To what extent do securities laws apply and have compliance implications for a QOF manager? What about a fund manager that is an “investment adviser”?
You will need to consult with securities counsel on a case-by-case basis. Securities laws may implicate different federal or state regimes, depending on the nature of the QOF's investors. The securities consequences of fundraising for QOFs would be impossible to navigate without a qualified attorney. At minimum, if there will be any fundraising going on, a securities lawyer is a necessary party.
Yes, securities laws and exemptions thereto must be complied with. This is whether it is a state-exempt offering or a Reg D 506(b) or (c) offering, etc. A fund manager who is an investment adviser should know that compliance with securities laws exemptions is required and for the preparation of an offering document, subscription form, etc.
Securities laws will apply to a QOF to the same extent they apply to other funds. Please consult a securities attorney for an in-depth analysis.
All securities law apply.
If you are raising money from passive investors, you must register. This means get pre-approval of your offering from the appropriate securities agencies (federal, state, or both) or qualify for an exemption from registration. The exemptions each have a specific set of rules that you must follow that dictate things such as investor financial qualifications and whether you can advertise to the public, and whether a risk disclosure document, such as a private placement memorandum, is required. A qualified securities attorney can help you select an appropriate exemption based on who you think will invest with you and where they live, and they will file the appropriate securities notices on the fund's behalf. The managers will have to demonstrate how they complied with securities laws if they were ever audited by a securities agency or challenged by an investor’s counsel, which means there must have a record-keeping system to demonstrate how the manager has complied with the rules for the exemption. Certain business models that require a fund manager to make decisions about what the fund invests in may require that a registered investment advisor make such decisions, although that is not typically required for a specified offering where the funds are being raised for a specific real estate project and the investors are making their own decisions about whether or not to invest.
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