As used in this subpart:

1. (1) “Private investment company” means any privately held legal entity except a natural person which holds or applies for a license, or owns, directly or indirectly, a beneficial interest in any corporation, firm, partnership, limited partnership, limited liability company, trust, or other form of business organization which holds or applies for a license, and which has the following characteristics:

   1. (A) One hundred percent (100%) of the economic securities of the company are held, directly or indirectly, by one (1) or more:

      1. (i) Investment funds that are managed by an investment manager or managers, which investment manager or managers collectively have more than one billion dollars ($1,000,000,000) in assets under management; or
      2. (ii) Institutional investors as defined in this part that each have assets of more than one billion dollars ($1,000,000,000);
   2. (B) One hundred percent (100%) of the voting securities of the company are held by one (1) or more legal entities that are controlled by one (1) or more controlling persons or key executives of the investment managers or institutional investors; and

   3. (C)

      1. (i) The company is not a publicly traded corporation or has received Arkansas Racing Commission approval to convert its registration from a publicly traded corporation to a private investment company.
      2. (ii) The commission may waive or modify one (1) or more of the characteristics above for reasons consistent with this part;
2. (2) “Affiliate” or “affiliated company” means a subsidiary company, holding company, intermediate company, or any other form of business organization that controls, is controlled by, or is under common control with a private investment company;
3. (3) “Control”, when used as a noun, means the possession, direct or indirect, of the power to direct or cause the direction of management and policies of a person, and when used as a verb means to possess, directly or indirectly, such power;
4. (4) “Controlling person” means, with respect to a private investment company, each person who controls the private investment company;

5. (5) “Economic security” means a nonvoting interest which entitles the holder to the economic benefits, without the right to control or vote, of:

   1. (A) A corporation;
   2. (B) A firm;
   3. (C) A partnership;
   4. (D) A limited partnership;
   5. (E) A limited liability company;
   6. (F) A trust; or
   7. (G) Other form of business organization;

6. (6) “Holding company” defined.

   1. (A) “Holding company” means any corporation, firm, partnership, limited partnership, limited liability company, trust, or other form of business organization not a natural person which, directly or indirectly, owns, has the power or right to control, or holds with power to vote any part of the limited partnership interests, interests in a limited liability company, or outstanding voting securities of a private investment company.
   2. (B) For purposes of this section, in addition to any other reasonable meaning of the words used, a holding company indirectly has, holds, or owns any power, right, or security mentioned in subdivision (6)(A) of this section if it does so through any interest in a subsidiary or successive subsidiaries, however many such subsidiaries may intervene between the holding company and the private investment company;

7. (7) “Intermediary company” means any corporation, firm, partnership, limited partnership, limited liability company, trust, or other form of business organization other than a natural person which:

   1. (A) Is a holding company with respect to a private investment company; and
   2. (B) Is a subsidiary with respect to any holding company;
8. (8) “Key executive” means any person performing a principal business or policy making function for a business organization, as determined by the commission on a case-by-case basis;
9. (9) “Person” means any natural person, corporation, firm, partnership, limited partnership, limited liability company, trust, or other form of business organization, whether or not a legal entity;
10. (10) “Private investment fund” means a business entity exempted from registration under 15 U.S.C. § 80a-3(c);
11. (11) “Subsidiary” means any corporation, firm, partnership, limited partnership, limited liability company, trust, or other form of business organization not a natural person, any interest in which is owned, subject to a power or right of control, or held with power to vote by a holding company or intermediary company; and

12. (12) “Voting security” means an interest which entitles the holder to vote for the election of a member or members of the board of directors or board of trustees of a corporation or a comparable person or persons in the case of:

    1. (A) A partnership;
    2. (B) A limited liability company; or
    3. (C) Other form of business organization.