondent.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)
NAC 90.560 Complaint; summons; answer; default order; setting of hearing. (NRS 90.750, 233B.050, 233B.121)
1. Initial pleadings before the Administrator must be entitled complaint and answer.
2. The complaint described in subsection 1 must be served with a summons which sets forth:
(a) The location for filing an answer;
(b) The person representing the Division in the proceedings; and
(c) A statement that:
(1) An answer must be received not later than 20 days after service of the complaint and summons; and
(2) Failing to answer will result in a default order on the complaint and may result in an award of any relief sought in the complaint.
3. The respondent shall file an answer to the complaint not later than 20 days after service of the complaint and summons upon the respondent, unless an extension of time is granted by the Administrator. Matters alleged by way of affirmative defense must be separately stated and numbered.
4. If, after service of the complaint and summons, the respondent fails to answer the complaint in accordance with subsection 3, the Division may file a default order and apply for a judgment on any or all of the claims in the complaint. Upon the filing of a default order, the Administrator shall set the default order for a hearing and determine the appropriate relief based on the complaint.
5. Except as otherwise provided in NRS 90.800 and subsection 4, a complaint will be set for hearing at the earliest convenience of the Administrator, unless notice of satisfaction of the complaint, by answer or otherwise, is received by the Administrator.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; R018-21, 6-2-2023)
NAC 90.565 Motions. (NRS 90.750, 233B.050)
1. Any motion and any reply thereto, except for a motion or any reply made during a hearing, must:
(a) Be in writing;
(b) Except in the case of a motion or opposition thereto for an extension of time or for additional discovery, contain a memorandum of law describing with particularity the grounds of the motion and the relief sought; and
(c) Be served upon each opposing party in the manner required by NAC 90.570.
2. A motion or opposition must not be more than 10 pages in length.
3. A reply to any opposition must not be more than 5 pages in length.
4. A decision upon any motion which does not dispose of the proceeding on the merits will be rendered without oral argument unless a hearing is ordered by the Administrator.
5. Any motion not acted upon by the Administrator shall be deemed denied upon the filing of the final order of the Administrator in the proceeding.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; R018-21, 6-2-2023)
NAC 90.570 Pleading, motion, opposition, reply or other paper: Filing and service. (NRS 90.750, 233B.050)
1. An original and two legible copies of any pleading, motion, opposition, reply or other paper must be:
(a) Filed with the Administrator; and
(b) Served on all parties to the proceeding.
2. A motion must be filed and served in accordance with subsection 1 not later than 20 days before a hearing.
3. An opposition to a motion must be filed and served in accordance with subsection 1 not later than 10 days before a hearing.
4. A reply to an opposition to a motion must be filed and served in accordance with subsection 1 not later than 5 days before a hearing.
5. Upon good cause shown, the Administrator may shorten or extend any period of time described in subsection 2, 3 or 4.
6. Any opinion, decision, order, motion, opposition, reply or other document required to be served by the Administrator or any party must be served upon all parties to the proceeding by personal service or by certified mail, unless the party consents to accept service by electronic means.
7. In the case of service by mail, service is complete when a true copy of the document, properly stamped and addressed to the last known address of the recipient, is deposited in the United States mail.
8. Any document served by the Administrator or any party must contain an acknowledgment or certificate of service.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; R018-21, 6-2-2023)
NAC 90.575 Discovery. (NRS 90.750, 233B.050)
1. A party may request discovery by motion. A motion for additional discovery must be accompanied by a certificate of the moving party or his or her attorney, stating that an attempt has been made to obtain the requested discovery through informal means, but that the attempt has been unavailing.
2. The Administrator may grant or deny discovery, or impose any limitation or condition upon discovery, as he or she deems appropriate.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)
NAC 90.577 Prehearing conference. (NRS 90.750, 233B.050)
1. Before a hearing, the Administrator may issue an order for a prehearing conference.
2. The order described in subsection 1 must provide:
(a) The time and place of the prehearing conference; and
(b) The issues to be resolved at the prehearing conference.
3. The Administrator may enter any reasonable order governing the conduct of the prehearing conference, including, without limitation, authorizing a party, for good cause shown, to attend the prehearing conference by telephone.
4. If a party is represented by counsel, the counsel must be present at the prehearing conference.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.579 Witnesses and exhibits. (NRS 90.750, 233B.050)
1. Except as otherwise provided by the Administrator and subsection 2, the parties to a hearing must, not later than 10 days before the date of the hearing:
(a) Exchange written lists of witnesses and exhibits; and
(b) Provide a copy of each exhibit.
2. On the date of the hearing, each party must be prepared to identify any exhibit to be admitted by the stipulation of the parties.
(Added to NAC by Sec’y of State by R018-21, eff. 6-2-2023)
NAC 90.580 Location of hearing. (NRS 90.750, 233B.050)
1. Except as otherwise provided in subsection 2, any hearing in a proceeding before the Administrator will be held before the Administrator or his or her representative at the office of the Administrator or at any other appropriate location designated by the Administrator.
2. Any party may, by motion, request that any hearing be held at a place in this State other than the office of the Administrator or the location designated by the Administrator. No such motion will be granted unless the moving party:
(a) Agrees to pay any cost associated with the relocation of the hearing; and
(b) Deposits with the Administrator an amount of money, to be determined by the Administrator, sufficient to pay the cost of relocation.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)
NAC 90.585 Conduct of hearing. (NRS 90.750, 233B.050)
1. The provisions of NRS 233B.121 to 233B.1235, inclusive, and this section will govern the conduct of any hearing on the merits in a proceeding before the Administrator.
2. The Administrator or his or her representative will call the hearing to order and proceed to take the appearances and act upon any pending motions.
3. The staff of the Administrator will first introduce evidence sufficient to establish the scope of the hearing and the jurisdiction of the Administrator. Evidence will thereafter be presented in the order determined by the Administrator or the representative.
4. All testimony to be considered by the Administrator or the representative in any hearing, except matters noticed by him or her or entered by stipulation, must be sworn testimony.
5. The Administrator or the representative may rule on the admission or exclusion of evidence and may take any action necessary to assure the fair and orderly conduct of the hearing.
6. Oral proceedings at the hearing will be taken down and transcribed by a certified court reporter.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; R018-21, 6-2-2023)
NAC 90.590 Record. (NRS 90.750, 233B.050) The Administrator will cause a record to be made of the proceeding in accordance with the provisions of NRS 233B.121. A party desiring a copy of any record or transcript may obtain it from the Administrator by paying the cost of preparing the record or transcript.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)
NAC 90.595 Continuance or adjournment of hearing. (NRS 90.750, 233B.050) Before or during a hearing, the Administrator or his or her representative may, upon proper showing or on his or her own motion, continue or adjourn the hearing to a later time or a different place.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)
NAC 90.600 Fees of witnesses. (NRS 90.750, 233B.050) A witness required to appear at a hearing before the Administrator is entitled to receive from the party calling him or her the fees and reimbursement for mileage provided to witnesses in civil cases pursuant to NRS 50.225.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)
NAC 90.605 Rendering of order or decision; petition for rehearing. (NRS 90.750, 233B.050)
1. An order or decision on a hearing will be rendered within 30 days after the completion of the hearing.
2. Any party aggrieved by a decision of the Administrator or his or her representative may file a petition for rehearing as provided in this section.
3. A petition for rehearing must:
(a) Not exceed 10 pages in length;
(b) Be filed and served upon each opposing party within 15 days after service of the decision; and
(c) Set forth with particularity each point of law or fact on which the petitioner relies.
4. Unless the Administrator so orders, the filing of a petition for rehearing does not stay enforcement of the decision.
5. A rehearing may be granted for any of the following reasons:
(a) Irregularity in the hearing proceedings, to which timely objection has been made;
(b) Accident or surprise which ordinary prudence could not have guarded against; or
(c) Newly discovered material evidence which could not with reasonable diligence have been produced at the hearing.
6. The staff of the Administrator may file and serve a written answer to the petition. The answer must be filed and served within 10 days after service of the petition.
7. Oral argument on the petition will not be permitted.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)
NAC 90.610 Granting or denying petition for rehearing. (NRS 90.750, 233B.050)
1. If a petition for rehearing is granted, the Administrator may reverse or modify the decision, order the matter set for hearing, or enter any other order appropriate under the circumstances.
2. An order granting or denying a petition for rehearing must be filed within 30 days after the filing and service of the petition. If a petition for rehearing is granted, a decision on rehearing must be filed within 60 days after service of the order granting the petition.
(Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89)