Yesterday, the staffs of the North American Securities Administrators Association (NASAA) and the Securities and Exchange Commission (SEC) issued a statement describing the "opportunity zone" program created by the Tax Cuts and Jobs Act.  The intent of the program is to use tax incentives to incentivize capital investment and economic development in the designated economically depressed areas.  A qualified opportunity fund, or QOF, is “any investment vehicle which is organized as a corporation or a partnership for the purpose of investing in qualified opportunity zone property.”

The NASAA/SEC statement expectedly focus on the application of federal and state securities laws to QOFs.  Notably, the staffs point out:

"Interests in a QOF offered and sold to investors will typically constitute securities within the meaning of federal and state laws except in limited circumstances (such as a QOF established and operated as a general partnership where each partner has a substantial role in its management)."

The statement also discusses broker, investment adviser and investment company registration requirements.