Neb. Admin. Code tit. 48 — Banking and Finance

Chapter 1 General Provisions

Neb. Admin. Code tit. 48, ch. 1 General Provisions {#sec-48-nac-1 omnilex-key=us-ne-regs-official--title-48--48 NAC 1}

001 GENERAL .

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Section 8-1120(3) of the Securities Act of Nebraska (“Act”).

001.02 The Department has determined that this Rule is consistent with investor protection and is in the public interest.

001.03 The Director may, on a case-by-case basis, and with prior written notice to the affected persons, require adherence to additional standards or policies, as deemed necessary in the public interest.

001.04 The definitions in 48 NAC 2 apply to the provisions of this Rule, unless otherwise specified.

002 ADMINISTRATION . The Securities Act of Nebraska is administered by the Director of Banking and Finance, Department of Banking and Finance, pursuant to Sections 8-1101 through 8-1123, R.R.S. 1943. The offices of the Department are open from the hours of 8 a.m. to 5 p.m., Monday through Friday, legal holidays excepted. The mailing address of the agency is Department of Banking and Finance, P.O. Box 95006, Lincoln, Nebraska 68509-5006.

003 PAYMENT OF FEES . All filing fees are payable by corporate check, money order, or ACH to the Nebraska Department of Banking and Finance or through a registration depository or electronic filing system recognized by the Director. Cash, personal checks, and checks drawn on non-United States banks will not be accepted.

004 RETENTION OF FEES UPON WITHDRAWAL OR DENIAL .

004.01 Upon withdrawal or denial of an application for registration as a broker-dealer, agent, investment adviser, investment adviser representative, or issuer-dealer, the entire fee shall be retained by the Department.

004.02 Upon withdrawal of a notice filing by a federal covered adviser, the entire fee shall be retained by the Department.

004.03 Upon withdrawal or denial of an application for registration of securities, one hundred dollars ($100.00) shall be retained by the Department.

004.04 Upon the withdrawal of a notice filing for federal covered securities, except securities issued by an investment company, the entire fee shall be retained by the Department.

004.05 Upon withdrawal of a notice filing by an investment company subject to the Investment Company Act of 1940, a fee of one hundred dollars ($100.00) shall be retained by the Department.

004.06 Upon the withdrawal or denial of an exemption notice, the entire fee shall be retained by the Department.

005 EFFECTIVE DATE OF FILING . A document is filed when it is received in the office of the Department with the appropriate fee, or when the filer makes a filing and pays the fees to an electronic system recognized by the Director. A document so filed cannot be returned.

History

Effective 2022-06-13

Chapter 2 Definitions

Neb. Admin. Code tit. 48, ch. 2 Definitions {#sec-48-nac-2 omnilex-key=us-ne-regs-official--title-48--48 NAC 2}

001 GENERAL .

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Section 8-1120(3) of the Securities Act of Nebraska (“Act”).

001.02 The Department has determined that this Rule relating to definitions be applied to Title 48 of the Nebraska Administrative Code, unless otherwise specified therein. This Rule is consistent with investor protection and is in the public interest.

002 DEFINITIONS . The following words and terms have the meanings set forth below unless the context clearly indicates otherwise.

002.01 Affiliate means a person who, directly or indirectly, controls, is controlled by, or is under common control with a person as defined herein.

002.02 Control means the power to direct or influence the direction of the management or policies of a person, directly or indirectly, through the ownership of voting securities, by contract or otherwise. A presumption of control exists for any person who

002.02A Is a director, general partner, member, manager, or officer exercising executive responsibility (or has similar status or function);

002.02B Has the right to vote twenty percent or more of a class of voting securities; or

002.02C In the case of a partnership or limited liability company, has contributed or has the right upon dissolution twenty percent or more of the capital.

002.03 Department means the Department of Banking and Finance.

002.04 Director means the Director of Banking and Finance of the State of Nebraska, unless otherwise specified.

002.05 Equity securities include shares of common stock or similar securities, convertible securities, warrants and options or rights that may be converted into or exercised to purchase, shares of common stock or similar securities.

002.06 Person means an individual, a corporation, a limited liability company, a partnership, an association, a joint-stock company, a trust in which the interests of the beneficiaries are evidenced by a security, an unincorporated organization, a government, or a political subdivision of a government.

002.07 Promoter includes:

002.07A A person who, alone or in conjunction with one or more persons, directly or indirectly, took the initiative in founding or organizing the issuer or controls the issuer;

002.07B A person who, directly or indirectly, receives, as consideration for property or for services rendered, five percent or more of any class of the issuer’s equity securities or five percent or more of the proceeds from the sale of any class of the issuer’s equity securities; or

002.07C A person who:

002.07C1 Is an officer or director of the issuer;

002.07C2 Is the legal or beneficial owner, directly or indirectly, of five percent or more of any class of the issuer’s equity securities; or

002.07C3 Is an affiliate or an associate of a person specified in this subsection.

002.07D Promoter does not include:

002.07D1 A person who receives securities or proceeds solely as underwriting compensation unless that person otherwise comes within the definition of Section 002.7, above; or

002.07D2 An unaffiliated institutional investor, who purchased the issuer’s equity securities more than one year prior to the filing date of the issuer’s registration statement. An unaffiliated institutional investor, who purchased the issuer’s equity securities on an arm’s-length basis within one year prior to the filing date of the issuer’s registration statement may, at the Director’s discretion, be excluded from the definition of promoter.

History

Effective 2019-11-27

Chapter 3 Definition of an Offer

Neb. Admin. Code tit. 48, ch. 3 Definition of an Offer {#sec-48-nac-3 omnilex-key=us-ne-regs-official--title-48--48 NAC 3}

001 GENERAL .

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Section 8-1120(3) of the Securities Act of Nebraska(“Act”).

001.02 The Department has determined that this Rule relating to the definition of an offer is consistent with investor protection and is in the public interest.

001.04 The definitions in 48 NAC 2 apply to the provisions of this Rule, unless otherwise specified.

001.05 Federal statutes and rules of the Securities and Exchange Commission (“SEC”) or the Financial Industry Regulatory Authority (“FINRA”) referenced herein shall mean those statutes and rules as amended on or before the effective date of this Rule. A copy of the statutes or rules referenced in this Rule is available as an appendix to this rule at https://ndbf.nebraska.gov/about/legal/administrative-rules-and-regulations

002 OFFERINGS REGISTERED IN NEBRASKA . For the purposes of Section 8-1101(13) of the Act, the term “offer” does not include the circulation of a preliminary offering document provided.

002.01 The document is circulated by a broker-dealer registered in Nebraska;

002.02 The document is filed with the Director as part of an application to register the securities by qualification prior to its circulation.

002.03 The preliminary offering document is in the form of a prospectus which contains substantially the information required to be included in a prospectus meeting the requirements of Section 8-1107 of the Act for the securities being registered by qualification; and

002.04 The outside front page of the document bears in red ink, the caption “Preliminary Offering Document,” the date of its issuance, and the following statement printed in bold type:

“A REGISTRATION STATEMENT RELATINGTO THESE SECURITIES HAS BEEN FILED WITH THE DIRECTOR OF THE DEPARTMENT OF BANKING AND FINANCE OF THE STATE OF NEBRASKA, BUT HAS NOT YET BECOME EFFECTIVE. INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PRELIMINARY DOCUMENT SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY; NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN NEBRASKA SINCE SUCH OFFER, SOLICITATION, OR SALE WOULD BE UNLAWFUL PRIOR TO QUALIFICATION UNDER SECTION 8-1107 OF THE SECURITIES ACT OF NEBRASKA.”

003 OFFERINGS OF FEDERAL COVERED SECURITIES . For purposes of Section 8-1101(13) of the Act, the term “offer” does not include the circulation of a preliminary offering document for a federal covered security provided:

003.01 The document complies with the provisions of Regulation S-K, 17 CFR Part 229; and

003.02 The document is circulated by a broker-dealer registered in Nebraska or by an issuer exempt from such registration pursuant to Section 8-1101(2)(b).

History

Effective 2022-06-13

Chapter 4 Broker-Dealers

Neb. Admin. Code tit. 48, ch. 4 Broker-Dealers {#sec-48-nac-4 omnilex-key=us-ne-regs-official--title-48--48 NAC 4}

001 GENERAL .

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Section 8-1120 of the Securities Act of Nebraska (“Act”).

001.02 The Department has determined that this Rule relating to broker-dealers is consistent with investor protection and is in the public interest.

001.04 The definitions in 48 NAC 2 apply to the provisions of this Rule, unless otherwise specified.

001.05 Federal statutes and rules of the Securities and Exchange Commission (“SEC”) or the Financial Industry Regulatory Authority (“FINRA”) referenced herein means those statutes and rules as amended on or before the effective date of this Rule. A copy of the statutes or rules referenced in this Rule is available as an appendix to this rule at https://ndbf.nebraska.gov/about/legal/administrative-rules-and-regulations

002 APPLICATION . The application for initial registration as a broker-dealer pursuant to Section 8-1103(1) of the Act shall be filed as directed in Section 007, below, and contain the following:

002.01 A copy of Uniform Application for Broker-Dealer Registration (“Form BD”), together with all applicable schedules and exhibits specified therein, complete, accurate and current;

002.02 A completed “Affidavit of Broker-Dealer Activity in Nebraska”;

002.03 The financial statements prepared in accordance with Section 003, below;

002.04 A fee in the amount of two hundred fifty dollars ($250.00); and

002.05 Any other information the Director may require.

002.06 A broker-dealer which is not a member of the Financial Industry Regulatory Authority (“FINRA”) shall submit the following additional information for an initial application for registration as a broker-dealer pursuant to the Act:

002.06A A signed Form BD;

002.06B A current and correct copy of the firm’s articles of incorporation, partnership, or organization, and any amendments thereto, if applicable; and

002.06C A corporate resolution, Form U-2A, if applicable.

003 FINANCIAL STATEMENTS . The financial statements shall be:

003.01 A copy of the firm’s most recent audited financial statements, and, if the date of the financial statements is not within ninety days of the date the application is filed, the firm’s most recent quarterly Focus Report Part II(A), if such report has been filed with FINRA; or

003.02 In the event that the firm does not have audited financial statements, the Director may accept unaudited financial statements that are accompanied by an affirmative representation by the firm, signed by an officer, director or person occupying a similar position, that the statements provide all material information relating to the financial condition of the firm and are true and accurate to the best of the signer’s knowledge and belief.

004 RENEWAL . All broker-dealer registrations automatically expire annually on December 31. All broker-dealer registrations must be renewed on or prior to that date.

005 AMENDMENT AND CORRECTION OF DOCUMENTS . If a material change in operations occurs, or if the information contained in any document filed with the Director is or becomes inaccurate or incomplete in any material respect, the broker-dealer shall file a correcting amendment on Form BD within the time period specified in the instructions to that form relating to filings made with the SEC.

006 WITHDRAWAL . A broker-dealer desiring to withdraw its registration as a broker-dealer pursuant to Section 8-1103(10)(c) of the Act shall file a Notice of Withdrawal from Registration as a Broker-Dealer (“Form BDW”), with the Director or with a registration depository system designated by the Director.

007 FORMS SUBMISSIONS .

007.01 A broker-dealer which is a member of FINRA shall file the forms necessary for registration, renewal or withdrawal of its registration or the registration or termination of its agents in Nebraska with, and pay all applicable fees for such registrations through, the Central Registration Depository/Investment Advisor Registration Depository System (“CRD/IARD”). For purposes of Section 8-1103(4) of the Act, a form submitted through CRD/IARD is deemed filed with the Department when the record is transmitted to the Department for review.

007.02 A broker-dealer which is not a member of FINRA shall file the forms necessary for registration, renewal, or withdrawal of its registration or the registration or termination of its agents in Nebraska directly with the Department.

007.03 With respect to any document filed electronically through CRD/IARD, when a signature or signatures are required by the particular instructions of any filing to be made through CRD/IARD, a duly authorized officer of the applicant or the applicant him or herself, as required, shall affix his or her electronic signature to the filing by typing his or her name in the appropriate fields and submitting the filing to CRD/IARD. Submission of a filing in this manner constitutes irrefutable evidence of legal signature by any individual whose name is typed on the filing.

008 SUPERVISORS AND COMPLIANCE PRINCIPALS .

008.01 A broker-dealer, which is not a member of FINRA, shall designate in writing a compliance principal and conform with this section during all registration periods.

008.01A The compliance principal will be responsible for supervising the compliance of the broker-dealer and its registered agents and other associated persons with the Act and the rules and regulations promulgated thereunder.

008.01B If the designated compliance principal ceases to act in that capacity, the broker-dealer must designate in writing a qualified replacement principal within sixty days after such change has occurred.

008.01C Failure to designate a compliance principal constitutes grounds for denial or suspension of a broker-dealer registration.

008.01D The designated compliance principal for Nebraska shall be registered as an agent of the broker-dealer in Nebraska and have taken and passed a qualifying examination, as set forth below:

008.01D1 The examinations required by FINRA pursuant to FINRA Rule 1220;

008.01D2 The Uniform Securities Agent State Law Examination (Series 63) or the Uniform Combined State Law Examination (Series 66); and

008.01D3 One of the following examinations:

008.01D3a The General Securities Principal Examination (Series 24 examination);

008.01D3b The Investment Company Products Principal Examination (Series 26 examination), if the broker-dealer’s registration is or will be limited to investment company products;

008.01D3c The Direct Participation Programs Principal Examination (Series 39 examination) if the broker-dealer’s registration is or will be limited to direct participation programs; or

008.01D3d The General Securities Representative Examination (Series 7 examination), if the broker-dealer’s registration is or will be limited to:

008.01D3d(i) Securities of one issuer or associated issuers (other than mutual funds),

008.01D3d(ii) Interests in mortgages or other receivables, or

008.01D3d(iii) Securities of non-profit organizations, provided that the Director may waive the requirement of this section for principals of a broker-dealer whose registration is limited to securities of non-profit organizations if the Director finds the waiver is consistent with investor protection and is in the public interest.

008.02 Every registered broker-dealer must designate at least one registered agent located at its principal office, and one registered agent located at each office of supervisory jurisdiction (“OSJ”) that is located in this state to act in a supervisory capacity.

008.02A Such supervisor shall have taken and passed the appropriate supervisory examination administered by FINRA.

008.02B For any office located in this state not designated as an OSJ, the broker-dealer must designate a supervisor for the office. The designated supervisor need not be located in this state, but must be registered in this state as an agent and have taken and passed the appropriate supervisory examination administered by FINRA.

008.02C For purposes of this subsection “office of supervisory jurisdiction” means any office of a broker-dealer at which any one or more of the following functions take place:

008.02C1 Order execution or market making;

008.02C2 Structuring of public offerings or private placements;

008.02C3 Maintaining custody of customers’ funds or securities;

008.02C4 Final acceptance (approval) of new accounts on behalf of the member;

008.02C5 Review and endorsement of customer orders;

008.02C6 Final approval of retail communications for use by persons associated with the broker-dealer, except for an office that solely conducts final approval of research reports; or

008.02C7 Responsibility for supervising the activities of persons associated with the broker-dealer located at one or more other offices of the broker-dealer.

009 SUPERVISION . A broker-dealer is ultimately responsible for the acts of its agents and other associated persons and must maintain reasonable supervision and control at all times.

010 CLEARING BROKER-DEALER REGISTRATION . If a broker-dealer utilizes a clearing broker-dealer to clear trades with Nebraska customers, the clearing broker-dealer must be registered in Nebraska.

011 BOOKS AND RECORDS . Unless otherwise provided by order of the SEC, all broker-dealers registered or required to be registered under the Act shall make, maintain and preserve books and records in compliance with SEC Rules 17a-3 (17 C.F.R. 240.17a-3), 17a-4 (17 C.F.R. 240.17a-4), and 15c3-3(17 C.F.R. 240.15c3-3).

012 MINIMUM FINANCIAL REQUIREMENTS AND FINANCIAL REPORTING REQUIREMENTS .

012.01 Each broker-dealer which is a member of FINRA registered or required to be registered under the Act shall:

012.01A Comply with the financial requirements established in SEC Rules 15c3-1 (17 C.F.R. 240.15c3-1), and 15c3-3 (17 C.F.R. 240.15c3-3), and

012.01B Comply with the financial reporting requirements established in SEC Rule 17a-11 (17 C.F.R. 240.17a-11) and provide copies of notices and reports required by such SEC Rules to the Director upon request.

012.02 Each broker-dealer which is not a member of FINRA registered or required to be registered under the Act shall:

012.02A Maintain a net capital of not less than twenty-five thousand dollars ($25,000.00).

012.02A1 A broker-dealer which has a net capital which is less than required by this Section shall submit a surety bond in the amount of twenty-five thousand dollars ($25,000.00) with its application.

012.02A2 Net capital means total assets minus total liabilities.

012.02B File with the Director audited financial statements showing the assets, liabilities and net capital of the broker-dealer within ninety days of the end of the broker-dealer’s fiscal year, which shall be:

012.02B1 Examined in accordance with generally accepted auditing standards and prepared in conformity with generally accepted accounting principles;

012.02B2 Audited by an independent public accountant or an independent certified public accountant; and

012.02B3 Accompanied by an opinion of the accountant as to the report of financial position, and by a note stating the principles used to prepare it, the basis of included securities, and any other explanations required for clarity.

013 REGISTRATION OF SUCCESSOR TO REGISTERED BROKER-DEALER . In the event that a broker-dealer succeeds to and continues the business of a broker-dealer registered pursuant to Section 8-1103 of the Act, the registration of the predecessor shall be deemed to remain effective as the registration of the successor if the successor, within thirty days after such succession, files an application for registration on Form BD, and the predecessor files a notice of withdrawal from registration on Form BDW.

013.01 The registration of the predecessor broker-dealer will cease to be effective as the registration of the successor broker-dealer forty-five days after the application for registration on Form BD is filed by such successor.

013.02 Notwithstanding any other provision of this Rule, if a broker-dealer succeeds to and continues the business of a registered broker-dealer, and the succession is based solely on a change in the predecessor’s date or state of incorporation, form of organization, or composition of a partnership, the successor may, within thirty days after the succession, amend the registration of the predecessor on Form BD to reflect these changes. This amendment is deemed an application for registration filed by the predecessor and adopted by the successor.

014 VERIFICATION OF IMMIGRATION STATUS . Every broker-dealer who registers agents to transact business in Nebraska must verify the citizenship and immigration status of each agent registered to transact business on its behalf in Nebraska and submit such verification to the Department.

014.01 For each agent identified as a qualified legal alien, the broker-dealer must submit a completed United States Citizenship Attestation Form, and a legible, current and unexpired copy of the front and back of one of the currently acceptable forms of documentation required by the Systematic Alien Verification for Entitlements Program and the Department of Homeland Security.

014.02 The broker-dealer shall maintain, as a required record, a copy of the completed United States Citizenship Attestation Form for each agent registered in Nebraska, regardless of citizenship or immigration status.

015 USING THE INTERNET FOR GENERAL DISSEMINATION OF INFORMATION ON PRODUCTS AND SERVICES . Broker-dealers shall not be deemed to be “transacting business” in this state for purposes of Section 8-1103 of the Act based solely on the use of the Internet, world wide web, and similar proprietary or common carrier electronic systems (hereinafter the “Internet”) to distribute information on available products and services through certain communications made on the Internet directed generally to anyone having access to the Internet, and transmitted through postings on bulletin boards, social networking sites, blogs or similar sites, displays on “Home Pages” or similar methods (hereinafter, “Internet Communications”) if the following conditions are observed:

015.01 The Internet Communications contain a disclosure statement in which it is clearly stated that:

015.01A The broker-dealer in question may only transact business in this state if first registered, excluded, or exempted from the broker-dealer registration requirements of the Act; and

015.01B The broker-dealer will not make follow-up, individualized responses to persons in this state, that involve either the effecting or attempting to effect transactions in securities, unless the broker-dealer has complied with, or has qualified for an applicable exemption or exclusion from, the broker-dealer registration requirements of the Act.

015.02 The Internet Communications contain a mechanism, including and without limitation, technical “firewalls” or other implemented policies and procedures, designed reasonably to ensure that prior to any subsequent, direct communication with prospective customers or clients in this state, said broker-dealer is first registered in this state or qualifies for an exemption or exclusion from such requirement.

015.02A Nothing in this paragraph shall be construed to relieve a broker-dealer from any applicable securities registration requirement in this state.

015.03 The Internet Communications do not involve either effecting or attempting to effect transactions in securities in this state over the Internet, but are limited to the dissemination of general information on products and services.

016 DISHONEST AND UNETHICAL BUSINESS PRACTICES .

016.01 The conduct set forth in 48 NAC 12.002 constitutes “an act, practice or course of business which operates, or would operate, as a fraud or deceit upon another person” by a broker-dealer for purposes of Section 8-1102(1)(c) of the Act.

016.02 The conduct set forth in 48 NAC 12.003 and 48 NAC 12.004 constitutes a “dishonest or unethical business practice” by a broker-dealer for purposes of Section 8-1103(9)(a)(vii) of the Act.

016.03 The delineation of certain acts and practices is not intended to be all inclusive. Acts or practices not enumerated in 48 NAC 12.002 and 48 NAC 12.003 may also be deemed fraudulent and dishonest.

History

Effective 2022-06-13

Chapter 5 Issuer-Dealers

Neb. Admin. Code tit. 48, ch. 5 Issuer-Dealers {#sec-48-nac-5 omnilex-key=us-ne-regs-official--title-48--48 NAC 5}

001 GENERAL .

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Section 8-1120 of the Securities Act of Nebraska (“Act”).

001.02 The Department has determined that this Rule relating to issuer-dealers is consistent with investor protection and is in the public interest.

001.04 The definitions in 48 NAC 2 apply to the provisions of this Rule, unless otherwise specified.

002 ELIGIBILITY . An issuer may be licensed to sell its own securities if the issuer is located in Nebraska, or if the issuer registers its securities by qualification and proposes to sell its securities in this state without the benefit of a registered broker-dealer.

003 APPLICATION . Applications for initial registration as an issuer-dealer shall be filed with the Director and consist of the following:

003.01 A signed copy of an Application for Registration as Issuer-Dealer (“Application”), together with all applicable schedules and exhibits specified therein complete, accurate and current.;

003.02 A copy of the issuer’s most recent financial statements, either audited or signed, under penalty of perjury, by an officer, director, trustee, general partner, or limited liability company managing member attesting that the statements are true and accurate to the best of the signer’s knowledge and belief;

003.03 A corporate surety bond in the amount of twenty-five thousand dollars ($25,000.00), if the issuer’s net capital is less than twenty-five thousand dollars ($25,000.00).

003.03A An issuer-dealer’s net worth is computed on the basis of total assets minus total liabilities.

003.03B An issuer-dealer may request a signature bond in lieu of the net worth or surety bond requirement and the Director may allow the issuer-dealer to post the signature bond, if the Director finds that the net worth or the surety bond requirement causes an undue burden upon the issuer-dealer.

003.04 A filing fee of one hundred dollars ($100.00) and

003.05 Any other information the Director may require.

004 QUALIFICATIONS .

004.01 The issuer-dealer shall be of good repute, knowledgeable of the Act, and meet the requirements of the Act and rules adopted thereunder.

004.02 The issuer-dealer shall not conduct a general securities business and shall not normally be engaged in the business of selling securities.

005 POST-REGISTRATION FILINGS . An issuer-dealer shall file quarterly reports with the Director indicating the amount of securities sold during the period.

006 RENEWAL . The issuer-dealer licensing period runs concurrently with the registration of said issuer-dealer’s securities in this state. An issuer-dealer’s registration may be renewed by filing the information specified in Section 003, above, before the expiration of its registration.

007 AMENDMENT . Whenever a material change in operations occurs or is discovered, a registered issuer-dealer shall promptly file an amendment to its Application with the Director. Material changes include, but are not limited to:

007.01 A change in the name or names under which business is conducted in Nebraska and the firm’s business address;

007.02 A change in the ownership, management or control of the firm;

007.03 A change in type of entity, general plan or character of its business, or method of operation;

007.04 Insolvency, dissolution, liquidation, receivership, bankruptcy, or a material adverse change or impairment of working capital, or non-compliance with the minimum net capital or bond requirements;

007.05 The termination of business; or

007.06 The filing of any of the following actions against the firm, a partner, limited liability company member, officer, or director of the firm, or any person in a similar position; or an agent:

007.06A A criminal charge alleging a misdemeanor involving a security or commodity or any aspect of the securities or commodities business, or any felony;

007.06B Any civil action in which a fraudulent, dishonest, or unethical act is alleged or any violation of a securities law is involved; or

007.06C The entry of an order or proceeding by any court or administrative agency against the firm denying, suspending, or revoking its license, or threatening to do so, or enjoining it from engaging in or continuing any conduct or practice in the securities business.

008 CORRECTION OF DOCUMENTS . If the information contained in any document filed with the Director is, or becomes, inaccurate or incomplete in any material respect, the issuer-dealer shall file a correcting amendment on the Application within thirty days of the date that information becomes inaccurate or incomplete.

009 AGENTS . Any person who is involved directly or indirectly in the sale of securities of the issuer-dealer must be licensed as an agent of the issuer-dealer by the Department.

009.01 An agent must have sufficient training and knowledge of the securities business, and must meet the requirements of the Act and this Rule.

009.02 Partners, officers, directors and managing members of an issuer-dealer may effect sales of securities of the issuer-dealer without registration as agents, provided two partners, officers, directors, or managing members shall have taken and passed either the Nebraska Securities Law Exam, administered by the Department, or a securities examination administered by the Financial Industry Regulatory Authority (“FINRA”), acceptable to the Director.

009.03 An application for initial registration as an agent of an issuer-dealer shall be filed with the Director and consists of the following:

009.03A A copy of a signed Application for Registration as Agent of Issuer-Dealer, together with all applicable schedules and exhibits specified therein, complete, accurate and current;

009.03B A filing fee of forty dollars ($40.00); and

009.03C Any other information the Director may require.

009.04 Agents are required to pass the Nebraska Securities Law Exam, unless the Director determines, in his or her discretion, that the nature of the offering indicates an examination administered by FINRA is appropriate.

009.04A The Nebraska Securities Law Exam will be administered by appointment and upon payment of an examination fee of five dollars ($5.00).

009.04B The Nebraska Securities Law Exam will be based upon the Act, rules adopted thereunder, and information contained in the prospectus and registration statement for the securities of the issuer-dealer.

009.05 Agent registration must be renewed annually on the anniversary date of the employing issuer-dealer’s registration.

009.06 An issuer-dealer shall notify the Director within ten days after the termination of any agent or principal.

010 DENIAL, SUSPENSION OR REVOCATION OF LICENSE .

010.01 An issuer-dealer’s license may be denied, suspended, or revoked if it, or any partner, limited liability company member, officer, or director of the issuer-dealer, or any person occupying a similar status or performing similar functions for the issuer-dealer, has engaged in violations of the Act or rules adopted thereunder, or has engaged in dishonest or unethical practices in the securities business.

010.02 An agent’s license may be denied, suspended, or revoked by the Director if the agent has engaged in violations of the Act, or rules adopted thereunder, or otherwise engaged in dishonest or unethical practices in the securities business.

011 ADVERTISING RESTRICTION . No advertising may be used in connection with the sale of securities by the issuer-dealer or agent, unless the advertising material has received the prior approval of the Director.

012 SUITABILITY .

012.01 No issuer-dealer or agent of an issuer-dealer may sell securities of the issuer-dealer unless he or she has reasonable grounds to believe that the investment is suitable for the investor, based upon the investor’s other securities holdings, and the investor’s financial situation and needs.

012.02 The issuer-dealer must keep written records which establish the basis for the issuer-dealer or agent’s determination that the securities of the issuer-dealer are suitable for each investor.

013 REGISTRATION REPRESENTATIONS . No issuer-dealer or agent shall make material representations to a prospective investor in connection with the sale of securities of the issuer-dealer that are not contained in the prospectus or registration statement which has been registered or filed as an exemption with the Department.

014 SALES LITERATURE . No sales literature, other than the prospectus which has been registered or filed as an exemption with the Department, may be used by the issuer-dealer or agent in connection with the sale of securities of the issuer-dealer.

015 SUPERVISION . An issuer-dealer is responsible for the acts of its agents and must maintain reasonable supervision and control over its employees.

016 DISHONEST AND UNETHICAL BUSINESS PRACTICES .

016.01 The conduct set forth in 48 NAC 12.002 l constitutes “an act, practice or course of business which operates, or would operate, as a fraud or deceit upon another person” by an issuer-dealer or its agent for purposes of Section 8-1102(1)(c) of the Act.

016.02 The conduct set forth in 48 NAC 12.003 constitutes “dishonest or unethical business practices” by an issuer-dealer or its agent for purposes of Section 8-1103(9)(a)(vii) of the Act.

016.03 The delineation of certain acts and practices is not intended to be all inclusive. Acts or practices not enumerated in 48 NAC 12.002 may also be deemed fraudulent and dishonest.

017 VERIFICATION OF IMMIGRATION STATUS . Every issuer-dealer who registers issuer-dealer agents to transact business in Nebraska must verify the citizenship or immigration status of each issuer-dealer agent registered to transact business on its behalf in Nebraska and submit such verification to the Department.

017.01 For each issuer-dealer agent identified as a qualified legal alien, the issuer-dealer must submit a completed United States Citizenship Attestation Form, and one of the currently acceptable forms of documentation required by the Systematic Alien Verification for Entitlements Program and the Department of Homeland Security.

017.02 The issuer-dealer shall maintain, as a required record, a copy of the completed United States Citizenship Attestation Form for each issuer-dealer agent registered in Nebraska, regardless of citizenship or immigration status. Such records shall be maintained for a period of five years.

History

Effective 2019-11-27

Chapter 6 Agents of Broker-Dealers

Neb. Admin. Code tit. 48, ch. 6 Agents of Broker-Dealers {#sec-48-nac-6 omnilex-key=us-ne-regs-official--title-48--48 NAC 6}

001 GENERAL .

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Section 8-1120 of the Securities Act of Nebraska (“Act”).

001.02 The Department has determined that this Rule relating to agents of broker-dealers is consistent with investor protection and is in the public interest.

001.04 The definitions in 48 NAC 2 apply to the provisions of this Rule, unless otherwise specified.

001.05 Federal statutes and rules of the Securities and Exchange Commission (“SEC”) and of the Financial Industry Regulatory Authority (“FINRA”) referenced herein means those statutes and rules as amended on or before the effective date of this Rule. A copy of the statutes or rules referenced in this Rule is available as an appendix to this rule at www.ndbf.nebraska.gov.

002 REGISTRATION . An agent may be registered to transact business in Nebraska if he or she complies with the Act and the rules promulgated thereunder.

003 CENTRAL REGISTRATION DEPOSITORY . The Department utilizes the Central Registration Depository/Investment Advisor Registration Depository (“CRD/IARD”) to register agents, and to terminate, renew, and transfer agent registrations.

004 APPLICATION . An agent’s application for registration must be submitted to the Director by the employing broker-dealer.

004.01 Broker-dealers that are affiliated with the Financial Industry Regulatory Authority (“FINRA broker-dealers”) must submit a Uniform Application for Securities Industry Registration or Transfer (“Form U4”) and application fee of forty dollars ($40.00) to the Director through CRD/IARD. For purposes of Section 8-1103(4)(a) of the Act, a form submitted through CRD/IARD is deemed filed with the Director when the record is transmitted to the Director for review.

004.02 Broker-dealers that are not affiliated with FINRA (“non-FINRA broker-dealers”) must submit the agent’s Form U4 and application fee of forty dollars ($40.00) directly to the Director.

005 RENEWAL . An agent’s registration must be renewed annually by the employing broker-dealer prior to the broker-dealer’s December 31 renewal date.

005.01 FINRA broker-dealers must submit the agent’s renewal fee to the Director through CRD/IARD.

005.02 Non-FINRA broker-dealers must submit the agent’s renewal fee directly to the Director.

006 TERMINATION . To terminate an agent’s registration under the Act, a Uniform Termination Notice For Securities Industry Registration (“Form U5”) must be submitted by the former employing broker-dealer within thirty days after the agent’s termination.

006.01 FINRA broker-dealers must submit the agent’s Form U5 to the Director through the CRD/IARD system.

006.02 Non-FINRA broker-dealers must submit the agent’s Form U5 directly to the Director.

007 DUAL AND MULTIPLE REGISTRATION . Dual and multiple registration is prohibited in Nebraska except when an agent is in the process of transferring his or her registration or when the broker-dealers involved are affiliates.

007.01 Dual registration pending transfer is permitted only if the following conditions are satisfied:

007.01A The agent’s new broker-dealer notifies the Director about the transfer within seven days after the agent’s termination with his or her former broker-dealer.

007.01B The agent’s new broker-dealer submits the agent’s Form U4 to the Director within twenty-one days after the notice of termination has been submitted.

007.01C The agent does not have a disciplinary history that must be disclosed on Form U4.

007.02 An agent can be registered with more than one broker-dealer if the broker-dealers involved are affiliates.

007.02A Affiliate means a person who, directly or indirectly, controls, is controlled by, or is under common control with, another person.

007.02B For purposes of this section, control is defined as ownership, directly or beneficially, of eighty percent or more of the outstanding voting securities of another company.

008 QUALIFYING EXAMINATIONS . Every applicant for registration of an agent shall have passed, unless covered by subsections 008.03 through 008.05 below, within two years of the date of application:

008.01 The Uniform Securities Agent State Law Examination (Series 63 examination)or the Uniform Combined State Law Examination (Series 66); and

008.02 The examinations required by FINRA pursuant to FINRA Rule 1220.

008.03 Any individual who has been registered as an agent in any state within two years from the date of filing an application for registration shall not be required to retake the examinations in subsections 008.01 and 008.02 to be eligible for registration.

008.04 Any individual who is not registered as an agent in any state for more than two years but less than five years, who has elected to participate in the FINRA Maintaining Qualifications Program pursuant to FINRA Rule 1240(c), and whose appropriate FINRA qualifying examinations remain valid pursuant to effective participation in the MQP program shall be deemed in compliance with the examination requirements of subsections 008.01 and 008.02 as long as the individual elects to participate in the North American Securities Administrators Association’s Examination Validity Extension Program within two years of agent registration termination.

008.05 Any individual who has not been registered as an agent in any state for more than two years but less than five years, who has elected to participate in the FINRA Maintaining Qualifications Program pursuant to FINRA Rule 1240(c), and whose appropriate FINRA qualifying examinations remain valid pursuant to effective participation in the FINRA Maintaining Qualifications Program shall be deemed in compliance with the examination requirements of subsections 008.01 and 008.02.

008.06 Successful participation in the FINRA Maintaining Qualifications Program shall not extend the Uniform Combined State Law Examination (Series 66) for purposes of investment adviser representative registration.

008.07 The Director may waive the requirement of this section if the Director finds the waiver is consistent with investor protection and is in the public interest.

009 CORRECTION OF DOCUMENTS . If the information contained in any document filed with the Director is or becomes inaccurate or incomplete in any material respect, the agent shall file a correcting amendment on Form U4 within the time period specified in the instructions to that form.

010 USING THE INTERNET FOR GENERAL DISSEMINATION OF INFORMATION ON PRODUCTS AND SERVICES . Agents shall not be deemed to be “transacting business” in this state for purposes of Section 8-1103 of the Act based solely on the use of the Internet, world wide web, and similar proprietary or common carrier electronic systems (hereinafter the “Internet”) to distribute information on available products and services through certain communications made on the Internet directed generally to anyone having access to the Internet, and transmitted through postings on bulletin boards, social networking sites, blogs or similar sites, displays on “Home Pages” or similar methods (hereinafter, “Internet Communications”) if the following conditions are observed:

010.01 The Internet Communications contain a disclosure statement which clearly states that:

010.01A The agent in question may only transact business in this state if first registered or excluded or exempted from the agent registration requirements of the Act; and

010.01B The agent will not make follow-up, individualized responses to persons in this state that involve either the effecting or attempting to effect transactions in securities, unless the agent has complied with, or has qualified for an applicable exemption or exclusion from, the agent registration requirements of the Act.

010.02 The Internet Communications contain a mechanism, including and without limitation, technical “firewalls” or other implemented policies and procedures, designed reasonably to ensure that prior to any subsequent, direct communication with prospective customers or clients in this state, said agent is first registered in this state or qualifies for an exemption or exclusion from such requirement.

010.02A Nothing in this paragraph shall be construed to relieve an agent from any applicable securities registration requirement in this state.

010.03 The Internet Communications do not involve either effecting or attempting to effect transactions in securities in this state over the Internet, but is limited to the dissemination of general information on products and services.

010.04 The Internet Communications meet the following requirements:

010.04A The affiliation with the broker-dealer of the agent is disclosed in a non-italicized font, of at least ten points, within the Internet Communications;

010.04B The broker-dealer with whom the agent is associated retains responsibility for reviewing and approving the content of any Internet Communications by the agent;

010.04C The broker-dealer with whom the agent is associated first authorizes the distribution of information on the particular products through the Internet Communications; and

010.04D In disseminating information through the Internet Communications, the agent acts within the scope of the authority granted by the broker-dealer.

011 DISHONEST AND UNETHICAL BUSINESS PRACTICES .

011.01 The conduct set forth in 48 NAC 12.002 constitutes “an act, practice or course of business which operates, or would operate, as a fraud or deceit upon another person” by an agent for purposes of Section 8-1102(1)(c) of the Act.

011.02 The conduct set forth in 48 NAC 12.003, 48 NAC 12.004 and 48 NAC 12.005 constitutes “dishonest or unethical business practices” by an agent for purposes of Section 8-1103(9)(a)(vii) of the Act.

011.03 The delineation of certain acts and practices is not intended to be all inclusive. Acts or practices not enumerated therein may also be deemed fraudulent and dishonest.

History

Effective 2024-09-18

Chapter 7 Investment Advisers

Neb. Admin. Code tit. 48, ch. 7 Investment Advisers {#sec-48-nac-7 omnilex-key=us-ne-regs-official--title-48--48 NAC 7}

001 GENERAL .

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Section 8-1120 of the Securities Act of Nebraska (“Act”).

001.02 The Department has determined that this Rule relating to investment advisers is consistent with investor protection and is in the public interest.

001.03 The Director may, on a case-by-case basis, and with prior written notice to the affected persons, require adherence to additional standards and policies, as deemed necessary in the public interest.

001.04 The definitions in 48 NAC 2 apply to the provisions of this Rule, unless otherwise specified.

001.05 Federal statutes and rules of the Securities and Exchange Commission (“SEC”), the Financial Industry Regulatory Authority (“FINRA”), or the Financial Accounting Standards Board (“FASB”) referenced herein means those statutes and rules as amended on or before the effective date of this Rule. A copy of the statutes or rules referenced in this Rule is available as an appendix to this rule at https://ndbf.nebraska.gov/about/legal/administrative-rules-and-regulations.

002 APPLICATION . The application for initial registration as an investment adviser pursuant to Section 8-1103 of the Act shall be filed as directed in Section 005, below, and contain the following information:

002.01 Uniform Application for Investment Adviser Registration, (“Form ADV”), together with all applicable schedules and exhibits specified therein, complete, accurate and current;

002.02 A current and correct copy of the firm’s articles of incorporation, partnership or organization, and any amendments thereto, if applicable;

002.03 A corporate resolution if applicable;

002.04 A completed “Affidavit of Investment Advisory Activity in Nebraska”;

002.05 Financial statements as required by Section 009, below;

002.06 Specimen contracts or agreements relating to Nebraska clients;

002.07 Form ADV, Part 2 for the firm, the brochure supplement for each investment adviser representative, and any other promotional or disclosure literature to be furnished or disseminated to any client or prospective client in Nebraska;

002.08 A fee in the amount of two hundred dollars ($200.00); and

002.09 Any other information the Director may require.

003 RENEWAL AND UPDATES .

003.01 An investment adviser’s registration automatically expires annually on December 31. An investment adviser’s registration must be renewed on or prior to that date.

003.02 An application for renewal of registration as an investment adviser pursuant to Section 8-1103 of the Act shall be filed annually as directed in Section 005, below, and contain the following information:

003.02A Financial statements as required by Section 009, below;

003.02B Specimen contracts or agreements relating to Nebraska clients;

003.02C A fee in the amount of two hundred dollars ($200.00); and

003.02D Any other information the Director may require.

003.03 An investment adviser shall amend Form ADV, Parts 1 and 2, including all applicable schedules and exhibits:

003.03A Annually within ninety days of the end of its fiscal year; and

003.03B Any time required by the instructions to Form ADV.

004 WITHDRAWAL . An application for withdrawal of registration as an investment adviser pursuant to Section 8-1103 of the Act shall be filed on Notice of Withdrawal from Registration as Investment Adviser, (“Form ADV-W”), as directed in Section 005, below.

005 FORMS SUBMISSION .

005.01 All investment adviser applications, amendments, and fees required to be filed with the Director pursuant to the rules promulgated under the Act, shall be filed electronically with, and transmitted to, the Central Registration Depository/Investment Adviser Registration Depository (“CRD/IARD”). All other documents required by this Rule shall be filed directly with the Director.

005.02 With respect to any document filed electronically through CRD/IARD, when a signature or signatures are required by the particular instructions of any filing to be made through CRD/IARD, a duly authorized officer of the applicant or the applicant him or herself, as required, shall affix his or her electronic signature to the filing by typing his or her name in the appropriate fields and submitting the filing to CRD/IARD. Submission of a filing in this manner constitutes irrefutable evidence of legal signature by any individual whose name is typed on the filing.

005.03 A form submitted through CRD/IARD is deemed filed with the Department when the record is transmitted to the Department for review.

006 SUPERVISION . An investment adviser is ultimately responsible for the acts of its investment adviser representatives and other associated persons and must maintain reasonable supervision and control over such persons at all times.

007 AMENDMENT AND CORRECTION OF DOCUMENTS . If a material change in operations occurs, or if the information contained in any document filed with the Director is or becomes inaccurate or incomplete in any material respect, the investment adviser shall promptly file a correcting amendment on the appropriate form within the time period specified in the instructions to that form. Such amendments and corrections shall be filed as directed in Section 005, above.

008 FINANCIAL REQUIREMENTS .

008.01 An investment adviser registered or required to be registered under the Act shall:

008.01A Maintain at all times a minimum net capital of twenty-five thousand dollars ($25,000.00); or

008.01B Post a surety bond on a form acceptable to the Director in the amount of twenty-five thousand dollars ($25,000.00).

008.02 Unless otherwise exempted, as a condition of the right to continue to transact business in this state, every investment adviser registered or required to be registered under the Act shall notify the Director if such investment adviser’s net capital is less than the minimum required by the close of business on the next business day. After transmitting such notice, the investment adviser shall file a report with the Director of its financial condition by the close of business on the next business day. The report shall include:

008.02A A trial balance of all ledger accounts;

008.02B A statement of all client funds or securities which are not segregated;

008.02C A computation of the aggregate amount of debit balances in the client ledger;

008.02D A statement as to the number of client accounts; and

008.02E Any other information the Director may require.

008.03 For purposes of this Section, net capital means total assets less total liabilities.

008.03A In determining net capital, the following items are not included as assets:

008.03A1 Prepaid expenses, except items properly classified as current assets under generally accepted accounting principles, deferred charges, goodwill, franchise rights, organizational expenses, patents, copyrights, marketing rights, unamortized debt discount and expense, and all other assets of intangible nature;

008.03A2 Home, home furnishings, automobile(s), and any other personal items not readily marketable in the case of an individual;

008.03A3 Advances or loans to stockholders or officers in the case of a corporation;

008.03A4 Advances or loans to partners in the case of a partnership; and

008.03A5 Advances or loans to members in the case of a limited liability company.

008.03B The Director may require that a current appraisal be submitted in order to establish the worth of any asset.

008.04 This Section does not apply to an investment adviser whose principal place of business is not located in this state, provided:

008.04A Such investment adviser is registered in the state in which its principal place of business is located; and

008.04B Such investment adviser is in compliance with the minimum financial requirements established by the state in which its principal place of business is located.

008.04C For purposes of this Section, principal place of business means the executive office of the investment adviser from which the officers, partners, or managers of the investment adviser direct, control, and coordinate the activities of the investment adviser.

009 FINANCIAL REPORTING REQUIREMENTS .

009.01 Every registered investment adviser who has custody of client funds or securities or who requires payment of advisory fees six months or more in advance and in excess of twelve hundred dollars ($1,200.00) per client, shall file with the Director audited financial statements showing at a minimum the assets, liabilities and net capital of the investment adviser as of the end of the investment adviser’s fiscal year. This requirement does not apply to an investment adviser having custody solely as a consequence of its authority to make withdrawals from client accounts to pay its advisory fee and who complies with the safekeeping requirements in subsections 012.02C2 through 012.02C4, below.

009.01A The financial statements must be:

009.01A1 Examined in accordance with generally accepted auditing standards and prepared in conformity with generally accepted accounting principles;

009.01A2 Audited by an independent public accountant or an independent certified public accountant; and

009.01A3 Accompanied by an opinion of the accountant as to the report of financial position, and by a note stating the principles used to prepare it, the basis of included securities, and any other explanations required for clarity.

009.01B If the date of the audited financial statements is not within ninety days of the date of the initial application or the expiration of the current registration, the investment adviser must also submit a financial statement showing at a minimum the assets, liabilities and net capital of the investment adviser as of a date within ninety days of the date of the initial application or within ninety days of the expiration of the current registration, as the case may be, and signed by an officer, director, partner or member, of the investment adviser, or by the person who prepared the statement, attesting that the statement is true and accurate.

009.02 All other investment advisers registered or required to be registered shall file with the Director financial statements showing at a minimum the assets, liabilities and net capital of the investment adviser, prepared in accordance with generally accepted accounting principles. The financial statements need not be audited but must be signed by the investment adviser, by an officer, director, partner, or member of the investment adviser, or by the person who prepared the statement attesting that the statement is true and accurate, as of a date within ninety days of the date of initial application, or within ninety days of the expiration of a current registration, as the case may be.

009.03 The financial statements required by this Section shall be filed as part of the investment adviser’s initial or renewal application.

009.04 This Section does not apply to an investment adviser whose principal place of business is not located in this state, provided:

009.04A Such investment adviser is registered in the state in which its principal place of business is located; and

009.04B Such investment adviser is in compliance with the minimum financial requirements established by the state in which its principal place of business is located, if any.

009.04C For purposes of this Section, principal place of business means the executive office of the investment adviser from which the officers, partners, or managers of the investment adviser direct, control, and coordinate the activities of the investment adviser.

010 INVESTMENT ADVISER BROCHURE .

010.01 Unless otherwise provided in this Rule, an investment adviser registered or required to be registered pursuant to Section 8-1103 of the Act shall, in accordance with the provisions of this subsection, furnish each advisory client and prospective advisory client with:

010.01A A brochure which may be a copy of Part 2A of its Form ADV or written documents containing the information required by Part 2A of Form ADV;

010.01B A copy of the Form ADV Part 2B brochure supplement for each individual that:

010.01B1 Provides investment advice and has direct contact with clients in this state; or

010.01B2 Exercises discretion over assets of clients in this state, even if no direct contact is involved;

010.01C A copy of the Form ADV Part 2A Appendix 1 wrap fee brochure if the investment adviser sponsors or participates in a wrap fee account;

010.01D A summary of material changes, which may be included in Form ADV Part 2 or given as a separate document; and

010.01E Such other information as the Director may require.

010.01F The brochure must comply with the language, organizational format and filing requirements specified in the instructions to Form ADV Part 2.

010.02 Delivery.

010.02A Initial Delivery. Except as provided in subsection 010.02C, below, an investment adviser shall deliver the Form ADV Part 2A brochure and any related brochure supplements to a prospective advisory client:

010.02A1 Not less than forty-eight hours prior to entering into any advisory contract with such client or prospective client; or

010.02A2 At the time of entering into any such contract, if the advisory client has a right to terminate the contract without penalty within five business days after entering into the contract.

010.02B Annual Delivery. Except as provided in subsection 010.02C, below, within one hundred twenty days of the end of its fiscal year, an investment adviser must deliver:

010.02B1 A free, updated brochure and related brochure supplements which include or are accompanied by a summary of material changes; or

010.02B2 A summary of material changes that includes an offer to provide a copy of the updated brochure and supplements and information on how the client may obtain a copy of the brochures and supplements.

010.02C Delivery of the brochure and related brochure supplements required by subsections 010.02A and 010.02B need not be made to:

010.02C1 Clients who receive only impersonal advice and who pay less than five hundred dollars ($500.00) in fees per year;

010.02C2 An investment company registered under the Investment Company Act of 1940; or

010.02C3 A business development company as defined in the Investment Company Act of 1940 and whose advisory contract meets the requirements of Section 15c of that Act.

010.02D Delivery of the brochure and related supplements may be made electronically if the investment adviser:

010.02D1 In the case of an initial delivery to a potential client, obtains a verification that a readable copy of the brochure and supplements were received by the client;

010.02D2 In the case of other than initial deliveries, obtains each client’s prior consent to provide the brochure and supplements electronically;

010.02D3 Prepares the electronically delivered brochure and supplements in the format prescribed in Section 010.01 and the Instructions to Form ADV Part 2;

010.02D4 Delivers the brochure and supplements in a format that can be retained by the client in either electronic or paper form; and

010.02D5 Establishes written procedures to supervise personnel transmitting the brochure and supplements and to prevent violations of this Rule.

010.03 Other Disclosures. Nothing in this Rule relieves any investment adviser from any obligation pursuant to any provision of the Act or the rules and regulations thereunder or other federal or state law, rule, or regulation, to disclose any information to its advisory clients or prospective advisory clients not specifically required by this Rule.

010.04 Definitions. For the purpose of this Rule:

010.04A “Contract for impersonal advisory services” means any contract relating solely to the provision of investment advisory services:

010.04A1 By means of written material or oral statements which do not purport to meet the objectives or needs of specific individuals or accounts;

010.04A2 Through the issuance of statistical information containing no expression of opinion as to the investment merits of a particular security; or

010.04A3 Any combination of the foregoing services.

010.04B “Entering into,” in reference to an advisory contract, does not include an extension or renewal without material change of any such contract which is in effect immediately prior to such extension or renewal.

011 ASSIGNMENTS . For purposes of Section 8-1102(3)(b) of the Act, a transaction which does not result in a change of actual control or management of an investment adviser is not an assignment.

012 CUSTODY OF CLIENT FUNDS OR SECURITIES .

012.01 Safekeeping required. It is unlawful and deemed to be a fraudulent, deceptive, or manipulative act, practice, or course of business for an investment adviser, registered or required to be registered, to have custody of client funds or securities unless:

012.01A Notice to Director. The investment adviser notifies the Director promptly in writing that the investment adviser has or may have custody. Such notification is required to be given on Form ADV.

012.01B Qualified Custodian. A qualified custodian maintains those funds and securities:

012.01B1 In a separate account for each client under that client’s name; or

012.01B2 In accounts that contain only the investment adviser’s clients’ funds and securities, under the investment adviser’s name as agent or trustee for the clients, or, in the case of a pooled investment vehicle that the investment adviser manages, in the name of the pooled investment vehicle.

012.01C Notice to Clients. If an investment adviser opens an account with a qualified custodian on its client’s behalf, under the client’s name, under the name of the investment adviser as agent, or under the name of a pooled investment vehicle, the investment adviser must notify the client in writing of the qualified custodian’s name, address, and the manner in which the funds or securities are maintained, promptly when the account is opened and following any changes to this information. If the investment adviser sends account statements to a client to which the investment adviser is required to provide this notice, the investment adviser must include in the notification provided to that client and in any subsequent account statement the investment adviser sends that client a statement urging the client to compare the account statements from the custodian with those from the investment adviser.

012.01D Account Statements. The investment adviser has a reasonable basis, after due inquiry, for believing that the qualified custodian sends an account statement, at least quarterly, to each client for which it maintains funds or securities, identifying the amount of funds and of each security in the account at the end of the period and setting forth all transactions in the account during that period.

012.01E Special Rule for Limited Partnerships and Limited Liability Companies. If the investment adviser or a related person is a general partner of a limited partnership, managing member of a limited liability company, or holds a comparable position for another type of pooled investment vehicle, the account statements required under Section 012.01D, above, must be sent to each limited partner, member or other beneficial owner.

012.01F Independent Verification. The client funds and securities of which the investment adviser has custody are verified by actual examination at least once during each calendar year, by an independent certified public accountant, pursuant to a written agreement between the investment adviser and the independent certified public accountant, at a time that is chosen by the independent certified public accountant without prior notice or announcement to the investment adviser and that is irregular from year to year. The written agreement must provide for the first examination to occur within six months of becoming subject to this paragraph, except that, if the investment adviser maintains client funds or securities pursuant to this Rule as a qualified custodian, the agreement must provide for the first examination to occur no later than six months after obtaining the internal control report. The written agreement must require the independent certified public accountant to:

012.01F1 File a certificate on Form ADV-E with the Director within one hundred twenty days of the time chosen by the independent certified public accountant to verify client funds and securities, stating that it has examined the funds and securities and describing the nature and extent of the examination.

012.01F2 Notify the Director within one business day of the finding of any material discrepancies during the course of the examination, by means of a facsimile transmission or electronic mail, followed by first class mail or overnight delivery, directed to the attention of the Director; and

012.01F3 File within four business days of the resignation or dismissal from, or other termination of, the engagement, or removing itself or being removed from consideration for being reappointed, Form ADV-E accompanied by a statement that includes:

012.01F3a The date of such resignation, dismissal, removal, or other termination, and the name, address, and contact information of the independent certified public accountant; and

012.01F3b An explanation of any problems relating to examination scope or procedure that contributed to such resignation, dismissal, removal, or other termination.

012.01G Investment Advisers Acting as Qualified Custodians. If the investment adviser maintains, or if the investment adviser has custody because a related person maintains, client funds or securities pursuant to this Rule as a qualified custodian in connection with advisory services the investment adviser provides to clients:

012.01G1 The independent certified public accountant that the investment adviser retains to perform the independent verification required by Section 012.01F, above, must be subject to regulation by the Public Company Accounting Oversight Board (“PCAOB”) or the Nebraska Board of Public Accountancy (“NBPA”), in accordance with applicable rules; and

012.01G2 The investment adviser must obtain, or receive from its related person, within six months of becoming subject to this paragraph and thereafter no less frequently than once each calendar year, a written internal control report prepared by an independent certified public accountant.

012.01G2a The internal control report must include an opinion of an independent certified public accountant as to whether controls have been placed in operation as of a specific date, and are suitably designed and are operating effectively to meet control objectives relating to custodial services, including the safeguarding of funds and securities held by either the investment adviser or a related person on behalf of the investment adviser’s clients, during the year;

012.01G2b The independent certified public accountant must verify that the funds and securities are reconciled to a custodian other than the investment adviser or the investment adviser’s related person; and

012.01G2c The independent certified public accountant must be subject to regulation by PCAOB or NBPA in accordance with applicable rules.

012.01H Independent Representatives. A client may designate an independent representative to receive, on his or her behalf, notices and account statements as required under Sections 012.01C and 012.01D, above.

012.02 Exceptions.

012.02A Shares of Mutual Funds. With respect to shares of an open-end company as defined in Section 5(a)(1) of the Investment Company Act of 1940 (“mutual fund”), the investment adviser may use the transfer agent for the mutual fund in lieu of a qualified custodian for purposes of complying with Section 012.01, above;

012.02B Certain Privately Offered Securities.

012.02B1 The investment adviser is not required to comply with Section 012.01B, above, with respect to securities that are:

012.02B1a Acquired from the issuer in a transaction or chain of transactions not involving any public offering;

012.02B1b Uncertificated and ownership thereof is recorded only on the books of the issuer or its transfer agent in the name of the client; and

012.02B1c Transferable only with prior consent of the issuer or holders of the outstanding securities of the issuer.

012.02B2 Notwithstanding Section 012.02B1, above, the provisions of this Section are available with respect to securities held for the account of a limited partnership, limited liability company, or other type of pooled investment vehicle only if the limited partnership, limited liability company, or other pooled investment vehicle is audited, and the audited financial statements are distributed, as described in Section 012.02D, below, and the investment adviser notifies the Director in writing that the investment adviser intends to provide audited financial statements, as described above. Such notification is required to be provided on Form ADV.

012.02C Fee Deduction. Notwithstanding Section 012.01F, above, an investment adviser is not required to obtain an independent verification of client funds and securities maintained by a qualified custodian if all of the following are met:

012.02C1 The investment adviser has custody of the funds and securities solely as a consequence of its authority to make withdrawals from client accounts to pay its advisory fee;

012.02C2 The investment adviser has written authorization from the client to deduct advisory fees from the account held with the qualified custodian;

012.02C3 Each time a fee is directly deducted from a client account, the investment adviser concurrently sends:

012.02C3a The qualified custodian an invoice or statement of the amount of the fee to be deducted from the client’s account; and

012.02C3b The client an invoice or statement itemizing the fee. Itemization includes the formula used to calculate the fee, the amount of assets under management the fee is based on, and the time period covered by the fee.

012.02C4 The investment adviser notifies the Director in writing that the investment adviser intends to use the safeguards provided above. Such notification is required to be given on Form ADV.

012.02D Limited Partnerships, Limited Liability Companies, and other Pooled Investment Vehicles Subject to Annual Audit. An investment adviser is not required to comply with Sections 012.01C and 012.01D, above, and shall be deemed to have complied with Section 012.0.1F, above, with respect to the account of a limited partnership, limited liability company, or another type of pooled investment vehicle if the following conditions are met:

012.02D1 The investment adviser sends to all limited partners, members or other beneficial owners at least quarterly, a statement showing:

012.02D1a The total amount of all additions to and withdrawals from the fund as a whole as well as the opening and closing value of the fund at the end of the quarter based on the custodian’s records;

012.02D1b A listing of all long and short positions on the closing date of the statement in accordance with FASB Rule ASC 946-210-50; and

012.02D1c The total amount of additions to and withdrawals from the fund by the investor as well as the total value of the investor’s interest in the fund at the end of the quarter.

012.02D2 At least annually, the fund is subject to an audit and distributes its audited financial statements prepared in accordance with generally accepted accounting principles to all limited partners, members or other beneficial owners within one hundred twenty days of the end of its fiscal year;

012.02D3 The audit is performed by an independent certified public accountant that, at the time of the audit, is subject to regulation by PCAOB or NBPA in accordance with applicable rules;

012.02D4 Upon liquidation, the investment adviser distributes the fund’s final audited financial statements prepared in accordance with generally accepted accounting principles to all limited partners, members or other beneficial owners, and the Director promptly after the completion of such audit;

012.02D5 The written agreement with the independent certified public accountant must require the independent certified public accountant, upon resignation or dismissal from, or other termination of, the engagement, or upon removing itself or being removed from consideration for being reappointed, to notify the Director within four business days accompanied by a statement that includes:

012.02D5a The date of such resignation, dismissal, removal, or other termination, and the name, address, and contact information of the independent certified public accountant; and

012.02D5b An explanation of any problems relating to audit scope or procedure that contributed to such resignation, dismissal, removal, or other termination.

012.02D6 The investment adviser must also notify the Director in writing that the investment adviser intends to employ the use of the statement delivery and audit safeguards described above. Such notification is required to be given on Form ADV.

012.02E Registered Investment Companies. The investment adviser is not required to comply with this Rule with respect to the account of an investment company registered under the Investment Company Act of 1940.

012.03 Delivery to Related Persons. Sending an account statement under Section 012.01E, above, or distributing audited financial statements under Section 012.02D, above, does not satisfy the requirements of this Rule if such account statements or financial statements are sent solely to limited partners, members or other beneficial owners that themselves are limited partnerships, limited liability companies, or another type of pooled investment vehicle and are related persons of the investment adviser.

012.04 Definitions. For purposes of this Rule:

012.04A Control means the power, directly or indirectly, to direct the management or policies of a person whether through ownership of securities, by contract, or otherwise. For purposes of determining control:

012.04A1 Each of the investment adviser’s officers, partners, or directors exercising executive responsibility, or persons having similar status or functions, is presumed to control the investment adviser;

012.04A2 A person is presumed to control a corporation if the person:

012.04A2a Directly or indirectly has the right to vote twenty five percent or more of a class of the corporation’s voting securities; or

012.04A2b Has the power to sell or direct the sale of twenty five percent or more of a class of the corporation’s voting securities;

012.04A3 A person is presumed to control a partnership if the person has the right to receive upon dissolution, or has contributed, twenty five percent or more of the capital of the partnership;

012.04A4 A person is presumed to control a limited liability company if the person:

012.04A4a Directly or indirectly has the right to vote twenty five percent or more of a class of the interests of the limited liability company;

012.04A4b Has the right to receive upon dissolution, or has contributed, twenty five percent or more of the capital of the limited liability company;

012.04A4c Is an elected manager of the limited liability company; or

012.04A5 A person is presumed to control a trust if the person is a trustee or managing agent of the trust.

012.04B Custody means holding directly or indirectly, client funds or securities, or having any authority to obtain possession of or the ability to appropriate client funds or securities. The investment adviser has custody if a related person holds, directly or indirectly, client funds or securities, or has any authority to obtain possession of them, in connection with advisory services the investment adviser provides to clients.

012.04B1 Custody includes:

012.04B1a Possession of client funds or securities unless the investment adviser receives them inadvertently and returns them to the sender within three business days of receiving them;

012.04B1b Any arrangement, including a general power of attorney, under which the investment adviser is authorized or permitted to withdraw client funds or securities maintained with a custodian upon the investment adviser’s instruction to the custodian; and

012.04B1c Any capacity, such as general partner of a limited partnership, managing member of a limited liability company or a comparable position for another type of pooled investment vehicle, or trustee of a trust, that gives the investment adviser, its supervised person, or investment adviser representative, legal ownership of or access to client funds or securities.

012.04B2 Receipt of checks drawn by clients and made payable to third parties will not meet the definition of custody if forwarded to the third party within three business days of receipt and the investment adviser maintains the records required under 48 NAC 10.002.22.

012.04C Independent certified public accountant means a certified public accountant that meets the standards of independence described in Rule 2-01(b) and (c) of Regulation S-X (17 CFR 210.2-01(b) and (c)).

012.04D Independent representative means a person who:

012.04D1 Acts as agent for an advisory client, including in the case of a pooled investment vehicle, for limited partners or a limited partnership, members of a limited liability company, or other beneficial owners of another type of pooled investment vehicle and by law or contract is obliged to act in the best interest of the advisory client or the limited partners, members, or other beneficial owners;

012.04D2 Does not control, is not controlled by, and is not under common control with the investment adviser; and

012.04D3 Does not have, and has not had within the past two years, a material business relationship with the investment adviser.

012.04E Qualified custodian means the following:

012.04E1 A bank or savings association that has deposits insured by the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act;

012.04E2 A broker-dealer registered in this jurisdiction and with the Securities and Exchange Commission holding the client assets in customer accounts;

012.04E3 A registered futures commission merchant registered under Section 4f(a) of the Commodity Exchange Act, holding the client assets in customer accounts, but only with respect to clients’ funds and security futures, or other securities incidental to transactions in contracts for the purchase or sale of a commodity for future delivery and options thereon; and

012.04E4 A foreign financial institution that customarily holds financial assets for its customers, provided that the foreign financial institution keeps the advisory clients’ assets in customer accounts segregated from its proprietary assets.

012.04E5 An investment adviser who has custody of the funds and securities solely as a consequence of its authority to make withdrawals from client accounts to pay its advisory fee is not a qualified custodian.

012.04F Related person means any person, directly or indirectly, controlling or controlled by the investment adviser, and any person that is under common control with the investment adviser.

013 POLICIES AND PROCEDURES. Every investment adviser registered or required to be registered under the Act shall establish, maintain, and enforce written policies and procedures tailored to the investment adviser’s business model, taking into account the size of the firm, type(s) of services provided, and the number of locations of the investment adviser. The written policies and procedures must provide for at least the following:

013.01 Compliance Policies and Procedures. The investment adviser must establish, maintain, and enforce written compliance policies and procedures reasonably designed to prevent violations by the investment adviser of the Act and the rules that the Director has adopted under the Act;

013.02 Supervisory Policies and Procedures. The investment adviser must establish, maintain, and enforce written supervisory policies and procedures reasonably designed to prevent violations by the investment adviser’s supervised persons of the Act and the rules that the Director has adopted under the Act;

013.03 Proxy Voting Policies and Procedures.

013.03A If the investment adviser has the authority to vote client securities:

013.03A1 The investment adviser must establish, maintain, and enforce written proxy voting policies and procedures that are reasonably designed to ensure that the investment adviser votes client securities in the best interest of clients. These procedures must include how the investment adviser addresses material conflicts that may arise between its interests and those of the investment adviser’s clients;

013.03A2 Disclose to clients how they may obtain information from the investment adviser about how it voted with respect to their securities; and

013.03A3 Describe to clients the investment adviser’s proxy voting policies and procedures and, upon request, furnish a copy of the policies and procedures to the requesting client.

013.03B If the investment adviser does not have the authority to vote client securities then this information must be disclosed to clients.

013.04 Physical Security and Cybersecurity Policies and Procedures. The investment adviser must establish, implement, update, and enforce written physical security and cybersecurity policies and procedures reasonably designed to ensure the confidentiality, integrity, and availability of physical and electronic records and information. The policies and procedures must be tailored to the investment adviser’s business model, taking into account the size of the firm, type(s) of services provided, and the number of locations of the investment adviser.

013.04A The physical security and cybersecurity policies and procedures must:

013.04A1 Protect against reasonably anticipated threats or hazards to the security or integrity of client records and information;

013.04A2 Ensure that the investment adviser safeguards confidential client records and information; and

013.04A3 Protect any records and information the release of which could result in harm or inconvenience to any client.

013.04B The physical security and cybersecurity policies and procedures must cover at least five functions:

013.04B1 Identify. Develop the organizational understanding to manage information security risk to systems, assets, data, and capabilities.

013.04B2 Protect. Develop and implement the appropriate safeguards to ensure delivery of critical infrastructure services.

013.04B3 Detect. Develop and implement the appropriate activities to identify the occurrence of an information security event;

013.04B4 Respond. Develop and implement the appropriate activities to take action regarding a detected information security event; and

013.04B5 Recover. Develop and implement the appropriate activities to maintain plans for resilience and to restore any capabilities or services that were impaired due to an information security event.

013.04C Privacy Policy. The investment adviser must deliver upon the investment adviser’s engagement by a client, and on an annual basis thereafter, a privacy policy to each client that is reasonably designed to aid in the client’s understanding of how the investment adviser collects and shares, to the extent permitted by state and federal law, non-public personal information. The investment adviser must promptly update and deliver to each client an amended privacy policy if any of the information in the policy becomes inaccurate.

013.05 Code of Ethics.

013.05A The investment adviser must establish, maintain, and enforce a written code of ethics that, at a minimum, includes:

013.05A1 A standard (or standards) of business conduct that the investment adviser requires of its supervised persons, which must reflect the investment adviser’s fiduciary obligations and those of its supervised persons;

013.05A2 Provisions requiring the investment adviser’s supervised persons to comply with applicable State and Federal securities laws;

013.05A3 Provisions requiring all of the investment adviser’s access persons to report, and the investment adviser to review, their personal securities transactions and holdings periodically as provided below;

013.05A4 Provisions requiring supervised persons to report any violations of the investment adviser’s code of ethics promptly to its chief compliance officer or, provided the investment adviser’s chief compliance officer also receives reports of all violations, to other persons designated in the investment adviser’s code of ethics; and

013.05A5 Provisions requiring the investment adviser to provide each of its supervised persons with a copy of the investment adviser’s code of ethics and any amendments and requiring the investment adviser’s supervised persons to provide it with a written acknowledgment of their receipt of the code and any amendments.

013.05B Reporting Requirements.

013.05B1 Holdings reports. The code of ethics must require the investment adviser’s access persons to submit to its chief compliance officer or other persons designated in the investment adviser’s code of ethics a report of the access person’s current securities holdings that meets the following requirements:

013.05B1a Content of holdings reports. Each holdings report must contain, at a minimum:

013.05B1a1 The title and type of security, and as applicable the exchange ticker symbol or CUSIP number, number of shares, and principal amount of each reportable security in which the access person has any direct or indirect beneficial ownership;

013.05B1a2 The name of any broker, dealer, or bank with which the access person maintains an account in which any securities are held for the access person’s direct or indirect benefit; and

013.05B1a3 The date the access person submits the report.

013.05B1b Timing of holdings reports. The investment adviser’s access persons must each submit a holdings report:

013.05B1b1 No later than 10 days after the person becomes an access person, and the information must be current as of a date no more than 45 days prior to the date the person becomes an access person.

013.05B1b2 At least once each 12-month period thereafter on a date selected by the investment adviser, and the information must be current as of a date no more than 45 days prior to the date the report was submitted.

013.05B2 Transaction reports. The code of ethics must require access persons to submit to the investment adviser’s chief compliance officer or other persons designated in the investment adviser’s code of ethics quarterly securities transactions reports that meet the following requirements:

013.05B2a Content of transaction reports. Each transaction report must contain, at minimum, the following information about each transaction involving a reportable security in which the access person had, or as a result of the transaction acquired, any direct or indirect beneficial ownership:

013.05B2a1 The date of the transaction, the title, and as applicable the exchange ticker symbol or CUSIP number, interest rate and maturity date, number of shares, and principal amount of each reportable security involved;

013.05B2a2 The nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition);

013.05B2a3 The price of the security at which the transaction was effected;

013.05B2a4 The name of the broker, dealer, or bank with or through which the transaction was effected; and

013.05B2a5 The date the access person submits the report.

013.05B2b Timing of transaction reports. Each access person must submit a transaction report no later than 30 days after the end of each calendar quarter, which report must cover, at a minimum, all transactions during the quarter.

013.05B3 Exceptions from reporting requirements. The investment adviser’s code of ethics need not require an access person to submit:

013.05B3a Any report with respect to securities held in accounts over which the access person had no direct or indirect influence or control;

013.05B3b A transaction report with respect to transactions effected pursuant to an automatic investment plan in which regular periodic purchases or withdrawals are made automatically in or from investment accounts in accordance with a predetermined schedule and allocation, including a dividend reinvestment plan;

013.05B3c A transaction report if the report would duplicate information contained in broker trade confirmations or account statements that the investment adviser holds in its records so long as the investment adviser receives the confirmations or statements no later than 30 days after the end of the applicable calendar quarter.

013.05B4 Pre-approval of certain investments. The investment adviser’s code of ethics must require its access persons to obtain the investment adviser’s approval before they directly or indirectly acquire beneficial ownership in any security in an initial public offering or in a limited offering.

013.05B5 Small advisers. If the investment adviser has only one access person, it is not required to submit reports to itself or to obtain its own approval for investments in any security in an initial public offering or in a limited offering, if the investment adviser maintains records of all of its holdings and transactions that this section would otherwise require the investment adviser to report.

013.06 Material Non-Public Information Policy and Procedures. The investment adviser must establish, maintain, and enforce written policies and procedures reasonably designed to prevent the misuse of material, non-public information by the investment adviser or any person associated with the investment adviser.

013.07 Business Continuity and Succession Plan. The investment adviser must establish, maintain, and enforce written policies and procedure relating to a business continuity and succession plan. The plan must provide for at least the following:

013.07A The protection, backup, and recovery of books and records.

013.07B Alternate means of communications with customers, key personnel, employees, vendors, service providers (including third-party custodians), and regulators, including, but not limited to, providing notice of a significant business interruption or the death or unavailability of key personnel or other disruptions or cessation of business activities.

013.07C Office relocation in the event of temporary or permanent loss of a principal place of business.

013.07D Assignment of duties to qualified responsible persons in the event of the death or unavailability of key personnel

013.07E Otherwise minimizing service disruptions and client harm that could result from a sudden significant business interruption.

014 ANNUAL REVIEW. The investment adviser must review, no less frequently than annually, the adequacy of the policies and procedures established pursuant to section 013 above, and the effectiveness of their implementation.

015 CHIEF COMPLIANCE OFFICER. The investment adviser must designate a supervised person as the chief compliance officer responsible for administering the investment adviser’s policies and procedures.

016 DEFINITIONS. The following definitions apply to Sections 013, 014, and 015 above.

016.01 ‘‘Supervised person’’ means any partner, officer, director (or other person occupying a similar status or performing similar functions), or employee of an investment adviser, or other person who provides investment advice on behalf of the investment adviser and is subject to the supervision and control of the investment adviser. The definition includes investment adviser representatives, employees, independent contractors, or other associated persons and supervised personnel, or other person acting on the behalf of the investment adviser.

016.02 “Chief compliance officer” means a supervised person with the authority and resources to develop and enforce the investment adviser’s policies and procedures. The individual designated to serve as chief compliance officer must be registered as an investment adviser representative and must have the background and skills appropriate for fulfilling the responsibilities of the position.

016.03 “Act” means the Securities Act of Nebraska.

016.04 “Access person” means:

016.04A Any of the investment adviser’s supervised persons:

016.04A1 Who has access to non-public information regarding any client’s purchase or sale of securities, or non-public information regarding the portfolio holdings of any reportable fund, or

016.04A2 Who is involved in making securities recommendations to clients, or who has access to such recommendations that are non-public.

016.04B If providing investment advice is the investment adviser’s primary business, all of its directors, officers and partners are presumed to be access persons.

016.05 “Beneficial ownership” is interpreted in the same manner as it would be under 17 C.F.R. § 240.16a-1 in determining whether a person has beneficial ownership of a security for purposes of section 16 of the Securities Exchange Act of 1934 (15 U.S.C. 78p) and the rules and regulations thereunder. Any report required by 17 C.F.R. 275.204A-1(b) may contain a statement that the report will not be construed as an admission that the person making the report has any direct or indirect beneficial ownership in the security to which the report relates.

016.06 “Federal securities laws” means the Securities Act of 1933 (15 U.S.C. 77a-aa), the Securities Exchange Act of 1934 (15 U.S.C. 78a-mm), the Investment Company Act of 1940 (15 U.S.C. 80a), the Investment Advisers Act of 1940 (15 U.S.C. 80b), title V of the Gramm-Leach-Bliley Act (Pub. L. 106-102, 113 Stat. 1338 (1999), the Sarbanes-Oxley Act of 2002 (Pub. L. 107-204, 116 Stat. 745 (2002)), any rules adopted by the U.S. Securities and Exchange Commission under any of these statutes, the Bank Secrecy Act (31 U.S.C. 5311-5314; 5316-5332) as it applies to funds and investment advisers, and any rules adopted thereunder by the U.S. Securities and Exchange Commission or the U.S. Department of the Treasury.

016.07 “Fund” means an investment company registered under the Investment Company Act.

016.08 “Initial public offering” means an offering of securities registered under the Securities Act of 1933 (15 U.S.C. 77a), the issuer of which, immediately before the registration, was not subject to the reporting requirements of sections 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)).

016.09 “Limited offering” means an offering that is exempt from registration under the Securities Act of 1933 pursuant to section 4(2) or section 4(5) (15 U.S.C. 77d(2) or 77d(5)) or pursuant to §§ 230.504, 230.505, or 230.506 of this chapter.

016.10 “Purchase or sale of a security” includes, among other things, the writing of an option to purchase or sell a security.

016.11 “Reportable security” means a security as defined in section 202(a)(18) of the Securities Act of 1933(15 U.S.C. 80b-2(a)(18)), except that it does not include:

016.11A Direct obligations of the Government of the United States;

016.11B Bankers' acceptances, bank certificates of deposit, commercial paper and high-quality short-term debt instruments, including repurchase agreements;

016.11C Shares issued by money market funds;

016.11D Shares issued by open-end funds other than reportable funds; and

016.11E Shares issued by unit investment trusts that are invested exclusively in one or more open-end funds, none of which are reportable funds.

016.12 “State securities laws” means all applicable state securities statutes, rules, and regulations, including, without limitation, the registration, permit or qualification requirements thereunder.

017 REGISTRATION OF SUCCESSOR TO REGISTERED INVESTMENT ADVISER . In the event that an investment adviser succeeds to and continues the business of an investment adviser registered pursuant to Section 8-1103 of the Act, the registration of the predecessor shall be deemed to remain effective as the registration of the successor if the successor, within thirty (days after such succession, files an application for registration on Form ADV, and the predecessor files a notice of withdrawal from registration on Form ADV-W.

.017.01The registration of the predecessor investment adviser will cease to be effective as the registration of the successor investment adviser forty-five days after the application for registration on Form ADV is filed by such successor.

017.02 Notwithstanding any other provision of this Section:

.017.02A A Form ADV filed by an investment adviser partnership which is not registered when such form is filed and which succeeds to and continues the business of a predecessor partnership registered as an investment adviser shall be deemed to be an application for registration even though designated as an amendment if it is filed to reflect the changes in the partnership and to furnish required information concerning any new partners.

017.02B A Form ADV filed by an investment adviser corporation which is not registered when such form is filed and which succeeds to and continues the business of a predecessor corporation registered as an investment adviser shall be deemed to be an application for registration even though designated as an amendment if the succession is based solely on a change in the predecessor’s state of incorporation and the amendment is filed to reflect that change.

017.02C A Form ADV filed by an investment adviser corporation, partnership, sole proprietorship or other entity which is not registered when such form is filed and which succeeds to and continues the business of a predecessor corporation, partnership, sole proprietorship or other entity registered as an investment adviser shall be deemed to be an application for registration even though designated as an amendment if the succession is based solely on a change in the predecessor’s form of organization and the amendment is filed to reflect that change.

018 VERIFICATION OF IMMIGRATION STATUS . Every investment adviser who registers investment adviser representatives to transact business in Nebraska must verify the citizenship or immigration status of each investment adviser representative registered to transact business on its behalf in Nebraska and submit such verification to the Department.

.018.01 For each investment adviser representative identified as a qualified legal alien, the investment adviser must submit a completed United States Citizenship Attestation Form, and one of the currently acceptable forms of documentation required by the Systematic Alien Verification for Entitlements Program and the Department of Homeland Security.

018.02 The investment adviser shall maintain, as a required book or record under 48 NAC 10.002.21, a copy of the completed United States Citizenship Attestation Form for each investment adviser representative registered in Nebraska, regardless of citizenship or immigration status.

019 USING THE INTERNET FOR GENERAL DISSEMINATION OF INFORMATION ON PRODUCTS AND SERVICES . Investment advisers shall not be deemed to be “transacting business” in this state for purposes of Section 8-1103 of the Act based solely on the use of the Internet, world wide web, and similar proprietary or common carrier electronic systems (hereinafter the “Internet”) to distribute information on available products and services through certain communications made on the Internet directed generally to anyone having access to the Internet, and transmitted through postings on bulletin boards, social networking sites, blogs or similar sites, displays on “Home Pages” or similar methods (hereinafter, “Internet Communications”) if the following conditions are observed:

.019.01 The Internet Communication contains a disclosure statement in which it is clearly stated that:

019.01A The investment adviser in question may only transact business in this state if first registered, excluded or exempted from the investment adviser registration requirements of the Act; and

.019.01B The investment adviser will not make follow-up, individualized responses to persons in this state that involve the rendering of personalized investment advice for compensation, unless the investment adviser has complied with, or has qualified for an applicable exemption or exclusion from, the investment adviser registration requirements of the Act.

.019.02 The Internet Communication contains a mechanism, including and without limitation, technical “firewalls” or other implemented policies and procedures, designed reasonably to ensure that prior to any subsequent, direct communication with prospective customers or clients in this state, said investment adviser is first registered in this state or qualifies for an exemption or exclusion from such requirement.

019.02A Nothing in this paragraph shall be construed to relieve an investment adviser from any applicable securities registration requirement in this state;

019.03 The Internet Communication does not involve the rendering of personalized investment advice for compensation in this state over the Internet, but is limited to the dissemination of general information on products and services.

020 DISHONEST OR UNETHICAL BUSINESS PRACTICES .

020.01The conduct set forth in 48 NAC 12.006 l constitutes “an act, practice or course of business which operates, or would operate, as a fraud or deceit upon another person” by an investment adviser for purposes of Section 8-1102 of the Act and “dishonest or unethical business practices” by an investment adviser for purposes of Section 8-1102 and Section 8-1103of the Act.

020.02 The delineation of certain acts and practices is not intended to be all inclusive. Acts or practices not enumerated in 48 NAC 12.006 may also be deemed fraudulent and dishonest.

History

Effective 2024-09-18

Chapter 8 Federal Covered Advisers

Neb. Admin. Code tit. 48, ch. 8 Federal Covered Advisers {#sec-48-nac-8 omnilex-key=us-ne-regs-official--title-48--48 NAC 8}

001 GENERAL .

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Section 8-1120(3) of the Securities Act of Nebraska (“Act”).

001.02 The Department has determined that this Rule relating to federal covered advisers is consistent with investor protection and is in the public interest.

001.03 The definitions in 48 NAC 2 shall apply to the provisions of this Rule, unless otherwise specified.

001.04 Federal statutes and rules of the Securities and Exchange Commission (“SEC”) or the Financial Industry Regulatory Authority (“FINRA”) referenced herein shall mean those statutes and rules as amended on or before the effective date of this Rule. A copy of the applicable statutes or rules referenced in this Rule is attached hereto.

002 NOTICE FILING . Every federal covered adviser doing business in Nebraska shall, pursuant to Section 8-1103(3) of the Act, file with the Central Registry Depository/Investment Adviser Registration Depository (“CRD/IARD”) a notice containing the following information:

002.01 A copy of Application for Investment Adviser Registration (“Form ADV”), Part 1A and Part 2, together with all applicable schedules, as filed with the Securities and Exchange Commission (“SEC”) for registration as an investment adviser pursuant to Section 203 of the Investment Advisers Act of 1940;

002.02 Either a consent to service of process in Nebraska or a signed and fully executed page 1 of Form ADV, that consents to the appointment of the Director of the Department of Banking and Finance as the agent of the federal covered adviser for service of process in Nebraska.

002.02A With respect to any document filed electronically through CRD/IARD, when a signature or signatures are required by the particular instructions of any filing to be made through CRD/IARD, a duly authorized officer of the applicant or the applicant him or herself, as required, shall affix his or her electronic signature to the filing by typing his or her name in the appropriate fields and submitting the filing to CRD/IARD. Submission of a filing in this manner shall constitute irrefutable evidence of legal signature by any individual whose name is typed on the filing.

002.03 A fee in the amount of two hundred dollars ($200.00) to be paid through the CRD/IARD; and

002.04 Any other information the Director may require.

002.05 A notice filing of a federal covered adviser shall be deemed filed with the Director when the filing fee and Form ADV are transmitted to and accepted by CRD/IARD on behalf of Nebraska.

003 RENEWAL .

003.01 Federal covered adviser notice filings automatically expire annually on December 31. Notice filings by federal covered advisers must be renewed on or prior to that date.

003.02 The notice filing may be renewed annually by filing the following information with CRD/IARD:

003.02A A copy of all amendments to Form ADV, Part 1A and Part 2, together with all applicable schedules, that have not previously been filed with the Director; and

003.02B A fee in the amount of two hundred dollars ($200.00) to be paid through CRD/IARD.

003.02C A notice filing of a federal covered adviser shall be deemed filed when the filing fee and Form ADV are filed with, and accepted by, CRD/IARD on behalf of Nebraska.

004 WITHDRAWAL . If a federal covered adviser is no longer conducting business in the state, the federal covered adviser shall notify the Director, through CRD/IARD, by filing Notice of Withdrawal from Registration as Investment Adviser, (“Form ADV-W”). A notice of withdrawal is deemed effective when filed with, and accepted by, CRD/IARD on behalf of Nebraska.

005 CORRECTION OF DOCUMENTS .

005.01 If the information contained in any document filed pursuant to this Rule is or becomes inaccurate or incomplete in any material respect, the federal covered adviser shall file a correcting amendment.

005.02 Any amendment required by Section 005.01, above, for a federal covered adviser shall be made on Form ADV in the manner prescribed by that form.

005.03 Any amendment to Form ADV shall be filed within the time period specified in the instructions to that form relating to filings made with the SEC.

006 SUPERVISION . A federal covered adviser is ultimately responsible for the acts of its investment adviser representatives and other associated persons and must maintain reasonable supervision and control over such persons at all times.

007 ASSIGNMENTS . For purposes of Section 8-1102(3)(b) of the Act, a transaction which does not result in a change of actual control or management of a federal covered adviser is not an assignment.

008 NOTICE FILING BY A SUCCESSOR TO FEDERAL COVERED ADVISER . In the event that a federal covered adviser succeeds to and continues the business of a federal covered adviser for which a notice filing has been made pursuant to Section 8-1103(b) of the Act or succeeds to and continues the business of a registered investment adviser, the notice filing or registration of the predecessor shall be deemed to remain effective as the notice filing of the successor if the successor, within thirty days from such succession, files a copy of its Form ADV, and the predecessor files a copy of Form ADV-W if and when filed with the SEC.

009 VERIFICATION OF IMMIGRATION STATUS . Every federal covered adviser who registers investment adviser representatives to transact business in Nebraska must verify the citizenship and immigration status of each investment adviser representative registered to transact business on its behalf in Nebraska and submit such verification to the Department.

009.01 For each investment adviser representative identified as a qualified legal alien, the federal covered adviser must submit a completed United States Citizenship Attestation Form, and a legible, current and unexpired copy of the front and back of one of the currently acceptable forms of documentation required by the Systematic Alien Verification for Entitlements Program and the Department of Homeland Security.

009.02 The federal covered adviser shall maintain a copy of the completed United States Citizenship Attestation Form for each investment adviser representative registered in Nebraska, regardless of citizenship or immigration status.

010 DISHONEST OR UNETHICAL BUSINESS PRACTICES .

010.01 The conduct set forth in 48 NAC 12.005 shall constitute “an act, practice or course of business which operates, or would operate, as a fraud or deceit upon another person,” for purposes of Section 8-1102(2)(b) of the Act and “dishonest or unethical business practices” for purposes of Section 8-1102(2)(d) of the Act by a federal covered adviser.

010.02 The delineation of certain acts and practices is not intended to be all inclusive. Acts or practices not enumerated therein may also be deemed fraudulent and dishonest.

History

Effective 2017-06-05

Chapter 9 Investment Adviser Representatives

Neb. Admin. Code tit. 48, ch. 9 Investment Adviser Representatives {#sec-48-nac-9 omnilex-key=us-ne-regs-official--title-48--48 NAC 9}

001 GENERAL .

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Section 8-1120(3) of the Securities Act of Nebraska (“Act”).

001.02 The Department has determined that this Rule relating to investment adviser representatives is consistent with investor protection and is in the public interest.

001.04 The definitions in 48 NAC 2 apply to the provisions of this Rule, unless otherwise specified.

001.05 Federal statutes and rules of the Securities and Exchange Commission (“SEC”) or the Financial Industry Regulatory Authority (“FINRA”) referenced herein mean those statutes and rules as amended on or before the effective date of this Rule. A copy of the statutes or rules referenced in this Rule is available as an appendix to this rule at http://www.ndbf.ne.gov/legal/title48.shtml.

002 APPLICATION . The application for initial registration as an investment adviser representative pursuant to Section 8-1103(3) of the Act shall be filed as directed in Section 008, below, and contain the following information:

002.01 Uniform Application for Securities Industry Registration or Transfer (“Form U4”), complete, accurate, and current;

002.02 Proof of passage of a qualifying examination set forth in Section 003, below;

002.03 A copy of Form ADV Part 2B;

002.03A An investment adviser representative affiliated with a federal covered adviser is responsible for ensuring that Form ADV Part 2B is filed with the Director.

002.04 A fee in the amount of forty dollars ($40.00); and

002.05 Any other information the Director may require.

003 EXAMINATION REQUIREMENTS .

003.01 The investment adviser representative shall have taken and passed the following qualifying examinations administered by the Financial Industry Regulatory Authority:

003.01A The Uniform Investment Adviser Licensing Examination (Series 65 examination) after January 1, 2000, within two years of the date of application; or

003.01B The Uniform Combined State Law Examination (Series 66 examination) after January 1, 2000 and the General Securities Representative Examination (Series 7), within two years of the date of application, and

003.01C The Securities Industry Essential Examination within four years of the date of application.

003.02 The examination requirement does not apply to an individual who currently holds, and who maintains, one of the following professional designations:

003.02A Certified Financial Planner (CFP) awarded by the Certified Financial Planner Board of Standards, Inc.;

003.02B Chartered Financial Consultant (ChFC) awarded by The American College of Financial Services;

003.02C Personal Financial Specialist (PFS) awarded by the American Institute of Certified Public Accountants;

003.02D Chartered Financial Analyst (CFA) awarded by the Institute of Chartered Financial Analysts; or

003.02E Chartered Investment Counselor (CIC) awarded by the Investment Adviser Association.

003.03 Any individual who was registered as an investment adviser or investment adviser representative in any jurisdiction in the United States on January 1, 2000, and who has no subsequent gap in registration longer than two years, is not required to satisfy the examination requirements for continued registration.

003.04 An individual who has a gap in registration of two years or less between the date of the termination of the individual’s most recent registration in Nebraska and the date of application for registration is not required to comply with the examination requirements of this Rule.

003.05 Any individual who is not registered as an investment adviser representative in any state for more than two years but less than five years, who has elected to participate in the FINRA Maintaining Qualifications Program pursuant to FINRA Rule 1240(c), and whose appropriate FINRA qualifying examinations remain valid pursuant to effective participation in the FINRA Maintaining Qualifications Program shall not have to retake the appropriate FINRA qualifying examinations to comply with the examination requirements of Section 003.01; provided, however, that successful participation in the FINRA Maintaining Qualifications Program shall not extend the Uniform Investment Adviser Licensing Examination (“Series 65 Examination”) or the Unform Combined State Law Examination (“Series 66 Examination”) for purposes of investment adviser representative registration.

003.06 Notwithstanding subsection 003.05 of this rule, an individual who terminates heir registration as an investment adviser representative may maintain the validity of their Series 65 Examination or the investment adviser representative portion of the Series 66 Examination, as applicable, without being employed by or associated with an investment adviser or federal covered investment adviser for a maximum of five years following the termination of the effectiveness of the investment adviser representative registration if the individual meets all of the following:

003.06A The individual previously took and passed the examination for which they seek to maintain validity under this rule;

003.06B The individual was registered as an investment adviser representative for at least one year immediately preceding the termination of the investment adviser representative registration;

003.06C The individual was not subject to a statutory disqualification as defined in Section 3(a)(39) of the Exchange Act while registered as an investment adviser representative or at any period after termination of the registration;

003.06D The person elects to participate in the Exam Validity Extension Program (“EVEP”) under this paragraph within two years from the effective date of the termination of the investment adviser representative registration;

003.06E The individual does not have a deficiency under the investment adviser representative continuing education program at the time the investment adviser representative registration becomes ineffective;

003.06F The person completes annually on or before December 31 of each calendar year in which the person participates in the IAR EVEP:

003.06F1 Six credits of IAR CE Ethics and Professional Responsibility Content offered by an Authorized Provider, including at least three hours covering the topic of ethics, and

003.06F2 Six credits of IAR CE Products and Practice Content offered by an Authorized Provider;

003.07 An individual who elects to participate in EVEP is required to complete credits required by subsection 003.06F of this rule for each calendar year that elapses after the individual’s investment adviser representative registration became ineffective regardless of when the individual elects to participate in EVEP; and

003.08 An individual who complies with the FINRA Maintaining Qualification Program under FINRA Rule 1240(c) shall be considered in compliance with subsection 003.06F2 of this rule.

003.09 The Director may require additional examinations for any individual found to have violated any state or federal securities, commodities, banking, insurance, or real estate laws.

003.10 The Director may waive the requirements of this section if the Director finds the waiver is consistent with investor protection and is in the public interest.

004 RENEWAL .

004.01 All investment adviser representative registrations automatically expire annually on December 31. An investment adviser’s registration must be renewed on or prior to that date.

004.02 The application for renewal of registration as an investment adviser representative pursuant to Section 8-1103(5) of the Act shall be filed as directed in Section 008 below, and contain the following information:

004.02A Amendments (if any) to the investment adviser representative’s Form U4;

004.02B A copy of Form ADV Part 2B supplement for the investment adviser representative;

004.02B1 An investment adviser representative affiliated with a federal covered adviser is responsible for ensuring that the Form ADV Part 2B is filed with the Director.

004.02C A fee in the amount of forty dollars ($40.00); and

004.02D Any other information the Director may require.

005 CONTINUING EDUCATION

005.01 All investment adviser representative must complete the following continuing education requirements each reporting period:

005.01A Ethics and Professional Responsibility Requirement. An investment adviser representative must complete six credits of regulatory and ethics content offered by an authorized provider, with at least three hours covering the topic of ethics; and

005.01B Products and Practice Requirement. An investment adviser representative must complete six credits of products and practice content offered by an authorized provider.

005.02 Agent of FINRA-Registered Broker-Dealer Compliance. An investment adviser representative who is also registered as an agent of a FINRA member broker-dealer and who complies with FINRA’s continuing education requirements is considered to be in compliance with the subsection 005.01B above for each applicable reporting period so long as FINRA continuing education content meets all of the following baseline criteria as determined by NASAA.

005.02A The continuing education content focuses on compliance, regulatory, ethical, and sales practices standards.

005.02B The continuing education content is derived from state and federal investment advisory statutes, rules and regulations, securities industry rules and regulations, and accepted standards and practices in the financial services industry.

005.02C The continuing education content requires that its participants demonstrate proficiency in the subject matter of the educational materials.

005.03 Credentialing Organization Continuing Education Compliance. Credits of continuing education completed by an investment adviser representative who was awarded and currently holds a credential that qualifies for an examination waiver under Section 004, above, comply with subdivisions 005.01A and 005.01B, above, provided all of the following are true:

005.03A The investment adviser representative completes the credits of continuing education as a condition of maintaining the credential for the relevant reporting period.

005.03B The credits of continuing education completed during the relevant reporting period by the investment adviser representative are mandatory to maintain the credential.

005.03C The continuing education content provided by the credentialing organization during the relevant reporting period is approved continuing education content.

005.04 Continuing Education Reporting. Every investment adviser representative is responsible for ensuring that the authorized provider reports the investment adviser representative’s completion of the applicable continuing education requirements.

005.05 No Carry-Forward. An investment adviser representative who completes credits of continuing education in excess of the amount required for the reporting period may not carry forward excess credits to a subsequent reporting period.

005.06 Failure to Complete or Report. An investment adviser representative who fails to comply with this rule by the end of a reporting period will renew as “CE Inactive” at the close of the calendar year in this state until the investment adviser representative completes and reports all required IAR continuing education Credits for all reporting periods as required by this rule. An investment adviser who is CE inactive at the close of the next calendar year is not eligible for investment adviser representative registration or renewal of an investment adviser representative registration.

005.07 Discretionary Waiver by the Director. The Director may, in his or her discretion, waive any requirements of this rule.

005.08 Home State. An investment adviser representative registered or required to be registered in this state who is registered as an investment adviser representative in the individual’s home state is deemed to be in compliance with this rule provided that both of the following are true:

005.08A The investment adviser representative’s home state has continuing education requirements that are at least as stringent as the requirements of this Section.

005.08B The investment adviser representative is in compliance with the home state’s investment adviser representative continuing education requirements.

005.09 Unregistered Periods. An investment adviser representative who was previously registered under the Act and became unregistered must complete IAR continuing education for all reporting periods that occurred between the time that the investment adviser representative became unregistered and when the person became registered again under the Act unless the investment adviser representative takes and passes the examination or receives an examination waiver as required by Section 4, above, in connection with the subsequent application for registration.

005.10 For purposes of this section:

005.10A “Approved Continuing Education Content” means the materials, written, oral, or otherwise that have been approved by NASAA or its designee and which make up the educational program provided to an investment adviser representative under this rule.

005.10B “Authorized Provider” means a person that NASAA or its designee has authorized to provide continuing education content required by this rule.

005.10C “Credit” means a unit that has been designated by NASAA or its designee as at least 50 minutes of educational instruction.

005.10D “Ethics and Professional Responsibility Content” means Approved Continuing Education Content that addresses an investment adviser representative’s ethical and regulatory obligations.

005.10E “FINRA” means the Financial Industry Regulatory Authority.

005.10F “Home State” means the state in which the investment adviser representative has its principal office and place of business.

005.10G “NASAA” means the North American Securities Administrators Association or a committee designated by its Board of Directors.

005.10H “Products and Practice Content” means Approved Continuing Education Content that addresses an investment adviser representative’s continuing skills and knowledge regarding financial products, investment features, and practices in the investment advisory industry.

005.10I “Reporting Period” means one twelve-month period as determined by NASAA. An investment adviser representative’s initial Reporting Period with this state commences the first day of the first full Reporting Period after the individual is registered or required to be registered with this state.

006 AMENDMENT OF DOCUMENTS .

006.01 If the information contained in any document filed with the Director is or becomes inaccurate or incomplete in any material respect, the investment adviser representative shall file a correcting amendment.

006.02 Any amendment required by this Section for an investment adviser representative shall be made on Form U4 in the manner prescribed by that form, or as otherwise designated by the Director.

006.03 All amendments shall be filed as directed in Section 008, below.

007 WITHDRAWAL . The application for withdrawal of registration as an investment adviser representative pursuant to Section 8-1103(9)(d) of the Act shall be filed upon Form U5, Uniform Notice of Withdrawal of Securities Industry Registration, as directed in Section 008, below.

008 DUAL REGISTRATION . Registration as an investment adviser representative with more than one investment adviser or federal covered adviser at the same time is prohibited except when the investment adviser representative is in the process of transferring his or her registration or when the investment advisers or federal covered advisers are affiliates.

008.01 Dual registration pending transfer is permitted only if the following conditions are satisfied:

008.01A The investment adviser representative’s new investment adviser or federal covered adviser notifies the Director about the transfer within seven days after the investment adviser representative’s termination with his or her former investment adviser or federal covered adviser.

008.01B The investment adviser representative’s new investment adviser or federal covered adviser submits the agent’s Form U4 to the Director within twenty-one days after the notice of termination has been submitted.

008.01C The investment adviser representative does not have a disciplinary history that must be disclosed on Form U4.

008.02 An investment adviser representative may be registered with more than one investment adviser or federal covered adviser if the investment advisers or federal covered advisers involved are affiliates.

008.02A Affiliate means a person who, directly or indirectly, controls, is controlled by, or is under common control with, another person.

008.02B For purposes of this section, control is defined as ownership, directly or beneficially, of eighty percent or more of the outstanding voting securities of another company.

009 FORMS SUBMISSION .

009.01All investment adviser representative applications, amendments, related filings and fees required to be filed with the Director pursuant to the rules promulgated under this Act, shall be filed electronically with, and transmitted to, the Central Registration Depository/Investment Advisers Registration Depository (“CRD/IARD”).

009.02 With respect to any document filed electronically through CRD/IARD, when a signature or signatures are required by the particular instructions of any filing to be made through CRD/IARD, the applicant shall affix his or her electronic signature to the filing by typing his or her name in the appropriate fields and submitting the filing to CRD/IARD. Submission of a filing in this manner constitutes irrefutable evidence of legal signature by any individuals whose names are typed on the filing.

009.03 For purposes of Section 8-1103(4)(a) of the Act, a form submitted through the CRD/IARD is deemed filed with the Director when the record is transmitted to the Director for review.

010 REGISTRATION OF INVESTMENT ADVISER REPRESENTATIVES OF FEDERAL COVERED ADVISERS . An investment adviser representative of a federal covered adviser is required to register pursuant to Neb. Rev. Stat. § 8-1103(3) only if he or she satisfies the following conditions:

010.01 The investment adviser representative has an office in Nebraska at which the investment adviser representative regularly provides, or has a location in Nebraska which the investment adviser holds out to the general public as a location at which the investment adviser representative provides, investment advisory services, solicits, meets with, or otherwise communicates with clients.

010.02 The investment adviser representative is a partner, officer, director, or other person occupying a similar status or performing similar functions, or employee of a federal covered adviser, or other person who provides investment advice on behalf of the federal covered adviser and is subject to the supervision and control of the federal covered adviser (“supervised person”) who:

010.02A Has more than five clients who are natural persons and more than ten percent of whose clients are natural persons (other than excepted persons as defined in Section 009.02C1, below); and

010.02B On a regular basis solicits, meets with, or otherwise communicates with clients of a federal covered adviser, or does not provide only “impersonal investment advice,” as defined in Section 010.02C3, below.

010.02C For purposes of this Section:

010.02C1 “Excepted person” means a natural person who immediately after entering into the investment advisory contract with the investment adviser has at least seven hundred fifty thousand dollars ($750,000.00) under management with the investment adviser, or who the investment adviser reasonably believes, immediately prior to entering into the advisory contract, has a net worth, together with assets held jointly with a spouse, at the time the contract is entered into of more than one million five hundred thousand dollars ($1,500,000.00).

010.02C2 The supervised person may rely on the definition of client in 17 C.F.R. 275.202(a)(30)-1 to identify clients for purposes of this Section, except that a supervised person need not count clients who are not residents of the United States.

010.02C3 Impersonal investment advice means investment advisory services provided by means of written material or oral statements that do not purport to meet the objectives or needs of specific individuals or accounts.

010.03 Notwithstanding Section 009.02, above, a person who solicits, offers or negotiates for the sale of, or sells, investment advisory services on behalf of a federal covered adviser shall register as an investment adviser representative even if he or she is not a supervised person.

011 BROCHURE SUPPLEMENT DELIVERY .

011.01 An investment adviser shall disclose, on the Form ADV Part 2B supplement, any alternate name under which the investment adviser representative conducts business.

011.02 An investment adviser representative of a federal covered adviser shall provide a copy of the investment adviser representative’s Form ADV Part 2B supplement in accordance with 48 NAC 7.010.

012 USING THE INTERNET FOR GENERAL DISSEMINATION OF INFORMATION ON PRODUCTS AND SERVICES . Investment adviser representatives are not deemed to be “transacting business” in this state for purposes of Section 8-1103 of the Act based solely on the use of the Internet, the worldwide web, and similar proprietary or common carrier electronic systems (hereinafter the “Internet”) to distribute information on available services through certain communications made on the Internet directed generally to anyone having access to the Internet, and transmitted through postings on bulletin boards, social networking sites, blogs or similar sites, displays on “Home Pages” or similar methods (hereinafter, “Internet Communications”) if the following conditions are observed:

012.01 The Internet Communications contain a disclosure statement in which it is clearly stated that:

012.01A The investment adviser representative in question may only transact business in this state if first registered or excluded or exempted from the investment adviser representative registration requirements of the Act; and

012.01B The investment adviser representative will not make follow-up, individualized responses to persons in this state that involve the rendering of personalized investment advice for compensation, unless the investment adviser representative has complied with, or has qualified for an applicable exemption or exclusion from, the investment adviser representative registration requirements of the Act.

012.02 The Internet Communications contain a mechanism, including and without limitation, technical “firewalls” or other implemented policies and procedures, designed reasonably to ensure that prior to any subsequent, direct communication with prospective customers or clients in this state, said investment adviser representative is first registered in this state or qualifies for an exemption or exclusion from such requirement.

012.02A Nothing in this subsection shall be construed to relieve an investment adviser representative from any applicable securities registration requirement in this state;

012.03 The Internet Communications do not involve the rendering of personalized investment advice for compensation in this state over the Internet, but is limited to the dissemination of general information on products and services.

012.04 The Internet Communications meet the following requirements:

012.04A The affiliation with the investment adviser or federal covered adviser of the investment adviser representative is disclosed, in a non-italicized font of at least ten points, within the Internet Communications;

012.04B The investment adviser or federal covered adviser with whom the investment adviser representative is associated retains responsibility for reviewing and approving the content of any Internet Communications by the investment adviser representative;

012.04C The investment adviser or federal covered adviser with whom the investment adviser representative is associated first authorizes the distribution of information on the particular products through the Internet Communications; and

012.04D In disseminating information through the Internet Communications, the investment adviser representative acts within the scope of the authority granted by the investment adviser or federal covered adviser.

013 DISHONEST OR UNETHICAL BUSINESS PRACTICES .

013.01 The conduct set forth in 48 NAC 12.005 constitutes “an act, practice or course of business which operates, or would operate, as a fraud or deceit upon another person,” for purposes of Section 8-1102(2)(b) of the Act and “dishonest or unethical business practices” for purposes of Section 8-1102(2)(d) and Section 8-1103(9)(a)(vii) of the Act by an investment adviser representative.

013.02 The delineation of certain acts and practices is not intended to be all inclusive. Acts or practices not enumerated therein may also be deemed fraudulent and dishonest.

History

Effective 2024-09-18

Chapter 10 Recordkeeping by Investment Advisers

Neb. Admin. Code tit. 48, ch. 10 Recordkeeping by Investment Advisers {#sec-48-nac-10 omnilex-key=us-ne-regs-official--title-48--48 NAC 10}

001 GENERAL .

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Section 8-1120 of the Securities Act of Nebraska(“Act”).

001.02 The Department has determined that this Rule relating to recordkeeping by investment advisers is consistent with investor protection and is in the public interest.

001.04 The definitions in 48 NAC 2 apply to the provisions of this Rule, unless otherwise specified.

002 GENERAL RECORD-KEEPING REQUIREMENTS . Every investment adviser registered or required to be registered under the Act shall make and keep true, accurate and current the following books, ledgers and records:

002.01 A journal or journals, including cash receipts and disbursements records, and any other records of original entry forming the basis of entries in any ledger.

002.02 General and auxiliary ledgers, or other comparable records, reflecting asset, liability, reserve, capital, income and expense accounts.

002.03 A memorandum of each order given by the investment adviser for the purchase or sale of any security; of any instruction received by the investment adviser from the client concerning the purchase, sale, receipt, or delivery of a particular security; and of any modification or cancellation of any such order or instruction.

002.03A Such memorandum shall identify:

002.03A1 The terms and conditions of the order, instruction, modification or cancellation;

002.03A2 The person connected with the investment adviser who recommended the transaction to the client and the person who placed such order; and

002.03A3 The account for which entered, the date of entry, and the broker-dealer or other entity by or through whom executed, where appropriate.

002.03B The memorandum shall designate whether the orders were entered pursuant to the exercise of discretionary power.

002.04 All checkbooks, bank statements, canceled checks and cash reconciliations of the investment adviser.

002.05 All bills or statements, or copies thereof, paid or unpaid, relating to the business of the investment adviser as such.

002.06 All trial balances, financial statements prepared in accordance with generally accepted accounting principles, and internal audit working papers relating to the investment adviser’s business.

002.06A For purposes of this subsection, “financial statements” shall mean a balance sheet prepared in accordance with generally accepted accounting principles, an income statement, a cash flow statement and a net capital computation, as required by 48 NAC 7.008 and 48 NAC 7.009.

002.07 Originals of all written communications received and copies of all written communications sent by the investment adviser relating to:

002.07A The recommendation made or proposed to be made and the advice given or proposed to be given;

002.07B The receipt, disbursement or delivery of funds or securities; or

002.07C The placement or execution of any order to purchase or sell any security.

002.07D The investment adviser shall not be required to keep the following written communications:

002.07D1 Unsolicited market letters and other similar communications of general public distribution not prepared by or for the investment adviser; and

002.07D2 A record of the names and addresses of the persons to whom the investment adviser sent any notice, circular or other advertisement offering any report, analysis, publication or other investment adviser service, which was sent to more than ten persons, except if such notice, circular or advertisement is distributed to persons named on any list, the investment adviser shall retain a memorandum describing the list and the source thereof with the copy of such notice, circular or advertisement.

002.08 A list or other record which identifies the accounts in which the investment adviser is vested with any discretionary power with respect to the funds, securities or transactions of any client.

002.09A copy of all powers of attorney and other evidences of the granting of any discretionary authority by any client to the investment adviser.

002.10 A copy of each written agreement entered into by the investment adviser with any client, and all other written agreements otherwise relating to the investment adviser’s business as an investment adviser.

002.11 A file containing all the information required to be retained pursuant to 275 CFR 204-2(a)(11) related to advertisements.

002.12 A record of every transaction in a security in which the investment adviser or any advisory representative of such investment adviser has, or by reason of such transaction acquires, any direct or indirect beneficial ownership.

002.12A Such record shall include:

002.12A1 The title and amount of the security involved;

002.12A2 The date and nature of the transaction, such as purchase, sale or other acquisition or disposition;

002.12A3 The price at which it was effected; and

002.12A4 The name of the broker-dealer or other entity with or through whom the transaction was effected.

002.12B Such record may contain a statement declaring that the reporting or recording of any such transaction shall not be construed as an admission that the investment adviser or advisory representative has any direct or indirect beneficial ownership in the security.

002.12C A transaction shall be recorded within ten days after the end of the calendar quarter in which the transaction was effected.

002.12D The investment adviser need not keep records required by this subsection for the following transactions:

002.12D1 Transactions effected in any account over which neither the investment adviser nor any advisory representative of the investment adviser has any direct or indirect influence or control; and

002.12D2 Transactions in securities which are direct obligations of the United States.

002.12E For purposes of this subsection, “advisory representative” shall mean:

002.12E1 An investment adviser as defined in the Act;

0012.12E2 Any partner, officer, director or limited liability company member of the investment adviser;

002.12E3 Any employee who participates in any way in the determination of which recommendations shall be made;

002.12E4 Any employee who, in connection with his or her duties, obtains any information concerning which securities are being recommended prior to the effective dissemination of such recommendations; and

002.12E5 Any person in a control relationship to the investment adviser, any affiliated person of such controlling person, and any affiliated person of such affiliated person who obtains information concerning securities recommendations being made by such investment adviser prior to the effective dissemination of such recommendations or of the information concerning such recommendations.

002.12F For purposes of this subsection and subsection 002.13, “Control” shall mean the power to exercise a controlling influence over the management or policies of a company, unless such power is solely the result of an official position with such company. Any person who owns beneficially, either directly or through one or more controlled companies, more than twenty-five percent of the voting securities of a company shall be presumed to control such company.

002.12G An investment adviser shall not be deemed to have violated the provisions of this subsection because of its failure to record securities transactions of any advisory representative if the investment adviser establishes that adequate procedures were instituted and reasonable diligence was used to promptly obtain reports of all transactions required to be recorded.

002.13 Notwithstanding the provisions of Section 002.12, above, if the investment adviser is primarily engaged in a business or businesses other than advising investment advisory clients, a record must be maintained of every transaction in a security in which the investment adviser or any advisory representative of such investment adviser has, or by reason of such transaction acquires, any direct or indirect beneficial ownership.

002.13A Such record shall include:

002.13A1 The title and amount of the security involved;

002.13A2 The date and nature of the transaction, such as purchase, sale or other acquisition or disposition;

002.13A3 The price at which it was effected; and

002.13A4 The name of the broker-dealer or other entity with or through whom the transaction was effected.

002.13B Such record may contain a statement declaring that the reporting or recording of any such transaction shall not be construed as an admission that the investment adviser or investment adviser representative has any direct or indirect beneficial ownership in the security.

002.13C A transaction shall be recorded within ten days after the end of the calendar quarter in which the transaction was effected.

002.13D The investment adviser is not required to keep records for the following transactions:

002.13D1 Transactions effected in any account over which neither the investment adviser nor advisory representative of the investment adviser has any direct or indirect influence or control; and

002.13D2 Transactions in securities which are direct obligations of the United States.

002.13E An investment adviser is “primarily engaged in a business or businesses other than advising investment advisory clients” when, for each of its most recent three fiscal years or for the period of time since organization, whichever is less, the investment adviser derived, on an unconsolidated basis, more than fifty percent of its total sales and revenues, and its income or loss before income taxes and extraordinary items, from such other business or businesses.

002.13F For purposes of this subsection, “advisory representative,” when used in connection with a company primarily engaged in a business or businesses other than advising investment advisory clients, means:

002.13F1 Any partner, officer, director, member or employee of the investment adviser:

002.13F1a Who participates in any way in the determination of which recommendation shall be made; or

002.13F1b Whose functions or duties relate to the determination of which securities are being recommended prior to the effective dissemination of such recommendations; and

002.13F2 Any person in a control relationship to the investment adviser, any affiliated person of such controlling person and any affiliated person of such affiliated person who obtains information concerning securities recommendations being made by such investment adviser prior to the effective dissemination of such recommendations or of the information concerning such recommendations.

002.13F3 An investment adviser representative.

002.13G An investment adviser shall not be deemed to have violated the provisions of this subsection because of its failure to record securities transactions of any investment adviser representative if the investment adviser establishes that it instituted adequate procedures and used reasonable diligence to obtain reports of all transactions required to be recorded.

002.14 A copy of each written statement, including supplements for each investment adviser representative, and each amendment or revision, given or sent to any client or prospective client of the investment adviser in accordance with the provisions of 48 NAC 7.010, and a record of the dates that each written statement, and each amendment or revision, was given, or offered to be given, to any client or prospective client who subsequently becomes a client.

002.15 For each client that was obtained by the investment adviser by means of a solicitor to whom a cash fee was paid by the investment adviser:

002.15A Evidence of a written agreement to which the investment adviser is a party related to the payment of such fee;

002.15B A signed and dated acknowledgment of receipt from the client evidencing the client’s receipt of the investment adviser’s disclosure statement and a written disclosure statement of the solicitor; and,

002.15C A copy of the solicitor’s written disclosure statement.

002.15D For purposes of this subsection, the term “solicitor” shall mean any person or entity who, for compensation, acts as an agent of an investment adviser in referring potential clients.

002.16 All accounts, books, internal working papers, and any other records or documents that are necessary to form the basis for, or demonstrate the calculation of, the performance or rate of return of all managed accounts or of securities recommendations in any notice, circular, advertisement, newspaper article, investment letter, bulletin, or other communication, including, but not limited to, electronic media that the investment adviser circulates or distributes, directly or indirectly, to two or more persons, other than persons affiliated with such investment adviser.

002.16A With respect to the performance of managed accounts, the retention of all account statements, which reflect all debits, credits, and other transactions in a client’s account for the period of the statement, and all worksheets necessary to demonstrate the calculation of the performance or rate of return of all managed accounts shall be deemed to satisfy the requirements of this subsection.

002.16B For purposes of this subsection, persons affiliated with an investment adviser include any officer, director, managing member, general partner, or employee of the investment adviser, and individuals registered as its investment adviser representatives.

002.17 A file containing a copy of all written communications received or sent regarding any litigation involving the investment adviser or any investment adviser representative or employee, and regarding any written customer or client complaint.

002.18 Written information about each investment advisory client that is the basis for making any recommendation or providing any investment advice to such client.

002.19 Written procedures to supervise the activities of employees and investment adviser representatives that are reasonably designed to achieve compliance with applicable securities laws and regulations.

002.20 A file containing a copy of each document, other than any notices of general dissemination, that was filed with or received from any state or federal agency or self-regulatory organization and that pertains to the registrant or its advisory representatives as that term is defined in Section 002.12E of this Rule, which file should contain, but is not limited to, all applications, amendments, renewal filings, and correspondence.

002.21 Copies, with original signatures of the investment adviser’s appropriate signatory and the investment adviser representative, of each initial Uniform Application for Securities Industry Registration or Transfer (Form U4) and each amendment to Disclosure Reporting Pages must be retained by the investment adviser, filing on behalf of the investment adviser representative, and must be made available for inspection upon regulatory request.

002.22 An investment adviser who inadvertently holds or obtains securities or funds of a client, and who returns such securities or funds to the client within three business days of receiving them or forwards checks drawn by clients and made payable to third parties within three business days of receipt, will not be considered as having custody but shall keep a ledger or other listing of all securities or funds held or obtained, relating to the inadvertent custody, which ledger shall include the name of the issuer of the securities; the type of security and series; the date of issue of the securities; the denomination, interest rate and maturity date of any debt instruments; the certificate number, including alphabetical prefix or suffix; the name in which the security is registered; the date given to the adviser; the date sent to client or sender; the form of delivery to client or sender, or copy of the form of delivery to client or sender; the mail confirmation number, if applicable, or confirmation by client or sender of the fund’s or security’s return; and the date that each check was received by the adviser.

002.23 If an investment adviser obtains possession of securities that are acquired from the issuer in a transaction or chain of transactions not involving any public offering that comply with the exception from custody under 48 NAC 7.012.02B, the adviser shall keep the following records;

002.23A A record showing the issuer or current transfer agent’s name, address, telephone number and other applicable contract information pertaining to the party responsible for recording client interests in the securities; and

002.23B A copy of any legend, shareholder agreement or other agreement showing that those securities that are transferable only with prior consent of the issuer or holders of the outstanding securities of the issuer.

002.24 A copy of the following:

002.24A The investment adviser's Physical Security and Cybersecurity Policies and Procedures and Privacy Policy pursuant to 48 NAC 07.18. In addition to the investment adviser’s recordkeeping requirements pursuant to Sections 003.06 and 003.07, below, the investment adviser must maintain a current copy of these policies and procedures either in hard copy in a separate location or stored on electronic storage media that is separate from and not dependent upon access to the investment adviser’s computers or a network;

002.24B All records documenting the investment adviser's compliance with 48 NAC 07.18 including, but not limited to, evidence of the annual review of the policies and procedures;

002.24C A record of any violation of 48 NAC 07.18, and of any action taken as a result of the violation.

003 RECORDKEEPING BY INVESTMENT ADVISERS WITH CUSTODY OF CLIENT SECURITIES OR FUNDS . In addition to the records required by Section 002, above, an investment adviser which has custody or possession of securities or funds of any client as that term is defined in 48 NAC 7.012.04B shall be required to make and keep the following records:

003.01 A copy of any and all documents executed by the client, including a limited power of attorney, under which the adviser is authorized or permitted to withdraw a client’s funds or securities maintained with a custodian upon the adviser’s instruction to the custodian.

003.02 A journal or other record showing all purchases, sales, receipts and deliveries of securities, including certificate numbers, for all accounts and all other debits and credits to the accounts.

003.03 A separate ledger account for each client showing all purchases, sales, receipts, and deliveries of securities, the date and price of each such purchase and sale, and all debits and credits.

003.04 Copies of confirmations of all transactions effected by or for the account of any such client.

003.05 A record for each security in which any client has an interest, showing the name of each client having any interest in that security, the amount or interest of each client, and the location of that security.

003.06 A copy of each of the client’s quarterly account statements, as generated and delivered by the qualified custodian. If the investment adviser also generates a statement that is delivered to the client, the investment adviser shall also maintain copies of such statements along with the date such statements were sent to the clients.

003.07 If applicable to the investment adviser’s situation, a copy of the special examination report verifying the completion of the examination by an independent certified public accountant and describing the nature and extent of the examination.

003.08 A record of any finding by the independent certified public accountant of any material discrepancies found during the examination.

003.09 If applicable, evidence of the client’s designation of an independent representative.

003.10 If an investment adviser has custody because it advises a pooled investment vehicle, as defined in 48 NAC 7.012.04B1c, the investment adviser shall also keep the following records:

003.10A True, accurate and current account statements;

003.10B Where the adviser complies with 48 NAC 7.012.02D the records required to be made and kept shall include:

003.10B1 The date(s) of the audit;

003.10B2 A copy of the audited financial statements; and

003.10B3 Evidence of the mailing of the audited financial statements to all limited partners, members or other beneficial owners within one hundred twenty days of the end of its fiscal year.

004 RECORDKEEPING BY INVESTMENT ADVISERS WHICH RENDER INVESTMENT SUPERVISORY OR MANAGEMENT SERVICES . In addition to the records required by Section 002, above, an investment adviser which renders any investment supervisory or management service to any client shall, to the extent the information is reasonably available to or obtainable by the investment adviser, make and keep true, accurate and current the following records with respect to each portfolio being supervised or managed:

004.01 Separate records for each client showing the securities purchased and sold, and the date, amount and price of each such purchase and sale; and

004.02 For each security in which any client has a current position, records from which the investment adviser can promptly furnish the name of the client, and the current amount or interest of the client.

004.03 For purposes of this subsection, “investment supervisory services” means the giving of continuous advice as to the investment of funds on the basis of the individual needs of each client; and “discretionary power” shall not include discretion as to the price at which or the time when a transaction is or is to be effected, if, before the order is given by the investment adviser, the client has directed or approved the purchase or sale of a definite amount of the particular security.

005 CLIENT IDENTITY . Any books or records required by this Rule may be maintained by the investment adviser in such manner that the identity of any client to whom the investment adviser renders investment supervisory services is indicated by numerical or alphabetical code or some similar designation.

006 RETENTION .

006.01 All books and records required by this Rule, except for books and records required by the provisions of subsections 002.11 and 002.16, above, shall be maintained and preserved in an easily accessible place for a period of not less than five years from the end of the fiscal year during which the last entry was made on such record, the first two years in the principal office of the investment adviser.

006.02 Partnership articles and any amendments, articles of incorporation, and charters, minute books, and stock certificate books of the investment adviser, and of any predecessor, shall be maintained in the principal office of the investment adviser and preserved until at least three years after termination of the enterprise.

006.03 Books and records required by subsections 002.11 and 002.16, above, shall be maintained and preserved in an easily accessible location for a period of not less than five years, the first two years in the principal office of the investment adviser, from the end of the fiscal year during which the investment adviser last published or otherwise disseminated, directly or indirectly, the notice, circular, advertisement, newspaper article, investment letter, bulletin, or other communication, including by electronic media.

006.04 Books and records required to be made under the provisions of subsections 002.17 to 002.22, above, inclusive, shall be maintained and preserved in an easily accessible place for a period of not less than five years from the end of the fiscal year during which the last entry was made on such record, the first two years in the principal office of the investment adviser, or for the time period during which the investment adviser was registered or required to be registered in the state, if less.

006.05 Notwithstanding other record preservation requirements of this Rule, the following records or copies shall be required to be maintained at the business location of the investment adviser from which the customer or client is being provided or has been provided with investment advisory services: (A) the records required to be preserved under Subsections 002.03, 002.07 through 002.10, 002.14, 002.15, and 002.17 through002.19. and Subsections003 and 004 inclusive, above, and (B) the records or copies required under the provision of Subsections 002.11and 002.16, above, which records or related records identify the name of the investment adviser representative providing investment advice from that business location, or which identify the business location’s physical address, mailing address, electronic mailing address, or telephone number. The records shall be maintained for the period described in this subsection.

007 PERSERVATION OF BOOKS AND RECORDS . Before ceasing to conduct business as an investment adviser, an investment adviser shall arrange for and be responsible for preserving the books and records required to be maintained and preserved under this Rule for the remainder of the period specified therein and shall notify the Director in writing of the exact address where such books and records will be maintained during such period.

008 PRODUCTION OF BOOKS AND RECORDS . The records required to be maintained and preserved pursuant to this Rule shall be immediately produced or reproduced by an investment adviser.

008.01 Such records may be maintained and preserved for the required time by an investment adviser on:

008.01A Paper or hard copy form, as those records are kept in their original form; or

008.01B Micrographic media, including microfilm, microfiche, or any similar medium; or

008.01C Electronic storage media, including any digital storage medium or system that meets the terms of this section.

008.02 The investment adviser must:

008.02A Arrange and index the records in a way that permits easy location, access, and retrieval of any particular record;

008.02B Provide promptly any of the following that the Director, including his or her examiners or other representatives, may request:

008.02B1 A legible, true, and complete copy of the record in the medium and format in which it is stored;

008.02B2 A legible, true, and complete printout of the record; and

008.02B3 Means to access, view, and print the records; and

008.02C Separately store, for the time required for preservation of the original record, a duplicate copy of the record on any medium allowed by this section.

008.03 In the case of records created or maintained on electronic storage media, the investment adviser must establish and maintain procedures:

008.03A To maintain and preserve the records, so as to reasonably safeguard them from loss, alteration, or destruction;

008.03B To limit access to the records to properly authorized personnel and the Director, including his or her examiners and other representatives; and

008.03C To reasonably ensure that any reproduction of a non-electronic original record on electronic storage media is complete, true, and legible when retrieved.

008.04 Any book or other record made, kept, maintained and preserved in compliance with Rules 17a-3 [17 C.F.R. 240.17a-3] and 17a-4 [17 C.F.R. 240.17a-4] under the Securities Exchange Act of 1934,which is substantially the same as the book or other record required to be made, kept, maintained and preserved under this Rule, shall be deemed to be made, kept, maintained and preserved in compliance with this Rule.

009 EXCEPTIONS . The provisions of this Rule shall not apply to any investment adviser whose principal place of business is not located in this state provided:

009.01 Such investment adviser is registered in the state in which its principal place of business is located; and

009.02 Such investment adviser is in compliance with the recordkeeping requirements established by the state in which its principal place of business is located.

009.03 For purposes of this Section, principal place of business shall mean the executive office of the investment adviser from which the officers, partners, or managers of the investment adviser direct, control, and coordinate the activities of the investment adviser

History

Effective 2022-06-13

Chapter 11 Performance Based Compensation

Neb. Admin. Code tit. 48, ch. 11 Performance Based Compensation {#sec-48-nac-11 omnilex-key=us-ne-regs-official--title-48--48 NAC 11}

001 GENERAL .

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Section 8-1102(3) and Section 8-1120(3) of the Securities Act of Nebraska (“Act”).

001.02 The Department has determined that this Rule relating to performance based compensation for investment advisers and investment adviser representatives is consistent with investor protection and is in the public interest.

001.03 The Director may, on a case by case basis, and with prior written notice to the affected parties, require adherence to additional standards or policies, as deemed necessary in the public interest.

001.04 The definitions in 48 NAC 2 shall apply to the provisions of this Rule, unless otherwise specified.

001.05 Federal statutes and rules of the Securities and Exchange Commission (“SEC”) or the Financial Industry Regulatory Authority (“FINRA”) referenced herein shall mean those statutes and rules as amended on or before the effective date of this Rule. A copy of the applicable statutes or rules referenced in this Chapter is attached hereto.

002 REQUIREMENT . Notwithstanding the provisions of Section 8-1102(3)(a), an investment adviser may enter into, perform, renew or extend an investment advisory contract that provides for compensation to the investment adviser on the basis of a share of the capital gains upon, or the capital appreciation of, the funds, or any portion of the funds, of a client, if:

002.01 The investment adviser is not registered and is not required to be registered pursuant to Section 8-1103(2) of the Act; or

002.02 The following conditions are met:

002.02A The client entering into the contract is a “qualified client”, as defined by Rule 205-3 under the Investment Advisers Act of 1940 (17 C.F.R. §275.205-3); and

002.02B To the extent not otherwise disclosed on Uniform Application for Investment Adviser Registration, Form ADV Part 2, the investment adviser must disclose in writing to the client all material information concerning the proposed advisory arrangement, including the following:

002.02B1 That the fee arrangement may create an incentive for the investment adviser to make investments that are riskier or more speculative than would be the case in the absence of a performance fee;

002.02B2 Where relevant, that the investment adviser may receive increased compensation with regard to unrealized appreciation as well as realized gains in the client’s account;

002.02B3 The periods which will be used to measure investment performance throughout the contract and their significance in the computation of the fee;

002.02B4 The nature of any index which will be used as a comparative measure of investment performance, the significance of the index, and the reason the investment adviser believes that the index is appropriate; and

002.02B5 Where the investment adviser’s compensation is based in part on the unrealized appreciation of securities for which market quotations are not readily available within the meaning of Rule 2a-4(a)(1) under the Investment Company Act of 1940, 17 C.F.R. 270.2a-4(a)(1), how the securities will be valued and the extent to which the valuation will be independently determined.

003 IDENTIFICATION OF THE CLIENT . In the case of a private investment company, as defined in Section 005.02 below, an investment company registered under the Investment Company Act of 1940, or a business development company, as defined in section 202(a)(22) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(22)), each equity owner of any such company (except for the investment adviser entering into the contract and any other equity owners not charged a fee on the basis of a share of capital gains or capital appreciation) will be considered a client for purposes of Section 002 of this Rule.

004 TRANSITION RULE .

004.01 If an investment adviser entered into a contract and satisfied the conditions of this Rule that were in effect when the contract was entered into, the adviser will be considered to satisfy the conditions of this Rule; provided, however, that if a natural person or company who was not a party to the contract becomes a party, including an equity owner of a private investment company advised by the adviser, the conditions of this Rule in effect when the person or company becomes a party to the contract will apply with regard to that person or company.

004.02 If an investment adviser was not required to register pursuant to Section 8-1103(2) of the Act and was not registered, Section 8-1102(3)(a) of the Act shall not apply to an advisory contract entered into when the investment adviser was not required to register and was not registered; provided, however, that the investment adviser was in compliance with all rules and regulations regarding performance based compensation in any jurisdiction in which the investment adviser was registered or required to be registered at the time of entering into the advisory contract.

004.03 Solely for purposes of this section, a transfer of an equity ownership interest in a private investment company by gift or bequest, or pursuant to an agreement related to a legal separation or divorce, will not cause the transferee to “become a party” to the contract, and will not cause Section 8-1102(3)(a) of the Act to apply to such transferee.

005 DEFINITIONS . For the purposes of this Rule:

005.01 The term “company” has the same meaning as in section 202(a)(5) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(5)), but does not include a company that is required to be registered under the Investment Company Act of 1940 but is not registered.

005.02 The term “private investment company” means a company that would be defined as an investment company under section 3(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-3(a)) but for the exception provided from that definition by section 3(c)(1) of such Act (15 U.S.C. 80a-3(c)(1)).

006 Nothing in the Rule, or the amendment of any previous rule regarding performance based compensation, shall be construed to alter the obligation of an investment adviser, as a fiduciary, to deal fairly with its clients and to make full and fair disclosure of its compensation arrangements, including disclosure of all material information regarding a proposed performance fee arrangement as well as any material conflicts posed by this arrangement.

History

Effective 2017-06-05

Chapter 12 Fraudulent, Dishonest and Unethical Business Practices

Neb. Admin. Code tit. 48, ch. 12 Fraudulent, Dishonest and Unethical Business Practices {#sec-48-nac-12 omnilex-key=us-ne-regs-official--title-48--48 NAC 12}

001 GENERAL .

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Section 8-1120 of the Securities Act of Nebraska(“Act”).

001.02 The Director has determined that this Rule relating to unethical and fraudulent business practices by broker-dealers, agents, investment advisers, federal covered advisers, and investment adviser representatives is consistent with investor protection and is in the public interest.

001.04 The definitions in 48 NAC 2 apply to the provisions of this Rule, unless otherwise specified.

001.05 The delineation in this Rule of certain acts and practices is not intended to be all inclusive. Acts or practices not enumerated herein may also be deemed fraudulent or dishonest.

001.06 Federal statutes and rules of the Securities and Exchange Commission (“SEC”) or the Financial Industry Regulatory Authority (“FINRA”) referenced herein means those statutes and rules as amended on or before the effective date of this Rule. A copy of the statutes or rules referenced in this Rule is available as an appendix to this rule at https://ndbf.nebraska.gov/about/legal/administrative-rules-and-regulations.

002 FRAUDULENT PRACTICES OF BROKER-DEALERS AND AGENTS. A broker- dealer or agent who engages in one or more of the following practices shall be deemed to have engaged in an “act, practice, or course of business which operates or would operate as a fraud” as used in Section 8-1102(1)(c) of the Act:

002.01 Entering into a transaction with a customer in any security at an unreasonable price, or at a price not reasonably related to the current market price of the security, or receiving an unreasonable commission or profit.

002.02 Contradicting or negating the importance of any information contained in a prospectus or other offering materials with intent to deceive or mislead, or using any advertising or sales presentation in a deceptive or misleading manner.

002.03 In connection with the offer, sale, or purchase of a security, falsely leading a customer to believe that the broker-dealer or agent is in possession of material, non-public information which would impact on the value of the security.

002.04 In connection with the solicitation of a sale or purchase of a security, engaging in a pattern or practice of making contradictory recommendations to different investors of similar investment objectives for some to sell and others to purchase the same security, at or about the same time, when not justified by the particular circumstance of each investor.

002.05 Failing to make a bonafide public offering of all the securities allotted to a broker-dealer for distribution by, among other things,(1) transferring securities to a customer, another broker-dealer or a fictitious account with the understanding that those securities will be returned to the broker-dealer or its nominees, or (2) “parking” or withholding securities.

002.06 Failing to disclose the firm’s present bid and ask price of a particular security at the time of solicitation, and the firm’s bid and ask price at the time of execution of the written confirmation.

002.07 In connection with the solicitation of a purchase or sale of over the counter (“OTC”) unlisted non-Nasdaq equity securities, failing to advise the customer, both at the time of solicitation and on the written confirmation, of any and all compensation related to the specific securities transaction which is to be paid to the agent, including commissions, sales charges, or concessions.

002.08 In connection with a principal transaction, failing to disclose, both at the time of solicitation and on the written confirmation, a short inventory position in the firm’s account of more than five percent of the issued and outstanding shares of that class of securities of the issuer, provided that this subsection applies only if the firm is a market maker at the time of the solicitation.

002.09 Conducting sales contests in a particular security.

002.10 After a solicited purchase by a customer, failing or refusing, in connection with a principal transaction, to promptly execute sell orders.

002.11 Soliciting a secondary market transaction when there has not been a bonafide distribution in the primary market.

002.12 Engaging in a pattern of compensating an agent in different amounts for effecting contemporaneous sales and purchases in the same security.

002.13 Effecting any transaction in, or inducing the purchase or sale of, any security by means of any manipulative, deceptive or fraudulent device, practice, plan, program, design or contrivance, which may include, but not be limited to:

002.13A Effecting any transaction in a security which involves no change in the beneficial ownership thereof.

002.13B Entering an order or orders for the purchase or sale of any security with the knowledge that an order or orders of substantially the same size, at substantially the same time and substantially the same price, for the sale of any such security, has been, or will be, entered by or for the same or different parties for the purpose of creating a false or misleading appearance of active trading in the security or a false or misleading appearance with respect to the market for the security. Nothing in this subsection prohibits a broker-dealer from entering bonafide agency cross transactions for its customers.

002.13C Effecting, alone or with one or more other persons, a series of transactions in any security creating actual or apparent active trading in such security or raising or depressing the price of such security, for the purpose of inducing the purchase or sale of such security by others.

002.14 Failing to furnish to a customer purchasing securities in an offering, no later than the due date of confirmation of the transaction, either a final prospectus or a preliminary prospectus and any additional document, which together include all information set forth in the final prospectus.

002.15 Recommending to a customer the purchase, sale or exchange of any security without reasonable grounds to believe that such transaction or recommendation is suitable for the customer based upon reasonable inquiry concerning the customer’s investment objectives, financial situation and needs, and any other relevant information known by the broker-dealer.

002.16 Representing that a market will be established, or that securities will be subject to an increase in value.

002.17 Engaging in unreasonable and/or unjustifiable delays in the delivery of securities purchased by any of its customers and/or in the payment upon request of free credit balances reflecting completed transactions of any of its customers.

002.18 In connection with the solicitation of a purchase of a designated security:

002.18A Failing to disclose to the customer the bid and ask price, at which the broker-dealer effects transactions with individual, retail customers, of the designated security as well as its spread in both percentage and dollar amounts at the time of solicitation and on the trade confirmation documents; or

002.18B Failing to include with the confirmation a written explanation of the bid and ask price.

002.18C The following transactions shall be exempt from the requirements of this subsection:

002.18C1 Transactions in which the price of the designated security is five dollars ($5.00) or more, exclusive of costs or charges; provided, however, that if the designated security is a unit composed of one or more securities, the unit price divided by the number of components of the unit other than warrants, options, rights, or similar securities must be five dollars ($5.00) or more, and any component of the unit that is a warrant, option, right, or similar security, or a convertible security must have an exercise price or conversion price of five dollars ($5.00) or more; 3

002.18C2 Transactions that are not recommended by the broker-dealer or agent;

002.18C3 Transactions by a broker-dealer:

002.18C3a Whose commissions, commission equivalents, and mark-ups from transactions in designated securities during each of the immediately preceding three months, and during eleven or more of the preceding twelve months, did not exceed five percent of its total commissions, commission-equivalents, and mark-ups from transactions in securities during those months; and

002.18C3b Who has not executed principal transactions in connection with the solicitation to purchase the designated security that is the subject of the transaction in the immediately preceding twelve months.

002.18C4 Any transaction or transactions that, upon prior written request or upon his or her own motion, the Director conditionally or unconditionally exempts as not encompassed within the purposes of this Section.

002.18D For purposes of this Section, the term “designated security” means any equity security other than a security:

002.18D1 Registered, or approved for registration upon notice of issuance, on a national securities exchange, and the issuer of which makes transaction reports available pursuant to 17 CFR 242.601;

002.18D2 Authorized, or approved for authorization upon notice of issuance, for quotation in the Nasdaq Stock Market;

002.18D3 Issued by an investment company registered under the Investment Company Act of 1940;

002.18D4 That is a put option or call option issued by The Options Clearing Corporation; or

002.18D5 Issued by a company which has net tangible assets in excess of four million dollars ($4,000,000.00) as demonstrated by financial statements dated less than fifteen months previously that the broker-dealer has reviewed and has a reasonable basis to believe are true and complete in relation to the date of the transaction with the person, and are:

002.18D5a The most recent financial statements of the issuer, other than a foreign private issuer, that have been audited and reported on by an independent public accountant in accordance with the provisions of 17 CFR 210.2-02; or

002.18D5b The most recent financial statements of the foreign private issuer that have been filed with the SEC; furnished to the SEC pursuant to 17 CFR 240.12g3-2(b); or prepared in accordance with generally accepted accounting principles in the country of incorporation, audited in compliance with the requirements of that jurisdiction, and reported on by an accountant duly registered and in good standing in accordance with the regulations of that jurisdiction.

002.19 Inducing trading in a customer’s account which is excessive in size or frequency in view of the financial resources and character of the account.

002.20 Executing a transaction on behalf of a customer without authorization to do so.

002.21 Exercising any discretionary power in effecting a transaction for a customer’s account without first obtaining written discretionary authority from the customer, unless the discretionary power relates solely to the time and/or price for the executing of orders.

002.22 Executing any transaction in a margin account without securing from the customer a properly executed written margin agreement promptly after the initial transaction in the account.

002.23 Failing to segregate customers’ free securities or securities held in safekeeping.

002.24 Charging unreasonable and inequitable fees for services performed, including miscellaneous services such as collection of monies due for principal, dividends or interest, exchange or transfer of securities, appraisals, safekeeping, or custody of securities and other services related to its securities business.

002.25 Offering to buy from, or to sell to, any person any security at a stated price unless such broker-dealer is prepared to purchase or sell, as the case may be, at such price and under such conditions as are stated at the time of such offer to buy or sell.

002.26 Representing that a security is being offered to a customer “at the market” or a price relevant to the market price unless the broker-dealer knows or has reasonable grounds to believe that a market for the security exists other than that made, created or controlled by the broker-dealer, or by a person the broker-dealer is acting or with whom the broker-dealer is associated in such distribution, or any person controlled by, controlling or under common control with, the broker-dealer.

002.27 Guaranteeing a customer against loss in any securities account of such customer carried by the broker-dealer or in any securities transaction effected by the broker-dealer or in any securities transaction effected by the broker-dealer with or for such customer.

002.28 Publishing or circulating, or causing to be published or circulated, any notice, circular, advertisement, newspaper article, investment service, or communication of any kind which purports to report any transaction as a purchase or sale of any security unless such broker-dealer believes that such transaction was a bonafide purchase or sale or such security; or which purports to quote the bid price or asked price for any security, unless such broker-dealer believes that such quotation represents a bonafide bid for, or offer of, such security.

002.29 Failing to disclose that the broker-dealer is controlled by, controlling, affiliated with or under common control with, the issuer of any security before entering into any contract with or for a customer for the purchase or sale of such security, the existence of such control to such customer, and if such disclosure is not made in writing, it shall be supplemented by the giving or sending of written disclosure at or before the completion of the transaction.

002.30 Failing or refusing to furnish a customer, upon reasonable request, information to which the customer is entitled, or to respond to a formal written request or complaint.

002.31 Failing to pay and fully satisfy any final judgment or arbitration award, resulting from an investment-related, customer-initiated arbitration or court proceeding, unless alternative payment arrangements are agreed to between the customer and the broker-dealer or agent, in writing, and the broker-dealer or agent complies with the terms of the alternative payment arrangement.

002.32 Attempting to avoid payment of any final judgment or arbitration award resulting from an investment-related, customer-initiated arbitration or court proceeding, unless alternative payment arrangements are agreed to between the customer and the broker-dealer or agent, in writing, and the broker-dealer or agent complies with the terms of the alternative payment arrangements.

002.33 Failing to pay and fully satisfy any fine, civil penalty, order of restitution, order of disgorgement, or similar monetary payment obligation imposed upon the broker-dealer or agent by the Securities and Exchange Commission, the securities or other financial services regulator of any state or province, or any self-regulatory organization.

003 UNETHICAL PRACTICES FOR BROKER-DEALERS, ISSUER-DEALERS, AND AGENTS . A broker-dealer, issuer-dealer or agent who engages in one or more of the following practices shall be deemed to have engaged in a “dishonest or unethical practice” as used in Section 8-1103(9)(a)(vii) of the Act:

003.01 Any acts or practices enumerated in Section 002, above.

003.02 In connection with the solicitation of a sale or purchase of an Over the Counter (“OTC”), unlisted, non-Nasdaq security, failing to promptly provide the most current prospectus or the most recent periodic report filed under Section 13 of the Securities Exchange Act of 1934, 15 U.S.C. 78m, when requested to do so by a customer.

003.03 Marking any order tickets or confirmations as unsolicited when in fact the transaction was solicited.

003.04 Failing to provide documentation of unsolicited sales to the Department upon request, pursuant to 48 NAC 14.

003.05 Failing to provide each customer with a statement of account which, with respect to all OTC non-Nasdaq equity securities in the account, contains a value for each such security based on the closing market bid on a date certain.

003.05A This statement must cover any month in which activity has occurred in a customer’s account, but in no event shall be provided less than every three months.

003.05B This subsection applies only if the firm has been a market maker in such security at any time during the month in which the monthly or quarterly statement is issued.

003.06 Failing to comply with any applicable provision of fair practice or ethical rules and/or standards promulgated by the SEC, FINRA or by a self-regulatory organization approved by the SEC.

003.07 Failing to cooperate with, or providing false or incomplete information to, the Director in connection with an investigation or inquiry.

004 DISHONEST AND UNETHICAL PRACTICES FOR BROKER-DEALERS AND AGENTS IN CONNECTION WITH THE SALE OF INVESTMENT COMPANY SECURITIES . A broker-dealer or agent who engages in one or more of the following practices shall be deemed to have engaged in “dishonest or unethical practices in the securities business” as used in Section 8-1103(9)(a)(vii) of the Act:

004.01 Sales Load Communications.

004.01A In connection with the offer or sale of investment company shares, failing to adequately disclose to a customer all sales charges, including asset based and contingent deferred sales charges, which may be imposed with respect to the purchase, retention or redemption of such shares.

004.01B In connection with the solicitation of investment company shares, stating or implying to a customer that the shares are sold without a commission, are “no load” or have “no sales charge” if there is associated with the purchase of the shares a front-end load, a contingent deferred sales load, a SEC Rule 12b-1 fee, 17 CFR 270.12b-1, or a service fee which exceeds one-quarter of one percent of average net fund assets per year, or in the case of closed-end investment company shares, underwriting fees, commissions or other offering expenses.

004.01C In connection with the solicitation of investment company shares, failing to disclose to a customer any relevant:

004.01C1 Sales charge discount on the purchase of shares in dollar amounts at or above a breakpoint; or

004.01C2 Letter of intent feature, if available, which will reduce the sales charges to the customer.

004.01D In connection with the solicitation of investment company shares, recommending to a customer the purchase of a specific class of investment company shares in connection with a multi-class sales charge or fee arrangement without reasonable grounds to believe that the sales charge or fee arrangement associated with such class of shares is suitable and appropriate based on the customer’s investment objectives, financial situation and other securities holdings, and the associated transaction or other fees.

004.02 Recommendations.

004.02A In connection with the solicitation of investment company shares, recommending to a customer the purchase of investment company shares which results in the customer simultaneously holding shares in different investment company portfolios having similar investment objectives and policies without reasonable grounds to believe that such recommendation is suitable and appropriate based on the customer’s investment objectives, financial situation and other securities holdings, and any associated transaction charges or other fees.

004.02B In connection with the solicitation of investment company shares, recommending to a customer the liquidation or redemption of investment company shares for the purpose of purchasing shares in a different investment company portfolio having similar investment objectives and policies without reasonable grounds to believe that such recommendation is suitable and appropriate based on the customer’s investment objectives, financial situation and other securities holdings and any associated transaction charges or other fees.

004.03 Disclosure Statements.

004.03A In connection with the solicitation of investment company shares, stating or implying to a customer the fund’s current yield or income without disclosing the fund’s most recent average annual total return, calculated in a manner prescribed in SEC Form N-1A,17 CFR 239.15A, for one, five, and ten year periods and fully explaining the difference between current yield and total return; provided, however, that if the fund’s registration statement under the Securities Act of 1933 has been in effect for less than one, five or ten years, the time during which the registration statement was in effect shall be substituted for the periods otherwise prescribed.

004.03B In connection with the solicitation of investment company shares, stating or implying to a customer that the investment performance of an investment company portfolio is comparable to that of a savings account, certificate of deposit or other financial institution deposit account without disclosing to the customer that the shares are not insured or otherwise guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) or any other government agency and the relevant differences regarding risk, guarantees, fluctuation of principal and/or return, and any other factors which are necessary to ensure that such comparisons are fair, complete and not misleading.

004.03C In connection with the solicitation of investment company shares, stating or implying to a customer, the existence of insurance, credit quality, guarantees or similar features regarding securities held, or proposed to be held, in the investment company’s portfolio without disclosing to the customer other kinds of relevant investment risks, including but not limited to, interest rate, market, political, liquidity, or currency exchange risks, which may adversely affect investment performance and result in loss and/or fluctuation of principal notwithstanding the creditworthiness of such portfolio securities.

004.03D In connection with the offer or sale of investment company shares, stating or implying to a customer that:

004.03D1 The purchase of such shares shortly before an ex-dividend date is advantageous to such customer unless there are specific, clearly described tax or other advantages to the customer, or

004.03D2 A distribution of long-term capital gains by an investment company is part of the income yield from an investment in such shares.

004.03E In connection with the offer or sale of investment company shares, making:

004.03E1 Projections of future performance;

004.03E2 Statements not warranted under existing circumstances; or

004.03E3 Statements based upon non-public information.

004.04 Prospectus. In connection with the solicitation of investment company shares, the delivery of a prospectus is not dispositive that the broker-dealer or agent has fulfilled the duties set forth in this Rule.

004.05 Definitions. For purposes of this Rule, the following definitions apply:

004.05A Recommend means any affirmative act or statement that endorses, solicits, requests, or commends a securities transaction to a customer or any affirmative act or statement that solicits, requests, commends, importunes or intentionally aids such person to engage in such conduct.

004.05B Solicitation means any oral, written or other communications used to offer or sell investment company shares excluding any proxy statement, report to shareholders, or other disclosure document relating to a security covered under Section18(b)(2) of the Securities Act of 1933, 15 U.S.C. § 77r(b)(2) that is required to be and is filed with the SEC or any national securities organization registered under Section15A of the Securities Exchange Act of 1934, 15 U.S.C. § 78o-3.

005 UNETHICAL PRACTICES FOR AGENTS . An agent of a broker-dealer or issuer-dealer who engages in one or more of the following practices shall be deemed to have engaged in a “dishonest or unethical practice” as used in Section 8-1103(9)(a)(vii) of the Act:

005.01 Engaging in the practice of lending or borrowing money or securities from a customer, or acting as a custodian of money, securities or an executed stock power of a customer, unless such customer is a member of the agent’s immediate family.

005.01A For purposes of this subsection, “immediate family” means a spouse, child, sibling, parent, grandparent, or grandchild, including stepparents, step children, stepsiblings, and adoptive relationships.

005.02 Effecting securities transactions not recorded on the regular books or records of the broker-dealer which the agent represents, unless the transactions are authorized in writing by the broker-dealer prior to execution of the transaction.

005.03 Establishing or maintaining an account containing fictitious information in order to execute transactions which would otherwise be prohibited.

005.04 Sharing directly or indirectly in profits or losses in the account of any customer unless the agent obtains the written authorization of the customer and the broker-dealer which the agent represents and the agent’s share of profits or losses is in direct proportion to the financial contributions made to such account by either the member or person associated with a broker-dealer.

005.05 Dividing or otherwise splitting an agent’s commissions, profits or other compensation from the purchase or sale of securities with any person not also registered as an agent for the same broker-dealer, or for a broker-dealer under direct or indirect common control.

005.06 Using advertising describing or relating to the agent’s securities business unless the advertising clearly identifies the name of the agent’s employing broker-dealer or issuer-dealer.

005.07 Misrepresenting the services of a registered broker-dealer or issuer-dealer on whose behalf the agent is soliciting business or accounts.

005.08 Conducting a seminar, or advertising for a seminar, unless all advertisements, including, but not limited to, flyers, invitations, postcards, letters, e-mails, sales material, newspaper, television radio, and social media posts related to the seminar, and handouts given to attendees at the seminar, identify the name of the agent offering the seminar and any broker-dealer with which the agent is affiliated

005.08A For purposes of this subsection, “seminar” includes any educational or financial workshop targeted to members of the public at which at least one of the following occur:

005.08A1 Securities products are discussed;

005.08A2 The advertising for the seminar states or implies that securities products are going to be discussed; or

005.08A3 The presenter is collecting contact information to make future solicitations concerning securities products.

006 FRAUDULENT AND DISHONEST OR UNETHICAL PRACTICES FOR INVESTMENT ADVISERS, FEDERAL COVERED ADVISERS AND INVESTMENT ADVISER REPRESENTATIVES . An investment adviser, federal covered adviser, or investment adviser representative, or any person who receives any consideration from another person primarily for advising the other personas to the value of securities or their purchase or sale (collectively “adviser”) who engages in one or more of the following practices shall be deemed to have engaged in an “act, practice, or course of business which operates or would operate as a fraud” for purposes of Section 8-1102(2)(b) or a “dishonest or unethical practice” as used in Section 8-1102(2)(d) and Section 8-1103(9)(a)(vii) of the Act:

006.01 Recommending the purchase, sale or exchange of any security to a client without reasonable grounds to believe the recommendation is suitable for the client based on:

006.01A Information furnished by the client;

006.01B Reasonable inquiry concerning the client’s investment objectives, financial situation and needs by the adviser or its registered representative; and

006.01C Any other information known or acquired by the adviser after reasonable examination of any records provided to the adviser by the client.

006.02 Placing an order to purchase or sell a security for the account of a client without authority to do so.

006.03 Placing an order to purchase or sell a security for the account of a client upon instruction of a third party without first obtaining a written authorization from the client.

006.04 Exercising any discretionary power in placing an order for the purchase or sale of securities for a client without obtaining written discretionary authority from the client, unless the discretionary power relates solely to the price at which, or the time when, an order involving a definite amount of specified securities shall be executed, or both.

006.05 Inducing trading in a client’s account that is excessive in size and frequency in view of the client’s financial resources and investment objectives, and character of the account.

006.06 Borrowing money or securities from a client unless the client is a broker-dealer, an affiliate of the adviser, a financial institution engaged in the business of loaning funds or securities, or a member of the investment adviser representative’s immediate family.

006.06A For purposes of this subsection, “immediate family” means a spouse, child, sibling, parent, grandparent, or grandchild, including stepparents, stepchildren, stepsiblings, and adoptive relationships.

006.07 Loaning money to a client unless the adviser is a financial institution engaged in the business of loaning funds, the client is an affiliate of the adviser, or the client is a member of the investment adviser representative’s immediate family, as defined in subsection 006.06A of this section.

006.08 Misrepresenting to any client or prospective client, the qualifications of the adviser, any representative or any employee of the investment adviser, or misrepresenting the nature of the advisory services being offered or fees to be charged for such service, or omitting to state a material fact necessary to make the statements made regarding qualifications, services or fees not misleading, in light of the circumstances under which they are made.

006.09 Providing a report or recommendation to any advisory client prepared by someone other than the adviser to any client, without disclosing that fact, except where the adviser uses published research reports or statistical analyses to render advice or where an adviser orders such a report in the normal course of providing service.

006.10 Charging a client an excessive advisory fee.

006.11 Failing to disclose any material conflict of interest relating to the adviser, any representative or any employee, which could reasonably be expected to impair the rendering of unbiased and objective advice, to a client in writing before entering into or renewing an advisory agreement with that client. Such conflicts include, but are not limited to:

006.11A Receiving compensation relating to advisory services provided to clients which is in addition to compensation received from such clients for such services; and

006.11B Charging a client a fee for rendering advice without disclosing that a commission for executing transactions pursuant to such advice will be received by the adviser, its representatives or its employees, or that the advisory fee will be reduced by the amount of the commission.

006.12 Guaranteeing a client that a specific result, either gain or loss, will be achieved as a result of the advice.

006.13 Disclosing the identity, affairs, or investments of any client to any third party without the client’s consent, unless required by law to do so.

006.14 Failing to comply with the requirements for investment advisers with custody set forth in 48 NAC 7.012 or for federal covered advisers with custody found in Rule 206(4)-2 under the Investment Advisers Act of 1940,17 CFR § 275.206(4)-2.

006.15 Entering into, extending or renewing any investment advisory contract, other than a contract for impersonal advisory services as defined in 48 NAC 7.010.04A, unless:

006.15A The contract is in writing; and

006.15B The contract discloses, in substance:

006.15B1 The services to be provided,

006.15B2 The term of the contract,

006.15B3 The advisory fee or the formula for computing the fee,

006.15B4 The amount or the manner of calculation of the amount of the prepaid fee to be returned in the event of contract termination or non-performance,

006.15B5 The discretionary power granted to the adviser or its representatives, if any, and

006.15B6 The contract shall not be assigned by the adviser without the client’s consent.

006.16 Employing any device, scheme, or artifice to defraud or engage in any act, practice or course of business which operates or would operate as a fraud or deceit.

006.17 Failing to disclose to any client or prospective client all material facts with respect to:

006.17A A financial condition of the adviser that is reasonably likely to impair the ability of the adviser to meet contractual commitments to clients, if the adviser has discretionary authority, express or implied, or custody over such client’s funds or securities, or requires prepayment of advisory fees of more than twelve hundred dollars ($1,200.00) from such client, six months or more in advance; or

006.17B A legal or disciplinary event that is material to an evaluation of the adviser’s integrity or ability to meet contractual commitments to clients. There is a rebuttable presumption that the following legal or disciplinary events involving the adviser or a management person of the adviser (“person”) that were not resolved in the person’s favor or subsequently reversed, suspended, or vacated are material within the meaning of this paragraph for a period of ten years from the time of the event:

006.17B1 A criminal action in a court of competent jurisdiction in which the person was convicted or pleaded guilty or nolo contendere (“no contest”) to a felony or misdemeanor, or is the named subject of a pending criminal proceeding, involving an investment-related business; fraud, false statements, or omissions; wrongful taking of property; or bribery, forgery, counterfeiting, or extortion.

006.17B2 A criminal or civil action in a court of competent jurisdiction in which the person:

006.17B2a Was found to have been involved in a violation of an investment-related statute or regulation; or

006.17B2b Was the subject of any order, judgment, or decree permanently or temporarily enjoining the person from, or otherwise limiting the person from, engaging in any investment-related activity.

006.17B3 Administrative proceedings before the Director, SEC, any other federal regulatory agency, or any other state agency (collectively “agency”) in which the person:

006.17B3a Was found to have caused an investment-related business to lose its authorization to do business; or

006.17B3b Was found to have been involved in a violation of an investment-related statute or regulation and was the subject of an order by the agency denying, suspending, or revoking the authorization of the person to act in, or barring or suspending the person’s association with, an investment-related business; or otherwise significantly limiting the person’s investment-related activities.

006.17B4 Self-Regulatory Organization (“SRO”) proceedings in which the person:

006.17B4a Was found to have caused an investment-related business to lose its authorization to do business; or

006.17B4b Was found to have been involved in a violation of the SRO’s rules and was the subject of an order by the SRO barring or suspending the person from association with other members, or expelling the person from membership; or fining the person more than two thousand five hundred dollars ($2,500.00),or otherwise significantly limiting the person’s investment-related activities.

006.17B5 For purposes of calculating the ten year period during which events are presumed to be material under this subsection, the date of a reportable event shall be the date on which the final order, judgment, or decree was entered, or the date on which any rights of appeal from preliminary orders, judgments, or decrees lapsed.

006.17C The information required to be disclosed by this subsection shall be disclosed to clients within thirty days, and to prospective clients not less than forty-eight hours prior to entering into any written investment advisory contract, or no later than the time of entering into such contract if the client has the right to terminate the contract without penalty within five business days after entering into the contract.

006.17D For purposes of this subsection:

006.17D1 “Management person” means a person with power to exercise, directly or indirectly, a controlling influence over the management or policies of an adviser which is a company or to determine the general investment advice given to clients.

006.17D2 “Found” means determined or ascertained by adjudication or consent in a final SRO proceeding, agency administrative proceeding, or court action.

006.17D3 “Investment-related” means pertaining to securities, commodities, banking, insurance, or real estate, including, but not limited to, acting as or being associated with a broker-dealer, investment company, investment adviser, government securities broker or dealer, municipal securities dealer, bank, savings and loan association, entity or person required to be registered under the Commodity Exchange Act, 7 U.S.C. § 1 et seq., or fiduciary.

006.17D4 “Involved” means acting or aiding, abetting, causing, counseling, commanding, inducing, conspiring with or failing reasonably to supervise another in doing an act.

006.17D5 “Self-Regulatory Organization” means any national securities or commodities exchange, registered association, or registered clearing agency, rule, or regulation.

006.17E Disclosure pursuant to this subsection does not relieve any investment adviser from the obligations of any other disclosure requirement under the Act, the rules and regulations thereunder, or under any other federal or state law.

006.18 Entering into, extending or renewing any investment advisory contract, if such contract contains any provision which limits or purports to limit:

006.18A Liability of the adviser for conduct or omission arising from the advisory relationship which does not conform to the Act, applicable federal statutes, and common law fiduciary standards of care; or

006.18B Applicability of the laws of Nebraska with respect to the construction or interpretation of the contract provisions.

006.19 Failing to cooperate with, or providing false or incomplete information to, the Director in connection with an investigation.

006.20 Failing to establish, maintain, and enforce written policies and procedures reasonably designed to prevent the misuse of material nonpublic information in violation of Section 204A of the Investment Advisers Act of 1940,15 U.S.C. § 80b-4a.

006.21 Entering into, extending or renewing any advisory contract which would violate Section 205 of the Investment Advisers Act of 1940,15 U.S.C § 80b-5, notwithstanding the fact that such adviser would be exempt from federal registration pursuant to Section 203(b) of the Investment Advisers Act of 1940, 15 U.S.C § 80b-3.

006.22 Including a provision which purports to waive compliance with any provision of the Act, of the rules and regulations thereunder, or of the Investment Advisers Act of 1940 in any advisory contract, stipulation or other document binding on any person, or any other practice that would violate Section 215 of the Investment Advisers Act of 1940, 15 U.S.C. § 80b-15.

006.23 Engaging in any act, practice, or course of business which is fraudulent, deceptive or manipulative in contravention of Section 206(4) of the Investment Advisers Act of 1940, 15 U.S.C. § 80b-6, notwithstanding the fact that such investment adviser is not registered or required to be registered under Section 203(b) of the Investment Advisers Act of 1940, 15 U.S.C § 80b-3.

006.24 Engaging in conduct or any act, indirectly or through or by any other person, which would be unlawful for such person to do directly under the provisions of the Act or any rule or regulation thereunder.

006.25 Dividing, splitting or otherwise paying fees or other compensation paid pursuant to the investment adviser contract with any individual or entity which is not registered as an investment adviser or investment adviser representative under the Act.

006.26 Publishing, circulating or distributing any advertisement which does not comply with Rule 206(4)-1 under the Investment Advisers Act of 1940,17 CFR § 275.206(4)-1.

006.27 Conducting a seminar, or advertising for a seminar, unless all advertisements, including but not limited to, flyers, invitations, postcards, letters, e-mails, sales material, newspaper, television, radio, and social media posts related to the seminar, and handouts given to attendees at the seminar, identify the name of the investment adviser representative offering the seminar and any investment adviser with which the investment adviser is affiliated.

006.27A For purposes of this subsection, “seminar” includes any educational or financial workshop targeted to members of the public at which at least one of the following occur:

006.27A1 Securities products are discussed;

006.27A2 The advertising for the seminar states or implies that securities products are going to be discussed; or

006.27A3 The presenter is collecting contact information to make future solicitations concerning securities products.

006.28 Accessing a client’s account by using the client’s own unique identifying information, such as username and password.

006.29 Failing to establish, maintain, or enforce a required policy or procedure.

006.30 Failing to pay and fully satisfy any final judgment or arbitration award resulting from an investment-related, client or customer-initiated arbitration or court proceeding, unless alternative payment arrangements are agreed to between the client and the investment adviser or investment adviser representative or between the customer and the broker-dealer or agent, in writing, and the broker-dealer or agent complies with the terms of the alternative payment arrangement.

006.31 Attempting to avoid payment of any final judgment or arbitration award resulting from an investment-related, client or customer-initiated arbitration or court proceeding, unless alternative payment arrangements are agreed to between the client and the investment adviser or investment adviser representative or between the customer and the broker-dealer or broker-dealer agent, in writing, and the broker-dealer or broker-dealer agent complies with the terms of the alternative payment arrangements.

006.32 Failing to pay and fully satisfy any fine, civil penalty, order of restitution, order of disgorgement, or similar monetary payment obligation imposed upon the investment adviser or investment adviser representative by the Securities and Exchange Commission, the securities or other financial services regulator of any state or province, or any self-regulatory organization.

006.33 Federal statutory and regulatory provisions referenced herein shall apply to investment advisers and federal covered advisers, regardless of whether the federal provision limits its application to advisers subject to federal registration.

History

Effective 2024-09-18

Chapter 13 Approved Exchanges for the Section 8-1110(5) Exchange Exemption

Neb. Admin. Code tit. 48, ch. 13 Approved Exchanges for the Section 8-1110(5) Exchange Exemption {#sec-48-nac-13 omnilex-key=us-ne-regs-official--title-48--48 NAC 13}

001 GENERAL .

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Sections 8-1120 and 8-1110(5) of the Securities Act of Nebraska (“Act”).

001.02 The Department has determined that this Rule relating to Section 8-1110(5) of the Act is consistent with investor protection and is in the public interest.

001.03 The definitions in 48 NAC 2 apply to the provisions of this Rule, unless otherwise specified.

001.04 Federal statutes and rules of the Securities and Exchange Commission (“SEC”) and of the Financial Industry Regulatory Authority (“FINRA”) referenced herein means those statutes and rules as amended on or before the effective date of this Rule. A copy of the statutes or rules referenced in this Rule is available as an appendix to this rule at www.ndbf.nebraska.gov.

001.05 The provisions of this Rule do not apply to any security that is a federal covered security pursuant to the provisions of Section 18(b)(1) of the Securities Act of 1933.

002 DESIGNATION OF APPROVED EXCHANGES : Stock exchanges specified by or approved under Section 8-1110(5) of the Securities Act of Nebraska, are as follows:

002.01 The securities exchanges specified by Section 18(b)(1) of the Securities Act of 1933 and 17 CFR 230.146; and

002.02 The Chicago Stock Exchange.

003 DISCLOSURE . Nothing in this exemption is intended to relieve, or should be construed as in any way relieving, sellers or persons acting on behalf of sellers from providing to prospective investors disclosure adequate to satisfy the provisions of Section 8-1102(1) of the Act.

004 BURDEN OF PROOF . In any proceeding involving this Rule, the burden of proving the exemption from registration is upon the person claiming the exemption.

History

Effective 2018-11-25

Chapter 14 Record Keeping Requirements for the Section 8-1111(3) Exemption

Neb. Admin. Code tit. 48, ch. 14 Record Keeping Requirements for the Section 8-1111(3) Exemption {#sec-48-nac-14 omnilex-key=us-ne-regs-official--title-48--48 NAC 14}

001 GENERAL .

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Section 8-1120(3) of the Securities Act of Nebraska (“Act”).

001.02 The Department has determined that this Rule relating to the record-keeping requirements for the exemption from registration pursuant to Section 8-1111(3) of the Act is consistent with investor protection and is in the public interest.

001.04 The definitions in 48 NAC 2 shall apply to the provisions of this Rule, unless otherwise specified.

002 RECORDKEEPING . The following requirements must be met by registered broker-dealers relying upon the exemption from registration contained in Section 8-1111(3) of the Act.

002.01 In transactions involving an unsolicited order or offer to buy, the broker-dealer shall require the customer to acknowledge upon a specified form that the sale was unsolicited.

002.02 The broker-dealer shall retain a signed copy of each such form for a period of five years from the date of each sale made in reliance upon this exemption.

003 PRODUCTION OF RECORDS . The broker-dealer shall provide copies of any and all records required by this Rule to the Department upon request.

History

Effective 1999-04-07

Chapter 15 Information Requirements for the Section 8-1111(9) De Minimus Exemption

Neb. Admin. Code tit. 48, ch. 15 Information Requirements for the Section 8-1111(9) De Minimus Exemption {#sec-48-nac-15 omnilex-key=us-ne-regs-official--title-48--48 NAC 15}

001 GENERAL .

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Sections 8-1120(3) and 8-1111(9) of the Securities Act of Nebraska (“Act”).

001.02 The Department has determined that this Rule relating to Section 8-1111(9) is consistent with investor protection and is in the public interest.

001.04 The definitions in 48 NAC 2 shall apply to the provisions of this Rule, unless otherwise specified.

001.05 Federal statutes and rules of the Securities and Exchange Commission (“SEC”) or the Financial Industry Regulatory Authority (“FINRA”) referenced herein shall mean those statutes and rules as amended on or before the effective date of this Rule. A copy of the applicable statutes or rules referenced in this Rule is attached hereto.

002 NOTICE FILING REQUIREMENT . The notice required by Section 8-1111(9)(a) of the Act will be satisfied if the conditions of this Rule are met.

002.01 Such notice shall be filed with the Nebraska Department of Banking and Finance, P.O. Box 95006, Lincoln, Nebraska 68509-5006.

002.02 Such notice shall be filed within thirty days of the first sale made in reliance on this exemption.

003 CONTENTS OF NOTICE . The notice filed by a seller pursuant to Section 8-1111(9)(a) shall include the following information:

003.01 The name and address of the issuer and the name and address of the seller, if other than the issuer;

003.02 The name and address of the broker-dealer representing the seller in promoting the offering or, if there is no broker-dealer representing the seller, the name and address of any officer, director, manager, member or other person representing the seller in promoting the offering;

003.03 The business in which the issuer is to be engaged;

003.04 The type of security being issued (common stock, limited partnership interests, debentures, etc.);

003.05 The total dollar amount of such securities sold as of the date of the filing, whether in Nebraska or elsewhere;

003.06 The dollar amount to be offered during the twelve-month period following the filing, whether in Nebraska or elsewhere;

003.07 The date of the first sale made in reliance on this exemption; and

003.08 A representation that all of the conditions of Section 8-1111(9) of the Act have been or will be met.

004 ADDITIONAL FILINGS . An issuer which meets the requirements set forth below shall file audited financial statements and a sales report with the Director.

004.01 An issuer is required to make such filing after the issuer has made:

004.01A Sales pursuant to Section 8-1111(9)(a) for five consecutive twelve-month periods; or

004.01B Total sales of one million dollars ($1,000,000.00) from one or more offerings pursuant to Section 8-1111(9)(a).

004.01B1 In determining the total amount of sales for purposes of determining the necessity of complying with this provision, the issuer shall include sales to persons excluded from the fifteen person limitation under Section 8-1111(9)(a).

004.01B2 In determining the total amount of sales for purposes of determining the necessity of complying with this provision, the issuer shall include all sales of securities, regardless of the location of the purchaser or the location where the transaction occurred.

004.02 The required information shall be filed no later than ninety days after:

004.02A The date on which the issuer files the fifth consecutive annual notice claiming exemption pursuant to Section 8-1111(9)(a); or

004.02B The date on which the issuer’s total sales of the securities reaches one million dollars ($1,000,000.00).

004.03 The financial statements shall include a balance sheet, an income statement, and a cash flow statement and must be:

004.03A Examined in accordance with generally accepted auditing standards and prepared in conformity with generally accepted accounting principles;

004.03B Audited by an independent certified public accountant;

004.03C Accompanied by an opinion of the accountant as to the report of financial position, and by a note stating the principles used to prepare it, the basis of included securities, and any other explanations required for clarity; and

004.03D Prepared as of the end of the issuer’s most recent fiscal year.

004.04 The sales report shall include:

004.04A The name and address of all purchasers and holders of the issuer’s securities, the amount of securities held by such persons, and the dates on which purchases were made; and

004.04B A statement indicating whether each purchaser or holder of a security is an accredited investor and whether the status as an accredited investor is based on net worth or net income.

004.05 An issuer shall file audited financial statements and sales reports with the Director each time that the issuer sells an additional one million dollars ($1,000,000.00) in securities or after the elapse of each additional sixty-month period during which sales are made pursuant to Section 8-1111(9).

004.06 The filing set forth in this subsection shall be deemed to be a condition of the exemption for any issuer who meets the requirements contained in Section 004.01, above. Failure to make a required filing will result in the loss of the exemption. Sales made in reliance during the time when an issuer is not in compliance with these filing requirements will be considered to violate Section 8-1104 of the Act.

004.07 The Department may grant a request for an extension of the ninety-day period for the filing of financial statements, upon the timely filing of such a request by an issuer, based on the need for additional time to prepare the audit.

005 DISCLOSURE . Nothing in this exemption is intended to relieve, or should be construed as in any way relieving, sellers or persons acting on behalf of sellers from providing to prospective investors disclosure adequate to satisfy the provisions of Section 8-1102(1) of the Act.

006 INVESTMENT INTENT . The seller must have reasonable belief that the securities purchased are taken for investment. Investment intent may be manifested by, but is not limited to, a restriction which shall be stated on the face of the security that it shall be held by the purchaser until the earlier of the date the issuer of the securities becomes subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, 15 U.S.C. § 78m or 15 U.S.C. § 78o(d) or one year from the date of purchase.

007 EFFECTIVENESS . A notice of exemption filed pursuant to Section 8-1111(9)(a) of the Act shall remain effective until the earlier of the following events:

007.01 Sales to fifteen persons, other than persons designated in Sections 8-1111(8), (11) and (17) of the Act, have been effected; or

007.02 One year from the date of the first sale.

008 AVAILABILITY OF EXEMPTION .

008.01 Offers and sales which are exempt under this rule may not be combined with offers and sales exempt under any other Rule or Section of the Act, except as specifically allowed in Section 8-1111(9) of the Act; however, nothing in this limitation shall act as an election. Should, for any reason, the offer and sale fail to comply with all of the conditions for this exemption, the seller may claim the availability of any other applicable exemption.

008.02 This exemption is not available to any seller with respect to any transaction which, although in technical compliance with this Rule, is part of a plan or scheme to evade registration or the conditions or limitations explicitly stated in this Rule.

009 CURE ORDERS . If the notice required by Section 8-1111(9)(a) of the Act and this Rule is not filed within thirty days of the first sale made in reliance on this exemption, the seller shall file the information required by 48 NAC 19.

010 BURDEN OF PROOF . In any proceeding involving this Rule, the burden of proving the exemption from registration is upon the person claiming the exemption.

ATTACHMENTS: U.S.C. Title 15 - COMMERCE AND TRADE

History

Effective 2017-06-05

Chapter 16 Information Requirements for the Section 8-1111(15) Cooperative and Limited Cooperative Associaton Exemption

Neb. Admin. Code tit. 48, ch. 16 Information Requirements for the Section 8-1111(15) Cooperative and Limited Cooperative Associaton Exemption {#sec-48-nac-16 omnilex-key=us-ne-regs-official--title-48--48 NAC 16}

001 GENERAL .

001.01 This Rule has been promulgated pursuant to the authority delegated to the Director in Sections 8-1120 and 8-1111(15) of the Securities Act of Nebraska (“Act”).

001.02 The Department has determined that this Rule relating to Section 8-1111(15) is consistent with investor protection and is in the public interest.

001.04 The definitions in 48 NAC 2 apply to the provisions of this Rule, unless otherwise specified.

002 NOTICE FILING REQUIREMENT . The notice required by Section 8-1111(15) of the Act will be satisfied if the conditions of this Rule are met.

002.01 Such notice shall be filed with the Nebraska Department of Banking and Finance, P.O. Box 95006, Lincoln, Nebraska 68509-5006.

002.02 Such notice shall be filed prior to the issuance of any security made in reliance upon this exemption.

003 CONTENTS OF NOTICE . The notice shall contain the following information:

003.01 The name and address of the cooperative or limited cooperative association;

003.02 The date of incorporation and the statute under which the cooperative or limited cooperative association was organized;

003.03 The amount of its authorized capital stock;

003.04 The type of security being issued: identify whether it is a certificate of participation or interest, a certificate of indebtedness, common stock, preferred stock, or other;

003.05 The total amount of the securities to be sold by the issuer in Nebraska;

003.06 An indication as to whom sales will be made: present members, patrons, or the general public;

003.07 A brief description of the methods by which the securities will be sold;

003.08 The names and addresses of the persons who will be selling the securities and their relationship to the cooperative or limited cooperative association;

003.09 A complete copy of the financial statements for the past two years;

003.10 A brief description of the intended use of the proceeds;

003.11 The interest rate to be paid, if the offering involves debt securities; and

003.12 A copy of the disclosure document to be provided to prospective investors, if the cooperative or limited cooperative association does not have a past history of offering securities.

004 AMENDMENTS . If, during the offering period, an event occurs which would materially affect the issuer, its prospects or properties, or otherwise materially affect the accuracy or completeness of the information required in Section 003, above, the notice shall be promptly revised to reflect such event and filed with the Director.

005 EFFECTIVENESS . A notice of exemption filed pursuant to Section 8-1111(15) of the Act remains in effect until the earliest of the following occurrences:

005.01 The amount of securities stated in the notice submitted to the Director is sold;

005.02 Until the issue is discontinued by resolution of the Board of Directors of the cooperative or limited cooperative association; or

005.03 Three years from the date of the initial filing of the notice under this Rule.

006 BURDEN OF PROOF . In any proceeding involving this Rule, the burden of proving the exemption from registration is upon the person claiming the exemption.

History

Effective 2018-11-25

Chapter 18 Information Requirements for the Section 8-1111(20) Nebraska Intrastate Issuer Exemption

Neb. Admin. Code tit. 48, ch. 18 Information Requirements for the Section 8-1111(20) Nebraska Intrastate Issuer Exemption {#sec-48-nac-18 omnilex-key=us-ne-regs-official--title-48--48 NAC 18}

001 GENERAL .

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Section 8-1111(20) and Section 8-1120 of the Securities Act of Nebraska (“Act”).

001.02 The Department has determined that this Rule regarding intrastate offerings is consistent with investor protection and is in the public interest.

001.03 The Director may, on a case-by-case basis, and with prior written notice to the affected parties, require adherence to additional standards or policies, as deemed necessary in the public interest.

001.04 The definitions in 48 NAC 2 apply to the provisions of this Rule, unless otherwise specified.

001.05 Federal statutes and rules of the Securities and Exchange Commission (“SEC”) or the Financial Industry Regulatory Authority (“FINRA”) referencedherein means those statutes and rules as amended on or before theeffective date of this Rule. A copy of the statutes or rules referenced in this Rule is available as an appendix to this rule at https://ndbf.nebraska.gov/about/legal/administrative-rules-and-regulations.

002 CONDITIONS OF EXEMPTION . Transactions meeting the conditions of this Rule will be deemed exempt from the registration provisions of the Act.

002.01 The offer or sale of securities pursuant to this Rule may be made only to Nebraska residents. No offers or sales may be made to persons who are not residents of Nebraskan or may offers or sales be made outside Nebraska.

002.02 An issuer relying on the Rule must have, both before and upon completion of the offering, its principal office and more than fifty percent of its employees located in Nebraska.

002.03 No commission, finder’s fee, or other remuneration shall be paid or given, directly or indirectly, to any person for soliciting any prospective purchaser or in connection with sales of securities in reliance on this Rule, unless such person is registered in this state as a broker-dealer or issuer-dealer, or agent of such.

002.04 The offering price for the securities, and the exercise price, if the securities offered are options, warrants or rights for common stock, and the conversion price if the securities are convertible into common stock, must be equal to or greater than five dollars ($5.00) per share or unit offered.

002.05 The total aggregate amount of proceeds collected in a twelve-month period shall not exceed one million two hundred fifty thousand dollars ($1,250,000.00).

002.06 At least eighty percent of the net proceeds from the sale of the offering shall be used in Nebraska.

002.07 The issuer shall file a notice, as specified in Section 003, below, with the Nebraska Department of Banking and Finance, P.O. Box 95006, Lincoln, Nebraska 68509-5006, no later than twenty days prior to any sales for which an exemption under this Rule is claimed.

002.07A The Director shall notify the issuer of the date on which the notice of exemption becomes effective.

002.07B Such notice is effective for a period of twelve consecutive months from the effective date established by the Director.

002.08 The issuer shall, within thirty days after the completion of the offering, file with the Director a statement indicating the number of investors, the total dollar amount raised, and the use of proceeds.

002.09 The issuer must have reasonable belief that the securities purchased are taken for investment. Investment intent may be manifested by, but is not limited to, a restriction which shall be stated on the face of the security that it shall be held by the purchaser until the earlier of two years from the date of purchase from the issuer or the date the issuer of the securities becomes subject to the reporting requirements of Sections 13 or 15(d) of the Securities Exchange Act of l934, 15 U.S.C. § 78m or 15 U.S.C. § 78o(d).

003 CONTENTS OF NOTICE .

003.01 The notice shall include the following information:

003.01A The name and address of the issuer;

003.01B The names and addresses of the broker-dealer or issuer-dealer, and any individuals selling or promoting the offering;

003.01C The business in which the issuer is to be engaged;

003.01D The type of security being issued (common stock, limited partnership interests, debentures, etc.);

003.01E The total dollar amount of such securities;

003.01F The Securities Offering Disclosure Document (“Form SODD”);

003.01G The financial statements prepared in accordance with Section 005 below;

003.01H A representation that all of the conditions of Section 8-1111(20) have been or will be met by the issuer; and

003.01I A filing fee of two hundred dollars ($200.00).

003.02 Every notice and disclosure document filed with the Director shall be signed by a person duly authorized by the issuer.

003.03 The Director may require the filing of additional information if the Director deems it material to the offering.

004 DELIVERY OF DISCLOSURE DOCUMENT . A copy of the offering disclosure document and the financial statements prepared in accordance with Section 005, below, shall be given to prospective investors at least twenty-four hours prior to signing any agreement to purchase the securities or paying any consideration for the securities.

005 FINANCIAL REPORTING REQUIREMENTS .

005.01 The issuer shall provide the following financial statements for itself and its consolidated subsidiaries, if applicable:

005.01A A balance sheet as of the end of the most recent fiscal year, or, as of a date within one hundred twenty days of the date of the first sale, if the issuer has been in existence for less than one fiscal year; and

005.01B An income statement for the immediate past fiscal year or such shorter period as the issuer (including predecessors) has been in existence.

005.01C If the issuer has not conducted significant operations, a statement of receipts and disbursements shall be included in lieu of a statement of income.

005.02 Except as otherwise provided, the financial statements shall be:

005.02A Prepared in accordance with generally accepted accounting principles and audited by an independent accountant; or

005.02B Reviewed by an independent accountant.

005.02B1 Financial statements shall be accompanied by an accountant’s review report signed by the independent accountant after completion of his or her review performed in accordance with the standards prescribed by the American Institute of Certified Public Accountants.

005.02B2 The review shall be dated within one hundred twenty days of the date of the first sale.

005.02B3 If the Director deems it to be in the public interest and necessary for the protection of investors, audited financial statements may be required.

005.03 An issuer with no prior operating history may elect not to have an accounting review prepared by an independent accountant if the issuer deems the information not material to an investor’s understanding of the issuer, its business, and the securities being offered.

005.03A Financial statements which are neither audited nor subjected to an accounting review must be accompanied by an affirmative representation by the issuer, signed by an officer, director or person occupying a similar position, that the statements provide all material information relating to the financial condition of the issuer and are true and accurate to the best of the signer’s knowledge and belief.

005.03B All financial statements shall be prepared in accordance with generally accepted accounting principles.

005.04 The issuer shall provide the financial statement required by Section 005.01, above, in connection with income producing assets and/or income producing real property to be purchased with the proceeds of the offering by the issuer.

006 CORRECTION . If, during the offering period under this Rule, an event occurs that materially affects the issuer, its prospects or properties, or otherwise materially affects the accuracy or completeness of the information contained in the disclosure document, the disclosure document shall be promptly revised to reflect such event and filed with the Director. The revised document shall be used for all sales of securities claiming the exemption thereafter. All investors who have purchased in this offering must be given a copy of the revised document with the option of affirming their investment decision or receiving their money back.

007 SOLICITATION RESTRICTION . Neither the issuer nor any person acting on its behalf shall offer or sell the securities by any form of general solicitation or general advertising, including, but not limited to, the following:

007.01 Any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio;

007.02 Any advertisement, article, notice, spam or junk electronic mail, or other general communication placed on, or delivered by means of, the Internet; and

007.03 Any seminar or meeting to which attendees have been invited by any general solicitation or general advertising.

008 MINIMUM OFFERING AMOUNT . The issuer must specify in the disclosure document the minimum amount of funds necessary to achieve the results outlined in the disclosure document. This shall be the minimum amount of funds to be raised through the offering.

009 ESCROW REQUIREMENT . The issuer must establish a separate interest bearing account with a financial institution office located in Nebraska for all funds received from sales of securities under this exemption until at least the minimum amount has been raised. If the minimum amount of funds is not raised within twelve months of the beginning of the offering, then all funds, including any interest there on, shall be promptly returned to the investors, and the issuer shall immediately notify the Director of such action.

010 LIMITATIONS ON AVAILABILITY . The exemption provided by this Rule is available only to an issuer of the securities. The exemption is not available for:

010.01 Affiliates of the issuer or any other person for resale of the issuer’s securities; or

010.02 Transactions by existing security holders of the issuer.

010.03 An issuer that is either before or because of the offering, an investment company as defined in Section 3 of the Investment Company Act of 1940, 15 U.S.C. 80a-3, an entity that would be an investment company but for the exclusions provided in section 3(c) of the Investment Company Act of 1940, 15 U.S.C. 80a-3(c), or subject to the reporting requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, 15 U.S.C. 78m or 15 U.S.C. 78o(d);

010.04 Debt offerings unless the issuer can demonstrate reasonable historical ability to service its debt.

010.05 Offerings which are “blind pool offerings” or other offerings for which the specific business to be engaged in or specific property to be acquired by the issuer is not identified.

011 DISQUALIFICATION FACTORS . The exemption provided by this Rule is not available for the securities of any issuer, if the issuer or any of its officers, directors, general partners, managing members, beneficial owners of ten percent or more of any class of its equity securities, promoters or any selling agents of the securities to be offered, or any officer, director, managing member, or partner of such selling agent:

011.01 Has filed a registration statement which is the subject of a currently effective stop order entered pursuant to any federal or state securities laws within five years prior to the commencement of the offering;

011.02 Has been convicted within five years prior to the commencement of the offering of any felony or misdemeanor in connection with the offer, purchase or sale of any security or any felony involving fraud or deceit, including, but not limited to, forgery, embezzlement, obtaining money under false pretenses, larceny or conspiracy to defraud;

011.03 Is currently subject to any state administrative enforcement order or judgment entered by a state securities administrator or the Securities and Exchange Commission (“SEC”) within five years prior to the commencement of the offering;

011.04 Is subject to any federal, state, or foreign governmental agency administrative enforcement order or judgment in which fraud or deceit, including, but not limited to, making untrue statements of material facts or omitting to state material facts, was found and the order or judgment was entered within five years prior to the commencement of the offering;

011.05 Is currently subject to an administrative enforcement order or judgment of a state securities administrator which prohibits, denies, or revokes the use of any exemption from registration in connection with the offer, purchase, or sale of securities of the issuer; or

011.06 Is currently subject to any order, judgment, or decree of any court of competent jurisdiction which temporarily or preliminarily restrains or enjoins, or which was entered within five years prior to the commencement of the offering, and permanently restrained or enjoined such person from engaging in or continuing any conduct or practice in connection with the purchase or sale of any security or involving the making of any false filing with any state, or with the SEC.

011.07 Any disqualification caused by this Section may be waived if the Director determines, upon a showing of good cause, that it is not necessary under the circumstances that the exemption be denied.

011.08 For purposes of this Section, beneficial ownership means the power to vote or direct the vote and/or the power to dispose or direct the disposition of such securities.

012 DISCLOSURE . Nothing in this exemption is intended to or should be construed as in any way relieving issuers or persons acting on behalf of issuers from providing to prospective investors disclosure adequate to satisfy the provisions of Section 8-1102(1)of the Act.

013 AVAILABILITY OF EXEMPTION .

013.01 Offers and sales which are exempt under this Rule may not be combined with offers and sales exempt under any other Rule or Section of the Act; however, nothing in this limitation shall act as an election. Should the offer and sale fail to comply with all of the conditions for this exemption, the issuer may claim the availability of any other applicable exemption.

013.02 The exemption is not available to any issuer with respect to any transaction which, although in technical compliance with this Rule, is part of a plan or scheme to evade registration or the conditions or limitations explicitly stated in this Rule.

014 BURDEN OF PROOF . In any proceeding involving this Rule, the burden of proving the exemption from registration is upon the person claiming the exemption.

015 INTEGRATION . All offers or sales that are part of the same offering must meet all of the terms and conditions of this Rule. Offers and sales that are made more than six months before the start, or more than six months after completion, of an offering made in reliance on this Rule, will not be considered part of that offering, provided no offers or sales of securities are made by or for the issuer during such periods. 48 NAC 41 identifies the factors that will be considered in determining whether offers and sales should be integrated.

016 CURE ORDER . An issuer which fails to file the notice at least twenty days prior to any sale made in reliance on this exemption may request the late filing be cured by complying with 48 NAC 19.

History

Effective 2022-06-13

Chapter 19 Requests for Orders Curing Late Notice Filings

Neb. Admin. Code tit. 48, ch. 19 Requests for Orders Curing Late Notice Filings {#sec-48-nac-19 omnilex-key=us-ne-regs-official--title-48--48 NAC 19}

001 GENERAL .

001.01 This Rule has been promulgated pursuant to the authority delegated to the Director in Section 8-1120(3) of the Securities Act of Nebraska(“Act”). 001.02 The Department has determined that this Rule relating to requests to cure late filings of an exemption notice pursuant to Sections8-1111(9), 8-1111(16), 8-1111(20), 8-1111(21), 8-1111(23), and 8-1108.02(2)(b) under the Act is consistent with investor protection and is in the public interest.

001.04 The definitions in 48 NAC 2 apply to this Rule, unless otherwise specified.

001.05 For purposes of this Rule, the term “seller” includes any issuer or other person on whose behalf a notice of exemption from registration under Sections , 8-1111(9), 8-1111(16), 8-1111(20), 8-1111(21), 8-1111(23), and 8-1108.02(2)(b) is filed with the Director.

002 FILING REQUIREMENT . A seller that does not file an exemption notice within the time period specified in the above applicable statutory provisions of the Act, or any Rule promulgated thereunder, shall file a written request with the Director for an Order curing the late filing of the exemption notice.

002.01 The request shall be signed and dated by an officer, director, general partner, managing member or legal counsel of the seller.

002.02 The request shall accompany the exemption notice.

003 CONTENTS OF REQUEST .

003.01 If the exemption notice is filed thirty days or less after the time period specified for the exemption claimed, the request shall include:

003.01A The date (day, month, year) of the first Nebraska sale in reliance on the applicable exemption,;

003.01B An explanation as to why the filing was late;

003.01C A representation that the conditions of the exemption have been met, except for the timely filing of the notice;

003.01D A representation that there have been no adverse material changes in the financial condition of the issuer since the original date of the offering or first sale;

003.01E A representation that there have been no civil suits or complaints filed by investors against the seller, or investor complaints since the date of the first Nebraska sale; and

003.01F A representation that no administrative actions or investigations have been initiated by any state or federal regulatory authority in connection with the offering or any other investment-related activity by the issuer. For purposes of this Rule, investment-related shall mean pertaining to securities, commodities, banking, insurance, or real estate, including, but not limited to, acting as, or being associated with, a broker-dealer, issuer, investment company, investment adviser, futures sponsor, or depository institution.

003.02 If the exemption notice is filed thirty-one to sixty days after the time period specified for the exemption claimed, the request shall include:

003.02A The information required by Section 003.01, above;

003.02B The names and addresses of all Nebraska investors as of the filing date;

003.02C The date of each Nebraska investor’s investment; and

003.02D A statement by the seller(s), and its officers, managers and selling agents, in which they, in their individual and corporate capacity, discuss their prior securities offering experience, if any.

003.03 If the exemption notice is filed more than sixty days after the time period specified for the exemption claimed, the request shall include:

003.03A The information by Section 003.02, above; and

003.03B If represented by counsel, the date counsel was retained by the seller, and the date when discussions on the Nebraska offering began.

004 INVESTIGATIONS . If an exemption notice is filed more than ninety days after the time period specified for the exemption claimed, the Department may commence an independent investigation of the matter. The Department specifically reserves the right to assess the expense of its investigation to the seller pursuant to Section 8-1115(1) of the Act or to assess a fine pursuant to Section 8-1108.01(4) of the Act.

History

Effective 2022-06-13

Chapter 20 Federal Covered Securities

Neb. Admin. Code tit. 48, ch. 20 Federal Covered Securities {#sec-48-nac-20 omnilex-key=us-ne-regs-official--title-48--48 NAC 20}

001 GENERAL .

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Sections 8-1108.02 and 8-1120of the Securities Act of Nebraska(“Act”).

001.02 The Department has determined that this Rule relating to filing requirements for issuers of federal covered securities is consistent with investor protection and is in the public interest.

001.03 The definitions in 48 NAC 2 apply to the provisions of this Rule, unless otherwise specified.

001.04 Federal statutes and rules of the Securities and Exchange Commission (“SEC”) or the Financial Industry Regulatory Authority (“FINRA”) referencedherein means those statutes and rules as amended on or before theeffective date of this Rule. A copy of the statutes or rules referenced in this Rule is available as an appendix to this rule at https://ndbf.nebraska.gov/about/legal/administrative-rules-and-regulations.

002 OFFERINGS BY INVESTMENT COMPANIES .

002.01 Prior to the offer or sale of any security by an investment company registered under the Investment Company Act of 1940, the issuer shall file the following information with the Director:

002.01A A notice, on a uniform form, acceptable to the Director, which shall contain:

002.01A1 The name and address of the issuer; and

002.01A2 The dollar amount of securities which the issuer intends to offer in this state; and

002.01B A consent to service of process, which may incorporate by reference any consent to service of process previously filed with the Director by such issuer;

002.01C A filing fee calculated in accordance with Section 8-1108.03 of the Act; and

002.01D Any other information which the Director may require, subject to the limitations of Section 18 of the Securities Act of 1933, 15 USC § 77r .

002.02 Such notice is effective for a period of one year from the date the notice is received by the Director, unless the issuer notifies the Director of a later date of effectiveness of the notice.

002.03 A notice filing may be renewed by filing the information specified in Section 002.01, above, with the Director before the expiration of the effectiveness of the previous notice filing, along with any sales report required by Section 8-1108.03 of the Act. A notice filing received pursuant to this subsection takes effect upon the expiration of the previous notice filing and is effective for one year.

003 OFFERINGS PURSUANT TO REGULATION 506 .

003.01 An issuer offering a security which is a covered security pursuant to Section 18(b)(4)(F) of the Securities Act of 1933, 15 U.S.C.§77r(b)(4)(F)shall file the following information with the Director no later than fifteen days after the first sale of such security in this state:

003.01A A copy of the issuer’s SEC Form D.;

003.01B A consent to service of process; and

003.01C A filling fee of two hundred dollars ($200.00).

003.02 An issuer may file an amendment to a previously filed notice of sales on SEC Form D at any time.

003.03 An issuer shall file an amendment to a previously filed notice of sales on SEC Form D for an offering:

003.03A To correct a material mistake of fact or error in the previously filed notice of sales on SEC Form D, as soon as practicable after discovery of the mistake or error.

003.03B To reflect a change in the information provided in the previously filed notice of sales on SEC Form D, as soon as practicable after the change, except that no amendment is required to reflect a change that occurs after the offering terminates or a change that occurs solely in the following information:

003.03B1 The address or relationship of the issuer or a related person identified in the SEC Form D;

003.03B2 An issuer’s revenues or aggregate net asset value;

003.03B3 The minimum investment amount, if the change is an increase, or if the change, together with all other changes in that amount since the previously filed notice of sales on SEC Form D, does not result in a decrease of more than ten percent;

003.03B4 Any address or state(s) of solicitation shown on the notice of sales on SEC Form D;

003.03B5 The total offering amount, if the change is a decrease, or if the change, together with all other changes in that amount since the previously filed notice of sales on SEC Form D, does not result in an increase of more than ten percent;

003.03B6 The amount of securities sold in the offering or the amount remaining to be sold;

003.03B7 The number of nonaccredited investors who have invested in the offering, as long as the change does not increase the number to more than thirty-five;

003.03B8 The total number of investors who have invested in the offering; and

003.03B9 The amount of sales commissions, finders’ fees or use of proceeds for payments to executive officers, directors or promoters, if the change is a decrease, or if the change, together with all other changes in that amount since the previously filed notice of sales on SEC Form D, does not result in an increase of more than ten percent.

003.03C Annually, on or before the first anniversary of the filing of the notice of sales on SEC Form D or the filing of the most recent amendment to the notice of sales on SEC From D, if the offering is continuing at that time.

003.04 An issuer that files an amendment to a previously filed notice of sales on SEC Form D must provide current information in response to all requirements of the notice of sales on SEC Form D regardless of why the amendment is filed.

003.05 If the notice required pursuant to this section is not filed within fifteen days of the first sale made in reliance on this exemption, the issuer shall file the information required by 48 NAC 19 and pay an additional late filing fee of two hundred dollars ($200.00).

004 OFFERINGS BY AGRICULTURAL CO-OPERATIVES . An issuer offering a security which is a covered security pursuant to Section 18(b)(4)(C) of the Securities Act of 1933, 15 U.S.C. § 77r(b)(4)(C) and which is exempt from federal registration pursuant to Section 3(a)(5)(B), 15 U.S.C. § 77c(a)(5)(B), there of, shall file the following information with the Director prior to the issuance of such security in this state:

004.01 The name and address of the issuer;

004.02 The place and date of incorporation;

004.03 The type of security being issued;

004.04 The total amount of securities to be sold by the issuer, both in Nebraska and nationwide;

004.05 An indication as to whom sales will be made: present members, patrons, or the general public;

004.06 A description of the method by which the securities will be sold;

004.07 The name and address of the registered broker-dealer who will be selling the securities;

004.08 A balance sheet and income statement for the past two years;

004.09 A description of the intended use of the proceeds;

004.10 The interest rate to be paid, if the offering involves debt securities;

004.11 Evidence of sufficient financial resources to service its debts for the next two years; and

004.12 A filing fee of two hundred dollars ($200.00).

005 OFFERINGS PURSUANT TO REGULATION A, TIER 2 . An issuer offering a security which is a covered security pursuant to Section 18(b)(3) of the Securities Act of 1933, 15 U.S.C. § 77r(b)(3) and which is exempt from federal registration pursuant to Tier 2 of federal Regulation A, 17 CFR 230.251(a) shall submit the following prior to the initial offer and/or sale in this state:

005.01 A completed Regulation A – Tier 2 notice filing form or copies of all documents filed with the Securities and Exchange Commission;

005.02 A consent to service of process on Form U-2 if not filing on the Regulation A – Tier 2 notice filing form; and

005.03 A filing fee of two hundred dollars ($200.00).

006 RESTRICTION ON SALES . All sales of federal covered securities must be effected through a Nebraska-registered agent of a Nebraska-registered broker-dealer, except that this Section does not apply to sales of securities covered by Sections 003 and 005, above, provided no commissions or other remuneration are paid directly or indirectly for soliciting any prospective buyer.

History

Effective 2022-06-13

Chapter 21 North American Securities Administrators Associaton Statements of Policy

Neb. Admin. Code tit. 48, ch. 21 North American Securities Administrators Associaton Statements of Policy {#sec-48-nac-21 omnilex-key=us-ne-regs-official--title-48--48 NAC 21}

001 GENERAL.

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Section 8-1120 of the Securities Act of Nebraska (“Act”).

001.02 The Department has determined that this Rule relating to the registration of securities is consistent with investor protection and is in the public interest.

001.03 The Director may, on a case by case basis, and with prior written notice to the affected persons, require adherence to additional standards or policies, as deemed necessary in the public interest.

001.04 A copy of each North America Securities Administrators Association (“NASAA”) Statement of Policy referenced in section 002 below is available at https://ndbf.nebraska.gov/about/legal/administrative-rules-and-regulation, in NASAA REPORTS published by Commerce Clearing House, and on NASAA’s website at www.nasaa.org.

002 NASAA STATEMENTS OF POLICY. In order to promote uniform regulation, the Director adopts the following NASAA Statements of Policy for issuers registering an offering pursuant to the Act. This rule does not incorporate any subsequent amendments or adoptions:

002.01 “Statement of Policy Regarding Corporate Securities Definitions” as amended on May 6, 2018.

002.02 “Statement of Policy Regarding Underwriting and Selling Expenses, Underwriter’s Warrants and Selling Expenses” as amended on May 6, 2018.

002.03 “Statement of Policy Regarding Promotional Shares” as amended on March 31, 2008.

002.04 “Statement of Policy Regarding Promoters’ Equity Investment” as amended on September 11, 2016.

002.05 “Statement of Policy Regarding Loans and Other Material Transactions” as amended on May 6, 2018.

002.06 “Statement of Policy Regarding the Impoundment of Proceeds” as amended on March 31, 2008.

002.07 “Statement of Policy Regarding Unequal Voting Rights” as amended on September 11, 2016.

002.08 “Statement of Policy Regarding Specificity in Use of Proceeds” as amended on September 11, 2016.

002.09 “Statement of Policy Regarding Unsound Financial Condition” as amended on May 6, 2018.

002.10 “Statement of Policy Regarding Debt Securities” as adopted on April 25, 1993.

002.11 “Statement of Policy Regarding Preferred Stock” as amended on September 11, 2016.

002.12 “Statement of Policy Regarding Options and Warrants” as amended on March 31, 2008.

002.13 “Statement of Policy Regarding Real Estate Investment Trusts” as amended on May 7, 2007.

002.14 “Statement of Policy Regarding Real Estate Programs” as amended on May 7, 2007.

002.15 “Registration of Oil and Gas Programs” as amended on May 6, 2012.

002.16 “Registration of Publicly-Offered Cattle Feeding Programs” as adopted on September 17, 1980.

002.17 “Registration of Commodity Pool Programs” as amended on May 6, 2012.

002.18 “Equipment Programs” as amended on May 6, 2012.

002.19 “Registration of Asset Backed Securities” as amended on May 6, 2012.

002.20 “Statement of Policy Regarding Church Extension Fund Securities” as amended on April 18, 2004.

002.21 “Mortgage Program Guidelines” as amended on May 7, 2007.

002.22 “Omnibus Guidelines” as amended on May 7, 2007, which apply to limited partnerships programs or other entities for which more specific statements of policy have not been adopted by NASAA.

002.23 “Statement of Policy Regarding Use of Electronic Offering Documents and Electronic Signatures” as adopted on May 7, 2017.

003 COMPLIANCE WITH STATEMENTS OF POLICY. An issuer registering an offering that falls within one or more of the statements of policy listed in subsection 002 of this Chapter shall comply with the requirements of said statement of policy or policies.

004 WAIVER OF RULE. While applications not conforming to the standards contained herein are looked upon with disfavor, where good cause is shown, certain provisions of this Rule may be waived by the Director.

History

Effective 2019-11-27

Chapter 37 Sales of Securities at Financial Institutions

Neb. Admin. Code tit. 48, ch. 37 Sales of Securities at Financial Institutions {#sec-48-nac-37 omnilex-key=us-ne-regs-official--title-48--48 NAC 37}

001 GENERAL.

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Section 8-1120(3) of the Securities Act of Nebraska (“Act”).

001.02 The Department has determined that this Rule is consistent with investor protection and is in the public interest.

001.04 The definitions in 48 NAC 2 shall apply to the provisions of this Rule, unless otherwise specified.

001.05 This Rule applies exclusively to broker-dealer services conducted by broker-dealers on the premises of a financial institution where retail deposits are taken. It does not alter or abrogate a broker-dealer’s obligations to comply with other applicable laws, rules, or regulations that may govern the operations of broker-dealers and their agents, including but not limited to, supervisory obligations. This rule does not apply to broker-dealer services provided to non-retail customers.

001.06 Federal statutes and rules of the Securities and Exchange Commission (“SEC”) or the Financial Industry Regulatory Authority (“FINRA”) referenced herein shall mean those statutes and rules as amended on or before the effective date of this Rule. A copy of the applicable statutes or rule referenced in this Rule is attached hereto.

002 DEFINITIONS. For purposes of these rules, the following terms have the meanings indicated:

002.01 “Financial institution” means federal and state-chartered banks, savings and loan associations, savings banks, credit unions, and the subsidiaries and service corporations of such institutions located in Nebraska.

002.02 “Networking arrangement” means a contractual or other arrangement between a broker-dealer and a financial institution pursuant to which the broker-dealer conducts broker-dealer services on the premises of such financial institution where retail deposits are taken.

002.03 “Broker-dealer services” means the investment banking or securities business as defined in paragraph (u) of Article I of the By-Laws of the Financial Industry Regulatory Authority, Inc.

003 STANDARDS FOR BROKER-DEALER CONDUCT. No broker-dealer shall conduct broker-dealer services on the premises of a financial institution where retail deposits are taken unless the broker-dealer complies initially and continuously with the following requirements:

003.01 Wherever practical, broker-dealer services shall be conducted in a physical location distinct from the area in which the financial institution’s retail deposits are taken. In those situations where there is insufficient space to allow separate areas, the broker-dealer has a heightened responsibility to distinguish its services from those of the financial institution. In all situations, the broker-dealer shall identify its services in a manner that clearly distinguishes those services from the financial institution's retail deposit-taking activities. The broker-dealer’s name shall be clearly displayed in the area in which the broker-dealer conducts its services.

003.02 Networking arrangements shall be governed by a written agreement that sets forth the responsibilities of the parties and the compensation arrangements. Networking arrangements must provide that supervisory personnel of the broker-dealer and representatives of state securities authorities, where authorized by state law, will be permitted access to the financial institution’s premises where the broker-dealer conducts broker-dealer services in order to inspect the books and records and other relevant information maintained by the broker-dealer with respect to its broker-dealer services. Management of the broker-dealer shall be responsible for ensuring that the networking arrangement clearly outlines the duties and responsibilities of all parties, including those of financial institution personnel.

003.03 At or prior to the time that a customer’s securities brokerage account is opened by a broker-dealer on the premises of a financial institution where retail deposits are taken, the broker-dealer shall:

003.03A Disclose, orally and in writing, that the securities products purchased or sold in a transaction with the broker-dealer:

003.03A1 Are not insured by the Federal Deposit Insurance Corporation (“FDIC”) or by the National Credit Union Administration (“NCUA”), as applicable;

003.03A2 Are not deposits or other obligations of the financial institution and are not guaranteed by the financial institution; and

003.03A3 Are subject to investment risks, including possible loss of the principal invested.

003.03B Make reasonable efforts to obtain from each customer during the account opening process a written acknowledgment of the disclosures required by Section 003.03A1.

003.03C If broker-dealer services include any written or oral representations concerning insurance coverage, other than FDIC or NCUA insurance coverage, as applicable, then clear and accurate written or oral explanations of the coverage must also be provided to the customers when such representations are first made.

004 COMMUNICATIONS WITH THE PUBLIC.

004.01

004.01A All of the broker-dealer’s confirmations and account statements must indicate clearly that the broker-dealer services are provided by the broker-dealer.

004.01B Advertisements and sales literature that announce the location of a financial institution where broker-dealer services are provided by the broker-dealer, or that are distributed by the broker-dealer on the premises of a financial institution, must disclose that securities products; are not insured by the FDIC or the NCUA, as applicable; are not deposits or other obligations of the financial institution and are not guaranteed by the financial institution; and are subject to investment risks, including possible loss of the principal invested. The shorter, logo format described in Section 004.02A may be used to provide these disclosures.

004.01C Recommendations by a broker-dealer concerning non-deposit investment products with a name similar to that of a financial institution must only occur pursuant to policies and procedures reasonably designed to minimize risk of customer confusion.

004.02

004.02A The following shorter, logo format disclosures may be used by a broker-dealer in advertisements and sales literature, including material published, or designed for use, in radio or television broadcasts, Automated Teller Machine (“ATM”) screens, billboards, signs, posters and brochures, to comply with the requirements of Section 004.01B, provided that such disclosures are displayed in a conspicuous manner:

004.02A1 Not FDIC Insured or Not NCUA Insured, as applicable

004.02A2 No Financial Institution Guarantee

004.02A3 May Lose Value

004.02B As long as the omission of the disclosures required by Section 004.01B would not cause the advertisement or sales literature to be misleading in light of the context in which the material is presented, such disclosures are not required with respect to messages contained in:

004.02B1 Radio broadcasts of thirty seconds or less;

004.02B2 Electronic signs, including billboard-type signs that are electronic, time, and temperature signs and ticker tape signs, but excluding messages contained in such media as television, on-line computer services, or ATMs; and

004.02B3 Signs, such as banners and posters, when used only as location indicators.

005 NOTIFICATION OF TERMINATION. The broker-dealer must promptly notify the financial institution if any agent of the broker-dealer who is employed by the financial institution is terminated for cause by the broker-dealer.

006 CONFLICT WITH FEDERAL REGULATIONS. The Director may by order suspend any provision of this Rule upon a showing that such provision conflicts with any regulation promulgated by a federal regulatory agency or a self-regulatory organization of an industry affected by this Rule.

History

Effective 2017-06-05

Chapter 38 Information Requirements for the Section 8-1111(23) Exemption

Neb. Admin. Code tit. 48, ch. 38 Information Requirements for the Section 8-1111(23) Exemption {#sec-48-nac-38 omnilex-key=us-ne-regs-official--title-48--48 NAC 38}

001 GENERAL.

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Section 8-1120 and Section 8-1111(23) of the Securities Act of Nebraska (“Act”).

001.02 The Department has determined that this Rule regarding securities offerings is consistent with investor protection and is in the public interest.

001.04 The definitions in 48 NAC 2 apply to the provisions of this Rule, unless otherwise specified.

001.05 Federal statutes and rules of the Securities and Exchange Commission (“SEC”) or the Financial Industry Regulatory Authority (“FINRA”) referenced herein means those statutes and rules as amended on or before the effective date of this Rule. A copy of the applicable statutes or rules referenced in this Rule is available as an appendix at www.ndbf.nebraska.gov.

002 ADJUSTMENT OF EXEMPTION AMOUNT. The exemption amount in Section 8-1111(23) of the Act is adjusted to $811,500.00.

003 CONDITIONS OF EXEMPTION. Transactions meeting the following conditions will be deemed exempt from the registration provisions of the Act:

003.01 The proceeds from all sales of securities by the issuer in any two-year period do not exceed the amount provided in Section 002,above, and at least eighty percent of the proceeds are used in Nebraska;

003.02 No commission or other remuneration is paid or given directly or indirectly for soliciting any prospective buyer except to a registered agent of a registered broker-dealer;

003.03 The issuer is not disqualified under Section 007, below;

003.04 The issuer shall file a notice, as specified in Section 004, below, with the Department of Banking and Finance, P.O. Box 95006, Lincoln, Nebraska68509-5006, no later than fifteen business days prior to any sales for which an exemption under this Rule is claimed;

003.05 The issuer shall, within thirty days after the completion of the offering, file with the Director a statement setting forth the number of investors, the total dollar amount raised, and disclosure of the use of proceeds; and

003.06 The offering shall be conducted in compliance with the federal “Intrastate Offers and Sales” exemption, 17 CFR 230.147, or the federal “Intrastate Offering Exemption”, 17 CFR 230.147A.

004 CONTENTS OF NOTICE. The notice submitted prior to making any sales in reliance on this exemption shall include the following information:

004.01 The name, address, telephone number, and email address of the issuer;

004.02 The name and address of each person holding direct or indirect ownership or beneficial interest in the issuer;

004.03 The dollar amount of the offering;

004.04 The type of security beingoffered;

004.05 The manner in which purchasers will be solicited; and

004.06 A statement that the conditions of this exemption will be met, signed under oath or affirmation by an authorized representative of theissuer.

004.07 Every notice and disclosure document filed with the Director shall be signed by a person duly authorized by the issuer.

004.08 The Director may require the filing of additional information if the Director deems it material to the offering.

005 DELIVERY OF DISCLOSURE DOCUMENT. The issuer shall give each prospective investor a copy of the offering disclosure document at least twenty-four hours prior to the investor signing any agreement to purchase the securities or paying any consideration for the securities. The offering disclosure document shall include:

005.01 A description of the proposed use of the proceedsof the offering;

005.02 The name of each partner or limited liability company member of the issuer, officer, director, or person occupying a similar status of the issuer or performing similar functions for the issuer; and

005.03 The financial condition of the issuer.

006 LIMITATIONS ON AVAILABILITY. The exemption provided by this Rule is available only to an issuer of the securities. The exemption is not available for:

006.01 Affiliates of the issuer or any other person for resale of the issuer’s securities;

006.02 Transactions by existing security holders of the issuer;

006.03 Offerings, including “blind pool offerings”, for which the specific business to be engaged in, the specific property to be acquired, or the specific use of the offering proceeds by the issuer is not identified.

007 DISQUALIFICATION FACTORS. This exemption is not available for use by an issuer if the issuer, or any partner or limited liability company member of the issuer, any officer, director, or any person occupying a similar status of the issuer, any person performing similar functions for the issuer, or any person holding a direct or indirect ownership interest in the issuer or in any way a beneficial interest in such sale of securities of the issuer is subject to a disqualification factor enumerated in Section 8-1111(23)(c) of the Act.

008 DISCLOSURE. Nothing in this Rule is intended to, or should be construed as, in any way relieving issuers or persons acting on behalf of issuers from providing to prospective investors disclosure adequate to satisfy the provisions of Section 8-1102(1) of the Act.

009 AVAILABILITY OF EXEMPTION.

009.01 Offers and sales which are exempt under this Rule may not be combined with offers and sales exempt under any other Rule or Section of the Act; however, nothing in this limitation shall act as an election. Should the offer and sale fail to comply with all of the conditions for this exemption, the issuer may claim the availability of any other applicable exemption.

009.02 The exemption is not available to any issuer with respect to any transaction which, although in technical compliance with this Rule, is part of a plan or scheme to evade registration or the conditions or limitations explicitly stated in this Rule.

010 EFFECTIVENESS. A notice of exemption filed pursuant to Section 8-1111(23) of the Act remains effective until the earliest of the following events:

010.01 the amount provided in Section 002, above, in proceeds is raised;

010.02 Two years from the date of the first sale; or

010.03 The issuer files the statement required by Section 002.05, above.

011 BURDEN OF PROOF. In any proceeding involving this Rule, the burden of proving the exemption from registration is upon the person claiming the exemption.

012 INTEGRATION. All offers or sales that are part of the same offering must meet all of the terms and conditions of this Rule. Offers and sales that are made more than six months before the start, or more than six months after completion, of an offering made in reliance on this Rule, will not be considered part of that offering, provided no offers or sales of securities are made by or for the issuer during such periods. 48 NAC 41 identifies the factors that will be considered in determining whether offers and sales should be integrated.

013 CURE ORDER. An issuer which fails to file the notice at least fifteen business days prior to any sale made in reliance on this exemption may request the late filing be cured by complying with 48 NAC 19.

History

Effective 2022-06-13

Chapter 39 Conditions and Information Requirements for the Section 8-1111(24) Crowdfunding Exemption

Neb. Admin. Code tit. 48, ch. 39 Conditions and Information Requirements for the Section 8-1111(24) Crowdfunding Exemption {#sec-48-nac-39 omnilex-key=us-ne-regs-official--title-48--48 NAC 39}

001 GENERAL.

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Section 8-1120 and Section 8-1111(24) of the Securities Act of Nebraska (“Act”).

001.02 The Department has determined that this Rule regarding securities offerings is consistent with investor protection and is in the public interest.

001.04 The definitions in 48 NAC 2 apply to the provisions of this Rule, unless otherwise specified.

001.05 Federal statutes and rules of the Securities and Exchange Commission (“SEC”) or the Financial Industry Regulatory Authority (“FINRA”) referencedherein means those statutes and rules as amended on or before theeffective date of this Rule. A copy of the applicable statutes or rules referenced in this Rule is available as an appendix to this rule at https://ndbf.nebraska.gov/about/legal/administrative-rules-and-regulations.

002 DEFINITIONS. For purposes of this Rule:

002.01 Accredited investor means a bank, a savings institution, a trust company, an insurance company, an investment company as defined in the Investment Company Act of 1940, a pension or profit-sharing trust or other financial institution or institutional buyer, an individual accredited investor, or a broker-dealer, whether the purchaser is acting for itself or in some fiduciary capacity;

002.02 Funding portal means an internet web site that is operated by a portal operator for the offer and sale of securities pursuant to this Rule;

002.03 Individual accredited investor means (A) any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer, (B) any manager of a limited liability company that is the issuer of the securities being offered or sold, (C) any natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his or her purchase, exceeds one million dollars ($1,000,000.00), excluding the value of the primary residence of such person, or (D) any natural person who had an individual income in excess of two hundred thousand dollars ($200,000.00) in each of the two most recent years or joint income with that person’s spouse in excess of three hundred thousand dollars ($300,000.00) in each of those years and has a reasonable expectation of reaching the same income level in the current year; and

002.04 Portal operator means an entity authorized to do business in this state which operates a funding portal and has registered with the Department.

003 ISSUER QUALIFICATION. An issuer offering securities pursuant to this exemption shall meet the following requirements:

003.01 The issuer shall be a business entity that is organized pursuant to the laws of the State of Nebraska and is properly registered with the Nebraska Secretary of State;

003.02 The issuer derived at least eighty percent of its gross revenue during its most recent fiscal year prior to the offering from the operation of a business in Nebraska;

003.03 The issuer had at least eighty percent of its assets located in Nebraska at the end of its most recent semiannual period prior to the offering;

003.04 The issuer will use at least eighty percent of the net proceeds of this offering in connection with the operation of its business or real property in Nebraska or the purchase of real property located in, or the rendering of services within Nebraska; and

003.05 The issuer’s principal office is located in Nebraska.

004 LIMITATIONS ON AVAILABILITY. The exemption provided by this Rule is available only to an issuer of the securities. The exemption is not available for:

004.01 Affiliates of the issuer or any other person for resale of the issuer’s securities;

004.02 Transactions by existing security holders of the issuer;

004.03 An issuer that is either before or because of the offering, an investment company as defined in Section 3 of the Investment Company Act of 1940, 15 U.S.C. 80a-3, an entity that would be an investment company but for the exclusions provided in section 3(c) of the Investment Company Act of 1940, 15 U.S.C. 80a-3(c), or subject to the reporting requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, 15 U.S.C. 78m or 15 U.S.C. 78o(d);

004.04 Offerings which are “blind pool offerings” or other offerings for which the specific business to be engaged in or specific property to be acquired by the issuer is not identified; and

004.05 Offerings in which the issuer plans to engage in a merger or acquisition with an unspecified business entity.

005 DISQUALIFICATION. The exemption in this Rule is not available for the securities of any issuer, if the issuer or any director, executive officer, general partner, managing member, or other person with management authority over the issuer, has been subject to any conviction, order, judgment, decree, or other action specified in Rule 506(d)(1) adopted under the Securities Act of 1933,17 C.F.R. 230.506(d)(1), that would disqualify an issuer under Rule 506(d) adopted under the Securities Act of 1933, 17 C.F.R.230.506(d),from claiming an exemption specified in Rule 506(a) to Rule 506(c) adopted under the Securities Act of 1933, 17 C.F.R. 230.506(a) to 17 C.F.R. 230.506(c). However, this subdivision does not apply if both of the following are met:

005.01 On a showing of good cause and without prejudice to any other action by the Director, the Director determines that it is not necessary under the circumstances that an exemption is denied; and

005.02 The issuer establishes that it made a factual inquiry into whether any disqualification existed under this subdivision but did not know, and in the exercise of reasonable care, could not have known, that a disqualification existed under this subdivision. The nature and scope of the requisite inquiry will vary based on the circumstances of the issuer and the other offering participants.

006 AGGREGATE OFFERING AMOUNT. Except as provided in subsection 006.03 below, the sum of all cash and other consideration to be received for all sales of the security in reliance on the exemption under this subdivision, excluding sales to any accredited investor, does not exceed the following amount:

006.01 If the issuer has not undergone, and made available to each prospective investor and the Director the documentation resulting from, a financial audit of its most recently completed fiscal year that complies with generally accepted accounting principles, one million dollars ($1,000,000.00), less the aggregate amount received for all sales of securities by the issuer within the twelve months before the first offer or sale made in reliance on the exemption under this subdivision; or

006.02 If the issuer has undergone, and made available to each prospective investor and the Director the documentation resulting from, a financial audit of its most recently completed fiscal year that complies with generally accepted accounting principles, two million dollars ($2,000,000.00), less the aggregate amount received for all sales of securities by the issuer within the twelve months before the first offer or sale made in reliance on the exemption under this subsection.

006.03 An offer or a sale to an officer, director, partner, trustee or individual occupying similar status or performing similar functions with respect to the issuer, or to a person owning ten percent or more of the outstanding shares of any class or classes of securities of the issuer does not count towards the monetary limitations in subsections 006.01and 006.02, above.

007 PURCHASER OFFERING LIMIT. The issuer shall not accept more than five thousand dollars ($5,000.00) from any single purchaser, except that such limitation does not apply to sales to an accredited investor. There is no limitation on the amount that an accredited investor may invest in offerings conducted pursuant to this Rule.

008 NOTICE FILING.

008.01 The notice filed by an issuer pursuant to Section 8-1111(24) shall be signed by a person duly authorized by the issuer and shall include the following information:

008.01A A Form NCF containing such information as the Department requires;

008.01B The disclosure document to be provided to investors pursuant to Neb. Rev. Stat. § 8-1111(24)(a)(xi);

008.01C The financial statements prepared in accordance with Section 009, below;

008.01D The escrow agreement required by Section 010,below;

008.01E A copy of the issuer’s articles of incorporation or other documents which indicate the form of organization, and a Certificate of Good Standing issued by the Nebraska Secretary of State within the preceding thirty days;

008.01F A representation stating that all of the conditions of Section 8-1111(24) have been or will be met by the issuer; and

008.01G A filing fee of two hundred dollars ($200.00).

008.02 The notice shall be filed at least ten days prior to the commencement of the offering, except that the Director may waive this requirement for good cause shown.

008.03 An issuer shall not commence offering or selling such security until it has received written or electronic confirmation from the Department that its notice filing has been accepted by the Department.

008.04 The Director may require the filing of corrected or additional information if the Director deems it material to the offering.

008.05 If at any time while the offering is ongoing there is a material change that would affect the accuracy of the information contained in notice filing, the issuer shall file amended information within thirty days. All amendments must first be filed with the Department and be accepted by the Department prior to their use by the issuer.

009 FINANCIAL STATEMENTS. The issuer shall provide the following financial statements for itself and its consolidated subsidiaries, if applicable:

009.01 A balance sheet as of the end of the most recent fiscal year, or, as of a date within one hundred twenty days of the date of the first sale, if the issuer has been in existence for less than one fiscal year; and

009.02 An income statement for the immediate past fiscal year or such shorter period as the issuer, including predecessors, has been in existence.

009.03 If the issuer has not conducted significant operations, a statement of receipts and disbursements shall be included in lieu of a statement of income.

009.04 The financial statements shall be:

009.04A Prepared in accordance with generally accepted accounting principles and audited by an independent accountant;

009.04B Reviewed by an independent accountant within one hundred twenty days before the first sale; or

009.04C In the event that the issuer does not have audited or reviewed financial statements, the financial statements shall be accompanied by an affirmative representation by the issuer, signed by an officer, director or person occupying a similar position, that the statements provide all material information relating to the financial condition of the issuer and are true and accurate to the best of the signer’s knowledge and belief.

009.05 The issuer shall provide the financial statement required by subsection 009.01, above, in connection with income producing assets and/or income producing real property to be purchased with the proceeds of the offering by the issuer.

010 ESCROW AGREEMENT. All funds received from investors shall be deposited into a bank, regulated trust company, savings bank, savings and loan association or a credit union authorized to do business in Nebraska(“financial institution”, collectively) in accordance with the terms of an escrow agreement.

010.01 The financial institution shall not be affiliated with the issuer, any portal operator assisting with the offering, or any officers, director, managing member, or affiliate of the issuer or any portal operator assisting with the offering.

010.02 The escrow agreement shall provide as follows:

010.02A The investor funds will be deposited into an escrow account with the financial institution acting as escrow agent;

010.02B For each investment, the issuer shall provide to the financial institution a copy of the subscription agreement with the names, addresses and respective amounts paid by each investor whose funds comprise each deposit;

010.02C The issuer must raise the minimum offering amount as stated in the disclosure document before the financial institution may release the offering proceeds to the issuer. Such proceeds shall be released to the issuer upon joint written notice from the issuer and the portal operator that the minimum offering amount has been met; and

010.02D If the issuer does not raise the minimum offering amount by the offering deadline, the financial institution shall return all subscription funds, plus any interest earned on the subscription funds, to the investors.

010.02E The escrow agent shall notify the Director in writing no later than five days after the release of proceeds to the issuer, or the return of proceeds to the investors.

010.03 The financial institution may contract with the issuer to collect reasonable fees for its escrow services regardless of whether the minimum target offering amount is reached.

011 METHOD OF OFFERING. All offers and sales of securities pursuant to this Rule shall be made through one or more funding portals operated by a portal operator, subject to the following:

011.01 The portal operator shall, prior to offering securities on its funding portal, conduct a reasonable investigation of the background and regulatory history of each issuer whose securities are to be offered on the funding portal and of each of the issuer’s directors, executive officers, general partners, managing members, or other persons with management authority over the issuer. The portal operator must deny an issuer access to its funding portal if the portal operator has a reasonable basis for believing that:

011.01A The issuer does not meet the requirements of Section 003, above, or the exemption is not available for the issuer pursuant to Section 004, above;

011.01B The issuer or any of its directors, executive officers, general partners, managing members, or other persons with management authority over the issuer, is subject to a disqualification under Section 005, above;

011.01C The issuer has engaged in, is engaging in, or the offering involves any act, practice, or course of business that will, directly or indirectly, operate as a fraud or deceit upon any person; or

011.01D It cannot adequately or effectively assess the risk of fraud by the issuer or its potential offering.

011.02 The portal operator shall establish and maintain, during the time that the offering appears on the funding portal, a secure method of communication through the funding portal itself that will permit potential and actual investors to communicate with one another and with representatives of the issuer about the offering. Further, the foregoing communications must be made visible and accessible, at all times during the time the offering appears on the qualified portal, to all those with access to the offering materials of issuer.

011.03 The portal operator shall obtain, either in writing or electronically, an affirmative declaration from a potential purchaser that the potential purchaser is a Nebraska resident before allowing such person any access to any information concerning an offering conducted pursuant to this subsection. In the event that portal operator has knowledge or reason to believe that a potential investor is not a Nebraska resident, the portal operator shall deny or revoke the potential investor’s access to such information.

011.04 The portal operator shall make available to potential investors via the funding portal, the disclosure document prescribed by Neb. Rev. Stat. § 8-1111(24)(a)(xi). The disclosure document shall be in a format that reasonably permits a person accessing the funding portal to print, save, download, or otherwise store the disclosure document.

011.05 The portal operator shall in connection with a sale of a security listed on the funding portal:

011.05A Obtain the certification from the investor prescribed by Neb. Rev. Stat. § 8-1111(24)(a)(viii).

011.05B Obtain certification from the investor that the investor qualifies as an accredited investor as defined in this subdivision, if the investor is investing more than five thousand dollars ($5,000.00).

011.05C Obtain an affirmative representation, in writing or electronically, that the investor is a resident of Nebraska along with documentation evidencing such residence. Any of the following documents are acceptable to prove residence in the state of Nebraska:

011.05C1 A valid driver’s license or identification card issued by the State of Nebraska;

011.05C2 A valid Nebraska voter registration card; or

011.05C3 Property tax records showing that the investor owns and occupies property in this state as his or her principal residence.

011.05D Provide to the issuer a copy of the signed subscription agreement and all documents collected from the investor pursuant to subsections 011.05A through 011.05C, above.

012 ADVERTISING.

012.01 A general announcement by an issuer or funding portal regarding an issuer’s offering being made in reliance on this subdivision shall not be considered an offer of a security so long as only the following are included:

012.01A A statement that the issuer is conducting an offering, the name of the portal operator conducting the offering and a link directing the potential investor to the funding portal;

012.01B The maximum amount of the offering; and

012.01C Factual information about the legal identity and business location of the issuer, limited to the name of the issuer of the security, the address, and a brief description of the business of the issuer.

012.02 Any general announcement regarding an issuer’s offering being made in reliance on this subdivision must contain a statement making it clear that the offering is directed only to residents of Nebraska.

013 RESTRICTIONS ON RESALE. While the securities are being offered pursuant to this Rule and for a period of nine months from the date of the last sale by the issuer of such securities, all resales by any person shall be made only to residents of Nebraska.

014 REPORTS TO INVESTORS. An issuer shall provide a report to investors which meets the following requirements:

014.01 The report shall contain the following information:

014.01A Compensation received by each director and executive officer, including cash compensation earned since the previous report and on an annual basis and any bonuses, stock options, other rights to receive securities of the issuer or any affiliate of the issuer, or other compensation received; and

014.01B An analysis by management of the issuer of the business operations and financial condition of the issuer.

014.02 The report shall be prepared and delivered no later than forty-five days after the end of each fiscal quarter.

014.03 In lieu of delivering a report to each investor, the issuer may post the report on a funding portal, subject to the following:

014.03A The issuer has notified each investor in writing that it intends to post the report on the funding portal, provided such notice contains the following:

014.03A1 The Uniform Resource Locator for the funding portal on which the report will be posted; and

014.03A2 A statement that the investor can elect to receive the report in writing, and information as to how the investor can make such election.

014.03B The report shall be posted no later than forty-five days after the end of each fiscal quarter;

014.03C The report shall remain on the funding portal until the report for the succeeding quarter is posted; and

014.03D The issuer shall provide a written copy to any investor who elects to receive a written copy.

014.04 A copy of the report shall be filed with the Department no later than forty-five days after the close of each fiscal quarter.

015 RECORDS. An issuer shall maintain and preserve for a period of five years from either the date of the document or communication or the date of the closing or termination of the securities offering, whichever is later, records related to offers and sales made pursuant to this exemption.

015.01 The records that shall be maintained include, but are not limited to, the following:

015.01A The disclosure document provided to prospective investors;

015.01B The signed investor certification prescribed by Neb. Rev. Stat. § 8-1111(24)(a)(viii);

015.01B All subscription agreements;

015.01C All information used to establish that an issuer, prospective purchaser, or investor is a Nebraska resident;

015.01D All information used to establish that a prospective purchaser or investor is an accredited investor as defined in subsection 002.01, above;

015.01E All agreements and/or contracts between the issuer and the portal operator;

015.01F All escrow agreements between the issuer and a financial institution pursuant to section 010, above;

015.01G All correspondence or other communications with portal operators, financial institutions acting as escrow agents, prospective purchasers, and/or investors;

015.01H Each quarterly report prepared pursuant to section 014, above; and

015.01I All other records relating to the offers and/or sales of securities made through the funding portal.

015.02 An issuer shall, upon written request of the Director, furnish to the Director any records required to be maintained and preserved under this subdivision.

015.03 The records required to be kept and preserved under this Rule must be maintained in a manner, including by any electronic storage media, that will permit the immediate location of any particular document so long as such records are available for immediate and complete access by representatives of the Director. Any electronic storage system must preserve the records exclusively in a nonrewriteable, nonerasable format; verify automatically the quality and accuracy of the storage media recording process; serialize the original and, if applicable, duplicate units storage media, and time-date for the required period of retention the information placed on such electronic storage media; and be able to download indexes and records preserved on electronic storage media to an acceptable medium. In the event that a records retention system commingles records required to be kept under this subdivision with records not required to be kept, representatives of the Director may review all commingled records.

016 DISCLOSURE. Nothing in this Rule is intended to, or should be construed as, in any way relieving issuers or persons acting on behalf of issuers from providing to prospective investors disclosure adequate to satisfy the provisions of Section 8-1102(1) of the Act.

017 AVAILABILITY OF EXEMPTION.

017.01 Offers and sales which are exempt under this Rule may not be combined with offers and sales exempt under any other Rule or Section of the Act; however, nothing in this limitation shall act as an election. Should the offer and sale fail to comply with all of the conditions for this exemption, the issuer may claim the availability of any other applicable exemption.

017.02 The exemption is not available to any issuer with respect to any transaction which, although in technical compliance with this Rule, is part of a plan or scheme to evade registration or the conditions or limitations explicitly stated in this Rule.

018 BURDEN OF PROOF. In any proceeding involving this Rule, the burden of proving the exemption from registration is upon the person claiming the exemption.

History

Effective 2022-06-13

Chapter 40 Portal Operators

Neb. Admin. Code tit. 48, ch. 40 Portal Operators {#sec-48-nac-40 omnilex-key=us-ne-regs-official--title-48--48 NAC 40}

001 GENERAL .

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Section 8-1111 (24) and Section 8-1120(3) of the Securities Act of Nebraska ("Act").

001.02 The Department has determined that this Rule regarding securities offerings is consistent with investor protection and is in the public interest.

001.04 The definitions in 48 NAC 2 shall apply to the provisions of this Rule, unless otherwise specified.

001.05 Federal statutes and rules of the Securities and Exchange Commission ("SEC") or the Financial Industry Regulatory Authority ("FINRA") referenced herein shall mean those statutes and rules as amended on or before the effective date of this Rule. A copy of the applicable statutes or rules referenced in this Rule is attached hereto.

002 DEFINITIONS . For purposes of this Rule:

002.02 Funding portal means an internet web site that is operated by a portal operator for the offer and sale of securities pursuant to this Rule;

002.03 Individual accredited investor means (A) any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer, (B) any manager of a limited liability company that is the issuer of the securities being offered or sold, (C) any natural person whose individual net worth, or joint net worth with that person's spouse, at the time of his or her purchase, exceeds one million dollars ($1,000,000.00), excluding the value of the primary residence of such person, or (D) any natural person who had an individual income in excess of two hundred thousand dollars ($200,000.00) in each of the two most recent years or joint income with that person's spouse in excess of three hundred thousand dollars ($300,000.00) in each of those years and has a reasonable expectation of reaching the same income level in the current year; and

002.04 Portal operator means an entity authorized to do business in this state which operates a funding portal and has registered with the Department.

003 REGISTRATION . A portal operator shall register with the Department prior to establishing a funding portal to offer securities pursuant to this Rule. A portal operator seeking registration shall submit the following to the Department:

003.01 A Form NPO containing such information as the Department requires;

003.02 A copy of the portal operator's articles of incorporation or other documents which indicate form of organization, and a certificate of good standing issued by the state of incorporation within the preceding thirty days;

003.03 For portal operators not incorporated or organized in Nebraska, a Certificate of Foreign Authority or Certificate of Good Standing issued by the Nebraska Secretary of State within the preceding thirty days;

003.04 For portal operators who are not registered with the Department as a broker-dealer, a certification affirming that the portal operator is in compliance, and will continue to comply, with Section 004, below;

003.05 A broker-dealer that is registered with the Department that operates a funding portal offering securities pursuant to this Rule must register as a portal operator by submitting the information required in this section except that the filing fee shall be waived;

003.06 A portal operator shall not commence operation of a funding portal until it has received written or electronic confirmation from the Department that its registration has been accepted by the Department; and

003.07 A portal operator shall notify the Department no later than thirty days after an event or circumstance occurs which causes any of the information or material submitted as part of its application to become inaccurate.

004 NON BROKER-DEALER PORTAL OPERATORS . A portal operator is not required to register as a broker-dealer provided that all of the following apply:

004.01 The portal operator shall not offer investment advice or recommendations;

004.02 The portal operator shall not solicit purchases, sales, or offers to buy the securities offered or displayed on its funding portal;

004.03 The portal operator shall not compensate employees, agents, or other persons for the solicitation, or based on the sale, of securities displayed or referenced on its funding portal;

004.04 The portal operator shall not be compensated based on the amount of securities sold, and shall not hold, manage, possess, or otherwise handle investor funds or securities;

004.05 The portal operator shall not identify, promote, or otherwise refer to any individual security offered on its funding portal in any advertising conducted by the portal operator;

004.06 The portal operator shall not operate or facilitate a secondary market in securities;

004.07 A portal operator shall not invest in any offering conducted pursuant to this Rule; and

004.08 Neither the portal operator, nor any director, executive officer, general partner, managing member, or other person with management authority over the portal operator, has been subject to any conviction, order, judgment, decree, or other action specified in Rule 506( d)( 1) adopted under the Securities Act of 1933, 17 C.F.R. 230.506(d)(1), that would disqualify an issuer under Rule 506(d) adopted under the Securities Act of 1933, 17 C.F.R. 230.506(d), from claiming an exemption specified in Rule 506(a) to Rule 506( c) adopted under the Securities Act of 1933, 17 C.F.R. 230.506(a) to 17 C.F.R. 230.506(c). However, this subdivision does not apply if both of the following are met:

004.08A On a showing of good cause and without prejudice to any other action by the Director, the Director determines that it is not necessary under the circumstances that an exemption is denied; and

004.08B The portal operator establishes to the satisfaction of the Director, that it made a factual inquiry into whether any disqualification existed under this subdivision but did not know, and in the exercise of reasonable care, could not have known, that disqualification existed under this subdivision.

004.09 The portal operator may charge the issuer a fee for offering the issuer's securities on its funding portal. Such fee shall be either a fixed amount for each offering, a variable amount based upon the length of time that the securities are offered on the funding portal, or a combination of the fixed and variable amount.

005 ADDITIONAL SERVICES . The portal operator may offer services to the issuer that the portal operator deems appropriate or necessary to meet the criteria for this exemption. Such activities may include, but are not limited to, the following:

005.01 Assistance with the development of a business plan;

005.02 Ministerial assistance in completion of crowdfunding exemption filings under these Rules;

005.03 Referral to legal services;

005.04 Referral to business consulting and accounting services to assist with compiling and reporting financial information required by 48 NAC 39;

005.05 Other technical assistance in preparation for a crowdfunding offering by the issuer; and

005.06 Submission of exemption materials to the Director.

006 DEPARTMENT ACCESS TO FUNDING PORTAL . A portal operator shall provide the Department with the same access to every part of the funding portal that is accessible to investors and potential investors.

007 RECORDKEEPING . A portal operator shall maintain and preserve for a period of five years from either the date of the document or communication or the date of the closing or termination of the securities offering, whichever is later, records related to offers and sales made through the Internet website and to transactions where the portal receives compensation, subject to the following:

007.01 The records that shall be maintained include, but are not limited to, the following:

007.01A Records of compensation received for acting as a portal operator, including the name of the payer, the date of payment, name of the issuer, and name of the investor;

007.01B Copies of information provided by the portal operator to issuers offering securities through the portal, prospective purchasers, and investors;

007.01C All agreements and/or contracts between the portal operator and an issuer, prospective purchaser, or investor;

007.01D All information used to establish that an issuer, prospective purchaser, or investor is a Nebraska resident;

007.01E All information used to establish that a prospective purchaser or investor is an accredited investor as defined in subsection 002.01, above

007.01F All correspondence or other communications with issuers, prospective purchasers, and/or investors;

007.01G All information made available through the funding portal relating to an offering;

007.01H Ledgers, or other records, that reflect all assets and liabilities, income and expense, and capital accounts; and

007.01I All other records relating to the offers and/or sales of securities made through the funding portal.

007.02 A portal operator shall, upon written request of the Director, furnish to the Director any records required to be maintained and preserved under this subdivision.

007.03 The records required to be kept and preserved under this Rule must be maintained in a manner, including by any electronic storage media, that will permit the immediate location of any particular document so long as such records are available for immediate and complete access by representatives of the Director. Any electronic storage system must preserve the records exclusively in a nonrewriteable, nonerasable format; verify automatically the quality and accuracy of the storage media recording process; serialize the original and, if applicable, duplicate units storage media, and time-date for the required period of retention the information placed on such electronic storage media; and be able to download indexes and records preserved on electronic storage media to an acceptable medium. In the event that a records retention system commingles records required to be kept under this subdivision with records not required to be kept, representatives of the Director may review all commingled records.

History

Effective 2016-05-11

Chapter 41 Integration of Exempt Offerings Pursuant to Section 8-1111

Neb. Admin. Code tit. 48, ch. 41 Integration of Exempt Offerings Pursuant to Section 8-1111 {#sec-48-nac-41 omnilex-key=us-ne-regs-official--title-48--48 NAC 41}

001 GENERAL.

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Section 8-1120(3) of the Securities Act of Nebraska (“Act”).

001.02 The Department has determined that this Rule relating to integration of offerings is consistent with investor protection and is in the public interest.

001.03 The definitions in 48 NAC 2 shall apply to the provisions of this Rule, unless otherwise specified.

002 INTEGRATION OF OFFERINGS.

002.01 An offering made by an issuer attempting to rely on the exemptions from registration provided by Section 8-1111 of the Securities Act must be separate and distinct from any other offering. Offers and sales of an offering will be deemed integrated with offers and sales of another offering when a review of the integration factors provided below indicates that the offers and sales are part of a larger offering. Integration may occur between two claimed exempt offerings as well as between a claimed exempt offering and a registered offering.

002.02 The following five factors are deemed relevant to a determination as to whether two different offerings are in fact integrated and thus part of a larger offering:

002.02A The different offerings are part of a single plan of financing;

002.02B The offerings involve the issuance of the same class of security;

002.02C The offerings are made at or about the same time;

002.02D The same type of consideration is to be received; and

002.02E The offerings are made for the same general purpose.

002.02 The determination as to whether integration has occurred between two offerings shall be made on a case by case basis. The presence of all the integration factors shall not be required to establish the integration of two offerings.

History

Effective 2016-05-11

Chapter 42 Exclusion of Investment Advisers to Private Funds from the Definition of "investment Adviser"

Neb. Admin. Code tit. 48, ch. 42 Exclusion of Investment Advisers to Private Funds from the Definition of "investment Adviser" {#sec-48-nac-42 omnilex-key=us-ne-regs-official--title-48--48 NAC 42}

001 GENERAL .

001.01 This Rule has been promulgated pursuant to authority delegated to the Director in Section 8-1101 (7) and Section 8-1120(3) of the Securities Act of Nebraska ("Act").

001.02 The Department has determined that this Rule relating to investment advisers to private funds is consistent with investor protection and is in the public interest.

001.04 The definitions in 48 NAC 2 shall apply to the provisions of this Rule, unless otherwise specified.

002 DEFINITIONS . For purposes of this Rule, the following definitions shall apply:

002.01 "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.

002.02 "Private fund adviser" means an investment adviser who provides advice solely to one or more qualifying private funds.

002.03 "Qualifying private fund" means a private fund that meets the definition of a qualifying private fund in SEC Rule 203(m)-1, 17 C.F.R. 275.203(m)-1.

002.04 "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 Investment Company Act of 1940, 15 U.S.C. 80a-3(c)(1).

002.05 "Venture capital fund" means a private fund that meets the definition of a venture capital fund in SEC Rule 203(1)-1, 17 C.F.R. § 275.203(1)-1.

003 EXCLUSION FOR PRIVATE FUND ADVISERS . Subject to the additional requirements of section 004, below, a private fund adviser shall be excluded from the definition of "investment adviser" pursuant to Neb. Rev. Stat. § 8-1101 (7)(i) if the private fund adviser satisfies each of the following conditions:

003.01 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 SEC Regulation D, 17 C.F.R. § 230.506(d)(1); and

003.02 The private fund adviser files with the Department each report and amendment thereto that an exempt reporting adviser is required to file with the Securities and Exchange Commission pursuant to SEC Rule 204-4, 17 C.F.R. § 275.204-4.

004 ADDITIONAL REQUIREMENTS FOR PRIVATE FUND ADVISERS TO CERTAIN 3(C)(1) FUNDS . In order to qualify for the exclusion described in section 003, above, of this regulation, 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 subsections 003.01 and 003.02, above, comply with the following requirements:

004.01 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 SEC Rule 205-3, 17 C.F.R. § 275.205-3, at the time the securities are purchased from the issuer;

004.02 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:

004.02A All services, if any, to be provided to individual beneficial owners;

004.02B All duties, if any, the investment adviser owes to the beneficial owners; and

004.02C Any other material information affecting the rights or responsibilities of the beneficial owners.

004.03 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.

005 FEDERAL COVERED INVESTMENT ADVISERS . If a private fund adviser is registered with the Securities and Exchange Commission, the adviser shall not be eligible for this exclusion and shall comply with the state notice filing requirements applicable to federal covered investment advisers in Neb. Rev. Stat. § 8-1103(2)(b).

006 INVESTMENT ADVISER REPRESENTATIVES . A person is exempt from the registration requirements of Neb. Rev. Stat. § 8-1103(2)(a) if he or she is employed by or associated with a private fund adviser that is excluded from the definition of investment adviser in this state pursuant to this regulation and does not otherwise act as an investment adviser representative.

007 ELECTRONIC FILING . The report filings described in subsection 003.02, above, shall be made electronically through the CRD/IARD. A report shall be deemed filed when the report is filed and accepted by the CRD/IARD on the state's behalf.

008 TRANSITION . An investment adviser who becomes ineligible for the exclusion provided by this Rule must comply with all applicable laws and rules requiring registration or notice filing within ninety days from the date the investment adviser's eligibility for this exclusion ceases.

009 WAIVER AUTHORITY WITH RESPECT TO STATUTORY DISQUALIFICATION . Subsection 003.01, above, shall not apply upon a showing of good cause and without prejudice to any other action of the Department, if the Director determines that it is not necessary under the circumstances that an exclusion be denied.

010 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 subsection 004.01, above, is eligible for the exclusion contained in section 003, above, of this regulation if the following conditions are satisfied:

010.01 The subject fund existed prior to the effective date of this regulation;

010.02 As of the effective date of this regulation, the subject fund ceases to accept beneficial owners who are not qualified clients, as described in subparagraph (c)(1) of this regulation;

010.03 The investment adviser discloses in writing the information described in subsection 004.02, above, to all beneficial owners of the fund; and

010.04 As of the effective date of this regulation, the investment adviser delivers audited financial statements as required by subsection 004.03

History

Effective 2016-05-11

Neb. Admin. Code tit. 48 — Banking and Finance

Chapter 1 General Provisions

Neb. Admin. Code tit. 48, ch. 1 General Provisions {#sec-48-nac-1 omnilex-key=us-ne-regs-official--title-48--48 NAC 1}

Chapter 2 Definitions

Neb. Admin. Code tit. 48, ch. 2 Definitions {#sec-48-nac-2 omnilex-key=us-ne-regs-official--title-48--48 NAC 2}

Chapter 3 Definition of an Offer

Neb. Admin. Code tit. 48, ch. 3 Definition of an Offer {#sec-48-nac-3 omnilex-key=us-ne-regs-official--title-48--48 NAC 3}

Chapter 4 Broker-Dealers

Neb. Admin. Code tit. 48, ch. 4 Broker-Dealers {#sec-48-nac-4 omnilex-key=us-ne-regs-official--title-48--48 NAC 4}

Chapter 5 Issuer-Dealers

Neb. Admin. Code tit. 48, ch. 5 Issuer-Dealers {#sec-48-nac-5 omnilex-key=us-ne-regs-official--title-48--48 NAC 5}

Chapter 6 Agents of Broker-Dealers

Neb. Admin. Code tit. 48, ch. 6 Agents of Broker-Dealers {#sec-48-nac-6 omnilex-key=us-ne-regs-official--title-48--48 NAC 6}

Chapter 7 Investment Advisers

Neb. Admin. Code tit. 48, ch. 7 Investment Advisers {#sec-48-nac-7 omnilex-key=us-ne-regs-official--title-48--48 NAC 7}

Chapter 8 Federal Covered Advisers

Neb. Admin. Code tit. 48, ch. 8 Federal Covered Advisers {#sec-48-nac-8 omnilex-key=us-ne-regs-official--title-48--48 NAC 8}

Chapter 9 Investment Adviser Representatives

Neb. Admin. Code tit. 48, ch. 9 Investment Adviser Representatives {#sec-48-nac-9 omnilex-key=us-ne-regs-official--title-48--48 NAC 9}

Chapter 10 Recordkeeping by Investment Advisers

Neb. Admin. Code tit. 48, ch. 10 Recordkeeping by Investment Advisers {#sec-48-nac-10 omnilex-key=us-ne-regs-official--title-48--48 NAC 10}

Chapter 11 Performance Based Compensation

Neb. Admin. Code tit. 48, ch. 11 Performance Based Compensation {#sec-48-nac-11 omnilex-key=us-ne-regs-official--title-48--48 NAC 11}

Chapter 12 Fraudulent, Dishonest and Unethical Business Practices

Neb. Admin. Code tit. 48, ch. 12 Fraudulent, Dishonest and Unethical Business Practices {#sec-48-nac-12 omnilex-key=us-ne-regs-official--title-48--48 NAC 12}

Chapter 13 Approved Exchanges for the Section 8-1110(5) Exchange Exemption

Neb. Admin. Code tit. 48, ch. 13 Approved Exchanges for the Section 8-1110(5) Exchange Exemption {#sec-48-nac-13 omnilex-key=us-ne-regs-official--title-48--48 NAC 13}

Chapter 14 Record Keeping Requirements for the Section 8-1111(3) Exemption

Neb. Admin. Code tit. 48, ch. 14 Record Keeping Requirements for the Section 8-1111(3) Exemption {#sec-48-nac-14 omnilex-key=us-ne-regs-official--title-48--48 NAC 14}

Chapter 15 Information Requirements for the Section 8-1111(9) De Minimus Exemption

Neb. Admin. Code tit. 48, ch. 15 Information Requirements for the Section 8-1111(9) De Minimus Exemption {#sec-48-nac-15 omnilex-key=us-ne-regs-official--title-48--48 NAC 15}

Chapter 16 Information Requirements for the Section 8-1111(15) Cooperative and Limited Cooperative Associaton Exemption

Neb. Admin. Code tit. 48, ch. 16 Information Requirements for the Section 8-1111(15) Cooperative and Limited Cooperative Associaton Exemption {#sec-48-nac-16 omnilex-key=us-ne-regs-official--title-48--48 NAC 16}

Chapter 18 Information Requirements for the Section 8-1111(20) Nebraska Intrastate Issuer Exemption

Neb. Admin. Code tit. 48, ch. 18 Information Requirements for the Section 8-1111(20) Nebraska Intrastate Issuer Exemption {#sec-48-nac-18 omnilex-key=us-ne-regs-official--title-48--48 NAC 18}

Chapter 19 Requests for Orders Curing Late Notice Filings

Neb. Admin. Code tit. 48, ch. 19 Requests for Orders Curing Late Notice Filings {#sec-48-nac-19 omnilex-key=us-ne-regs-official--title-48--48 NAC 19}

Chapter 20 Federal Covered Securities

Neb. Admin. Code tit. 48, ch. 20 Federal Covered Securities {#sec-48-nac-20 omnilex-key=us-ne-regs-official--title-48--48 NAC 20}

Chapter 21 North American Securities Administrators Associaton Statements of Policy

Neb. Admin. Code tit. 48, ch. 21 North American Securities Administrators Associaton Statements of Policy {#sec-48-nac-21 omnilex-key=us-ne-regs-official--title-48--48 NAC 21}

Chapter 37 Sales of Securities at Financial Institutions

Neb. Admin. Code tit. 48, ch. 37 Sales of Securities at Financial Institutions {#sec-48-nac-37 omnilex-key=us-ne-regs-official--title-48--48 NAC 37}

Chapter 38 Information Requirements for the Section 8-1111(23) Exemption

Neb. Admin. Code tit. 48, ch. 38 Information Requirements for the Section 8-1111(23) Exemption {#sec-48-nac-38 omnilex-key=us-ne-regs-official--title-48--48 NAC 38}

Chapter 39 Conditions and Information Requirements for the Section 8-1111(24) Crowdfunding Exemption

Neb. Admin. Code tit. 48, ch. 39 Conditions and Information Requirements for the Section 8-1111(24) Crowdfunding Exemption {#sec-48-nac-39 omnilex-key=us-ne-regs-official--title-48--48 NAC 39}

Chapter 40 Portal Operators

Neb. Admin. Code tit. 48, ch. 40 Portal Operators {#sec-48-nac-40 omnilex-key=us-ne-regs-official--title-48--48 NAC 40}

Chapter 41 Integration of Exempt Offerings Pursuant to Section 8-1111

Neb. Admin. Code tit. 48, ch. 41 Integration of Exempt Offerings Pursuant to Section 8-1111 {#sec-48-nac-41 omnilex-key=us-ne-regs-official--title-48--48 NAC 41}

Chapter 42 Exclusion of Investment Advisers to Private Funds from the Definition of "investment Adviser"

Neb. Admin. Code tit. 48, ch. 42 Exclusion of Investment Advisers to Private Funds from the Definition of "investment Adviser" {#sec-48-nac-42 omnilex-key=us-ne-regs-official--title-48--48 NAC 42}

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