US regulators have released an explanation of application to the federal and state securities laws for opportunity zone investments.
The Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA) have released the advice to improve compliance understandings.
The ‘opportunity zone’ program was created by the Tax Cuts and Jobs act in December 2017 as a way of offering tax incentives for long-term investing in designated economically distressed communities.
By releasing a summary, the regulators are hoping participants will better understand compliance implications for qualified opportunity funds under the federal and state securities laws.
Its advice can be found on both the SEC and NASAA websites and offer explanations on topics like what the qualified opportunity zones (QOZ), when interests in qualified opportunity funds become securities, registration of security offerings with the SEC, broker-deal registration requirements, and registration and exemptions.
The summary also gives an overview of the SEC and state requirements of qualified opportunity funds (QOF) and any considerations for advisors to a QOF.
NASAA president and Vermont’s commissioner of financial regulation Michael Pieciak said, “This new program provides an opportunity to strengthen investments in low-income communities and rural areas that traditionally struggled to attract the capital necessary to spur economic growth and job creation.
“This joint summary is a good example of state and federal regulators working collaboratively to address new compliance issues raised by an innovative program and thereby promoting our dual mission of protecting investors and helping facilitate capital formation.”
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