Nevada 2021 Regular Session Status: Enacted

SB 9 — Makes certain changes relating to securities. (BDR 7-423)

Last action — Chapter 60.

  1. ✓
    Introduced
  2. ✓
    In Committee
  3. ✓
    Passed Senate
  4. ✓
    Passed Assembly
  5. ✓
    To Executive
  6. 6
    Enacted

This bill has been enacted into law. Introduced November 18, 2020. Enacted.

Prognosis

Advancing 50% · moderate confidence

Where this bill stands today.

Odds of enactment

High

How often bills like it became law.

  • Enacted

    Current position in the legislative process.

  • 1 sponsor

    1 primary, 0 co-sponsors signed on.

Prognosis reads this bill's own signals — stage, sponsorship breadth, committee status, recorded votes and cross-state momentum. Odds come from a model trained on which bills have become law.

Bill Text

What changed in the latest version

380 added · 407 removed

Plain-language change summary

Senate Bill No. 9 has been amended to create a state-level exemption from licensing requirements for investment advisers managing certain qualifying private funds. This change matches a federal exemption under the Dodd-Frank Act, enabling smaller investment advisers—those managing under $150 million in assets—to operate without registering with federal authorities, provided they adhere to certain requirements and have no past violations. This amendment is significant because it simplifies regulations for smaller investment firms, potentially encouraging more investment opportunities in these funds.

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REQUIRES TWO-THIRDS MAJORITY VOTE (§ 4) EXEMPT (Reprinted with amendments adopted on May 13, 2021) FIRST REPRINT S.B.
Senate Bill No.
9 SENATE BILL NO .
9–Committee on Judiciary CHAPTER..........
9–COMMITTEE ON JUDICIARY (O N BEHALF OF THE LIEUTENANT G OVERNOR ) PREFILED N OVEMBER 18, 2020 ____________ Referred to Committee on Judiciary SUMMARY—Makes certain changes relating to securities.
(BDR 7-423) FISCAL NOTE:
Effect on Local Government:
No.
Effect on the State:
Yes.
~ EXPLANATION – Matter in bolded italics is new;
matter between brackets [omitted material] is material to be omitted.
Legislative Counsel’s Digest:
LegiThe federal Dodd-Frank Wall Street Reform and Consumer Protection Act created an exemption from the requirement that investment advisers to certain private funds register with the Securities and Exchange Commission.
The federal Dodd-Frank Wall Street Reform and Consumer Protection Act created an exemption from the requirement that investment advisers to certain exemption applies to investment advisers who:
This exemption applies to investment advisers who:
275.203(m)-1) Existing state law makes it unlawful for a person to transact business in this State as an investment adviser unless the person is:
275.203(m)-1) Existing state law makes it unlawful for a person to transact business in this the licensing requirements of this State.
(1) licensed;
(NRS 90.330) Section 2-4 of this bill create a state-level exemption from the requirement for licensure for investment advisers to certain qualifying private funds.
or (2) exempt from the licensing requirements of this State.
Section 4 provides that the exemption applies to an investment adviser if:
(NRS 90.330) Section 2-4 of this bill create to certain qualifying private funds.uirement for licensure for investment advisers Section 4 provides that the exemption applies to an investment adviser if:
(4) the investment adviser files certain reports - *SB9_R1* – 2 – of State;
(4) the investment adviser files certain reports of State;
Existing law also exempts from the licensing requirements investment advisers who are registered or not required to be registered under the Investment Advisers Act of 1940 if:
Existing law also exempts from the licensing requirements investment advisers Act of 1940 if:
(1) the only clients of the investment adviser are other investment adviser has no place of business in this State and directs business communicationsnt in this State to a person who is an existing client of the investment adviser and whose principal place of residence is not in this State;
(1) the only clients of the investment adviser are other investment - 81st Session (2021) – 2 – advisers, broker-dealers or financial or institutional investors;
or (3) the investment adviser has no place of business in this State and during any 12 consecutive months it does not direct business communications in this State to more than five present or prospective clients under certain circumstances, whether or not the person or client to whom the communication is directed is present in this State.
(2) the investment adviser has no place of business in this State and directs business communications in this State to a person who is an existing client of the investment adviser and has no place of business in this State and during any 12 consecutive months it doesser not direct business communications in this State to more than five present or prospective clients under certain circumstances, whether or not the person or client to whom the communication is directed is present in this State.
(NRS 90.340) Section 6 of this bill provides that regardless of whether an investment adviser qualifies for an exemption from the licensing requirements under existing law, if must also satisfy the requirements of section 4 in order to qualify for an exemption.
(NRS 90.340) Section 6 of this bill provides that regardless of whether an investment adviser qualifies for an exemption from the licensing requirements under existing law, if the investment adviser advises a qualifying private fund, the investment adviser must also satisfy the requirements of section 4 in order to qualify for an exemption.
(NRS 90.330) Section 6 provides that if a representative of an investment adviser is employed by an investment adviser who is exempt from the licensing requirements pursuant to section 4, then the representative of the investment adviser is also exempt from his or her respective licensing requirements.
(NRS 90.330) Section 6 provides that if a representative of an investment adviser is employed by an investment adviser who is exempt from the licensing requirements pursuant to section 4, then the representative of the inveSection 4.5 of this bill requires the Administrator to submit a written reports.
Section 4.5 of this bill requires the Administrator to submit a written report biennially to the Director of the Legislative Counsel Bureau for submission to the Secretary of State or by similar means.
biennially to the Director of the Legislative Counsel Bureau for submission to the Legislative Commission and to publish the report on an Internet website of the Secretary of State or by similar means.
(3) a determination of whether the Securities Division of the Office of the Secretary of State has the legislation relating to the protection of investors in this State.ndations for Existing law authorizes the Administrator to adopt certain regulations and requires the Administrator to take into consideration:
(3) a determination of whether the Securities Division of the Office of the Secretary of State has the resources necessary to achieve its objectives;
and (4) any recommendations for legiExisting law authorizes the Administrator to adopt certain regulations and requires the Administrator to take into consideration:
(NRS 90.750) Section 8.5 of this bill - *SB9_R1* – 3 – additionally requires the Administrator to consider any model rule, regulation, exemption or like provision adopted by the North American Securities AdmSection 5 of this bill makes a conforming change to indicate the appropriate placement of sections 2 and 3 of this bill in the Nevada Revised Statutes.
(NRS 90.750) Section 8.5 of this bill additionally requires the Administrator to consider any model rule, regulation, exemption or like provision adopted by the North American Securities Administrators Association.
Section 5 of this bill makes a conforming change to indicate the appropriate placement of sections 2 and 3 of this bill in the Nevada Revised Statutes.
- 81st Session (2021) – 3 – EXPLANATION – Matter in bolded italics is new;
matter between brackets [omitted material] is material to be omitted.
(a) The investment adviser provides advice solely to one or more qualifying private funds;
more qualifying private funds;provides advice solely to one or (b) The investment adviser is not required to register with the Securities and Exchange Commission;
(b) The investment adviser is not required to register with the Securities and Exchange Commission;
- *SB9_R1* – 4 – (2) Disclose in writing, at the time of purchase, the following information to each beneficial owner of the eligible fund:
(2) Disclose in writing, at the time of purchase, the following information to each beneficial owner of the eligible fund:
(II) Any duty owed by the investment adviser to the beneficial owner;
- 81st Session (2021) – 4 – (II) Any duty owed by the investment adviser to the beneficial owner;
and (3) Annually obtain an audited financial statement of each eligible fund and deliver the statement to each beneficial owner of the corresponding eligible fund.
and eligible fund and deliver the statement to each beneficial owner of the corresponding eligible fund.
and (b) Shall be deemed to be filed on the date that the filing and fee described in paragraph (e) of subsection 1 are filed and accepted on behalf of the State by the Investment Adviser Registration Depository.
and fee described in paragraph (e) of subsection 1 are filed andng and accepted on behalf of the State by the Investment Adviser Registration Depository.
and - *SB9_R1* – 5 – (2) Is not a venture capital fund, as defined in 17 C.F.R.
and (2) Is not a venture capital fund, as defined in 17 C.F.R.
(c) “Value of the primary residence” means the fair market value of the primary residence of a person, subtracted by the amount of debt secured by the property up to its fair market value.
- 81st Session (2021) – 5 – (c) “Value of the primary residence” means the fair market value of the primary residence of a person, subtracted by the amount of debt secured by the property up to its fair market value.
On or before August 15 of each even-numbered year, the Administrator shall:
On or before August 15 of each even-numbered yea(a) Submit a written report to the Director of the Legislative Counsel Bureau for submission to the Legislative Commission;
(a) Submit a written report to the Director of the Legislative Counsel Bureau for submission to the Legislative Commission;
90.211 As used in this chapter, unless the context otherwise requires, the words and terms defined in NRS 90.215 to 90.309, inclusive, and sections 2 and 3 of this act have the meanings ascribed to them in those sections.
requires, the words and terms defined in NRS 90.215 to 90.309,ise inclusive, and sections 2 and 3 of this act have the meanings ascribed to them in those sections.
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- *SB9_R1* – 6 – (2) The investment adviser has no place of business in this State and directs business communications in this State to a person who is an existing client of the investment adviser and whose principal place of residence is not in this State;
(2) The investment adviser has no place of business in this State and directs business communications in this State to a person - 81st Session (2021) – 6 – principal place of residence is not in this State;
or (3) The investment adviser has no place of business in this State and during any 12 consecutive months it does not direct business communications in this State to more than five present or prospective clients other than those specified in subparagraph (1), whether or not the person or client to whom the communication is directed is present in this State;
ornd whose (3) The investment adviser has no place of business in this State and during any 12 consecutive months it does not direct business communications in this State to more than five present or prospective clients other than those specified in subparagraph (1), whether or not the person or client to whom the communication is directed is present in this State;
or (II) The Uniform Combined State Law Examination designated as the Series 66 examination and the General Securities Registered Representative Examination, designated as the Series 7 examination;
or (II) The Uniform Combined State Law Examination Registered Representative Examination, designated as the Series 7s examination;
The Administrator may, by order or rule, waive the examinations required by subparagraph (1) of paragraph (c) of subsection 1 for an applicant or a class of applicants if the Administrator determines that the examination is not necessary for the protection of investors because of the training and experience of the applicant or class of applicants.
The Administrator may, by order or rule, waive the examinations required by subparagraph (1) of paragraph (c) of subsection 1 for an applicant or a class of applicants if the the protection of investors because of the training and experience of the applicant or class of applicants.
The application for - *SB9_R1* – 7 – licensing must contain the social security number of the applicant and any other information the Administrator determines by regulation to be necessary and appropriate to facilitate the administration of this chapter.
The application for - 81st Session (2021) – 7 – licensing must contain the social security number of the applicant and any other information the Administrator determines by regulation to be necessary and appropriate to facilitate the administration of this chapter.
2.
applicant who has filed and maintains a completed and current registration with the Securities and Exchange Commission or a self- regulatory organization if the information contained in that registration is readily available to the Administrator through the Investment Adviser Registration Depository, the Central Registration Depository or another depository for registrations that has been approved by the Administrator by regulation or order.
The requirements of subsection 1 are satisfied by an applicant who has filed and maintains a completed and current registration with the Securities and Exchange Commission or a self- regulatory organization if the information contained in that registration is readily available to the Administrator through the Investment Adviser Registration Depository, the Central Registration Depository or another depository for registrations that has been approved by the Administrator by regulation or order.
[(b) “Investment Adviser Registration Depository” means the Investment Adviser Registration Depository of the Financial Industry Regulatory Authority, or its successor, and the North American Securities Administrators Association or its successor.] Sec.
[(b) “Investment Adviser Registration Depository” means the Investment Adviser Registration Depository of the Financial American Securities Administrators Association or its successor.] Sec.
2.
- 81st Session (2021) – 8 – harmony with the regulations adopted by the Securities and Exchange Commission under the federal securities laws and to encourage uniformity with the regulations of securities agencies and administrators in other states, the Administrator, so far as is consistent with this chapter, shall take into consideration [the] :
To keep regulations adopted by the Administrator in harmony with the regulations adopted by the Securities and - *SB9_R1* – 8 – Exchange Commission under the federal securities laws and to encourage uniformity with the regulations of securities agencies and administrators in other states, the Administrator, so far as is consistent with this chapter, shall take into consideration [the] :
Unless other criteria are specifically provided in this chapter or special provision is made for an emergency, a regulation or order may not be adopted or entered unless the Administrator determines from evidence adduced at a public hearing and entered in the record, showing specifically how the applicable criteria are satisfied, that the action is:
Unless other criteria are specifically provided in this chapter or special provision is made for an emergency, a regulation or order may not be adopted or entered unless the Administrator determines from evidence adduced at a public hearing and entered in the record, the action is:ically how the applicable criteria are satisfied, that (a) In the public interest and appropriate for the protection of investors;
(a) In the public interest and appropriate for the protection of investors;
Unless the Administrator by regulation or order provides otherwise, a financial statement required under this chapter must be prepared in accordance with generally accepted accounting principles or other accounting principles as are prescribed for the issuer of the financial statement by the Securities and Exchange Commission.
otherwise, a financial statement required under this chapter must be prepared in accordance with generally accepted accounting principles or other accounting principles as are prescribed for the issuer of the financial statement by the Securities and Exchange Commission.
Except as otherwise provided in subsection 2, a financial planner shall maintain insurance covering liability for errors or omissions, or a surety bond to compensate clients for losses actionable pursuant to this chapter, in an amount of $1,000,000 or more.
Except as otherwise provided in subsection 2, a financial planner shall maintain insurance covering liability for errors or omissions, or a surety bond to compensate clients for - 81st Session (2021) – 9 – losses actionable pursuant to this chapter, in an amount of $1,000,000 or more.
- *SB9_R1* – 9 – (a) A broker-dealer or sales representative licensed pursuant to NRS 90.310 or exempt under NRS 90.320;
(a) A broker-dealer or sales representative licensed pursuant to NRS(b) An investment adviser licensed pursuant to NRS 90.330 or exempt under NRS 90.340 [.] or section 4 of this act.
or (b) An investment adviser licensed pursuant to NRS 90.330 or exempt under NRS 90.340 [.] or section 4 of this act.
A financial planner who, on behalf of a viator and for a fee, commission or other valuable consideration not paid by a provider or purchaser of viatical settlements, offers or attempts to negotiate a viatical settlement between the viator and one or more providers or brokers of viatical settlements must be licensed as an insurance consultant pursuant to NRS 683C.020.
A financial planner who, on behalf of a viator by a provider or purchaser of viatical settlements, offers or attempts to negotiate a viatical settlement between the viator and one or more providers or brokers of viatical settlements must be licensed as an insurance consultant pursuant to NRS 683C.020.
(d) An investment adviser licensed pursuant to NRS 90.330 or exempt under NRS 90.340 [;] or section 4 of this act;
- 81st Session (2021) – 10 – exempt under NRS 90.340 [;] or section 4 of this act;
or (e) A producer of insurance licensed pursuant to chapter 683A of NRS or an insurance consultant licensed pursuant to chapter 683C of NRS, - *SB9_R1* – 10 – whose advice upon investment or provision of future income is incidental to the practice of his or her profession or business.
or.330 or (e) A producer of insurance licensed pursuant to chapter 683A of NRS or an insurance consultant licensed pursuant to chapter 683C of NRS, whose advice upon investment or provision of future income is incidental to the practice of his or her profession or business.
do not apply to any provision of this act which adds or revises a requirement to submit a report to the Legislature.
11.5.
The provisions of subsection 1 of NRS 218D.380 do not apply to any provision of this act which adds or revises a requirement to submit a report to the Legislature.
Sec.
H - *SB9_R1*
~~~~~ 21 - 81st Session (2021)
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Amendments

1 amendment

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Action History

  1. Chapter 60.

  2. Approved by the Governor.

  3. Enrolled and delivered to Governor.

  4. In Senate. Assembly Amendment No. 501 concurred in. To enrollment.

  5. Read third time. Passed, as amended. Title approved, as amended. (Yeas: 38, Nays: 4.) To Senate.

  6. From printer. To engrossment. Engrossed. First reprint.

  7. Read second time. Amended. (Amend. No. 501.) To printer.

  8. From committee: Amend, and do pass as amended.

  9. In Assembly. Read first time. Referred to Committee on Judiciary. To committee.

  10. Read third time. Passed. Title approved. (Yeas: 21, Nays: None.) To Assembly.

  11. From committee: Do pass.

  12. Notice of eligibility for exemption. Read second time. Taken from General File. Re-referred to Committee on Finance. To committee. Exemption effective.

  13. From committee: Do pass.

  14. Read first time. To committee.

  15. From printer.

  16. Prefiled. Referred to Committee on Judiciary. To printer.

Sponsors

  • Senate Committee on Judiciary · Primary

Sponsorship breakdown

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1 sponsors · 0 co-sponsors · 66 not signed on

Sponsors (1)

  • Senate Committee on Judiciary

Co-sponsors (0)

None.

Not signed on (66)

66 members have not signed on to this bill.

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"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Subjects

finance
Cross-referencing the record. Reading this bill against every other bill in the corpus by meaning, not keywords. Only the first open is slow. It’s instant for you after this. Matching · Ranking · Engrossing

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SB 9 is sponsored by Senate Committee on Judiciary.
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This bill has been enacted into law. Introduced November 18, 2020. Enacted.
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