1. (a) Definitions. For purposes of this regulation, the following definitions shall apply:

   1. (1) “3(c)(1) fund” means a qualifying private fund that is eligible for the exclusion from the definition of an investment company under section 3(c)(1) of the 1940 Act, [15 U.S.C. §80a-3(c)(1)].
   2. (2) "Private fund adviser" means an investment adviser who provides advice solely to one or more qualifying private funds.
   3. (3) "Qualifying private fund" means a private fund that meets the definition of a qualifying private fund in SEC Rule 203(m)-1 under the Advisers Act [17 C.F.R. §275.203(m)-1].
2. (4) “Value of primary residence” means the fair market value of a person’s primary residence, subtracted by the amount of debt secured by the property up to its fair market value.
3. (5) “Venture capital fund” means a private fund that meets the definition of a venture capital fund in Rule 203(l)-1 under the Advisers Act, [17 C.F.R. §275.203(l)-1].
4. (b) Exemption for private fund advisers. Subject to the additional requirements of (c) of this Section, a private fund adviser shall be exempt from the registration requirements of Section 1-403 of the Securities Act if the private fund adviser satisfies each of the following conditions:
5. (1) neither the private fund adviser nor any of its advisory affiliates are subject to an event that would disqualify an issuer under Rule 506(d)(1) of Regulation D of the 1934 Act [17 C.F.R. §230.506(d)(1)];
6. (2) the private fund adviser files with the state each report and amendment thereto that an exempt reporting adviser is required to file with the SEC pursuant to Rule 204-4 of the Advisers Act [17 C.F.R. §275.204-4]; and
7. (3) the private fund adviser pays the fees specified in 1-612 of the Securities Act.
8. (c) Additional requirements for private fund advisers to certain 3(c)(1) funds. In order to qualify for the exemption described in (b) of this Section, a private fund adviser who advises at least one (3)(c)(1) fund that is not a venture capital fund shall, in addition to satisfying each of the conditions specified in (b)(1) through (b)(3) of this Section, comply with the following requirements:
9. (1) The private fund adviser shall advise only those 3(c)(1) funds (other than venture capital funds) whose outstanding securities (other than short-term paper) are beneficially owned entirely by persons who, after deducting the value of the primary residence from the person’s net worth, would each meet the definition of a qualified client in Rule 205-3 of the Advisers Act, [17 C.F.R. §275.205-3], at the time the securities are purchased from the issuer;
10. (2) At the time of purchase, the private fund adviser shall disclose the following in writing to each beneficial owner of a 3(c)(1) fund that is not a venture capital fund:
11. (A) all services, if any, to be provided to individual beneficial owners;
12. (B) all duties, if any, the investment adviser owes to the beneficial owners; and
13. (C) any other material information affecting the rights or responsibilities of the beneficial owners.
14. (3) The private fund adviser shall obtain on an annual basis audited financial statements of each 3(c)(1) fund that is not a venture capital fund and shall deliver a copy of such audited financial statements to each beneficial owner of the fund.
15. (d) Federal covered investment advisers. If a private fund adviser is registered with the SEC, the adviser shall not be eligible for this exemption and shall comply with the state notice filing requirements applicable to federal covered investment advisers in Section 1-405 of the Securities Act.
16. (e) Investment adviser representatives. A person is exempt from the registration requirements of Section 1-404 of the Securities Act if he or she is employed by or associated with an investment adviser that is exempt from registration in this state pursuant to this rule and does not otherwise act as an investment adviser representative.
17. (f) Electronic filing. The report filings described in paragraph (b)(2) above shall be made electronically through the IARD. A report shall be deemed filed when the report and the fee required by Section 1-612(A)(5) of the Securities Act are filed and accepted by the IARD on the state's behalf.
18. (g) Transition. An investment adviser who becomes ineligible for the exemption provided by this Section must comply with all applicable laws and rules requiring registration or notice filing within ninety (90) days from the date the investment adviser’s eligibility for this exemption ceases.
19. (h) Waiver Authority with Respect to Statutory Disqualification. Paragraph (b)(1) of this Section shall not apply upon a showing of good cause and without prejudice to any other action of the Administrator, if the Administrator determines that it is not necessary under the circumstances that an exemption be denied.
20. (i) Grandfathering for investment advisers to 3(c)(1) funds with non-qualified clients. An investment adviser to a 3(c)(1) fund (other than a venture capital fund) that has one or more beneficial owners who are not qualified clients as described in (c)(1) of this Section is eligible for the exemption contained in (b) of this Section if the following conditions are satisfied:
21. (1) the subject fund existed prior to the effective date of this Section;
22. (2) as of the effective date of this Section, the subject fund ceases to accept beneficial

owners who are not qualified clients, as described in (c)(1) of this Section;

1. (3) the investment adviser discloses in writing the information described in (c)(2) of this Section to all beneficial owners of the fund; and
2. (4) as of the effective date of this Section, the investment adviser delivers audited financial statements as required by (c)(3) of this Section.

Added at 30 Ok Reg 2066, eff 8-1-13

Amended at 42 Ok Reg, Number 20, effective 8-15-25