A pooled investment fund is created to pool money from multiple investors and is required to be registered, notice filed or can be exempt from registration. Some pooled investment funds, such as items 2 and 3 below, may require an investment adviser registered with the Alabama Securities Commission. The Commission website provides links to the registration requirements for investment advisers and our de minimis exemption for investment advisers, referenced above. Further information about the registration of dealers, agents, investment advisers and investment adviser representatives can be found in the Commission Administrative Code Chapter 830-X-3.

Other pooled investment funds, such as those found in item 1 below, may be exempt from the investment adviser registration provisions of the Alabama Securities Act. There is information on our website regarding our Private Fund Exemption that exempts 3(c)(1) and 3(c)(7) funds from the Alabama statutory requirement of having a registered investment adviser. The exemption is titled Order Granting Exemption from the Registration Requirements for certain Investment Advisers to Private funds and their Investment Adviser Representative.

1. Private fund- an issuer that qualifies for the exclusion from the definition of an investment company pursuant to sections 3(c)(1) and/or 3(c)(7) of the Investment Company Act of 1940 (“Company Act”), as amended.
   1. 3(c)(1)- a pooled investment vehicle that is excluded from the definition of investment company
      in the Company Act because it has no more than 100 beneficial owners (or, in the case of a
      qualifying venture capital fund, 250 beneficial owners) and otherwise meets criteria outlined in
      Section 3(c)(1) of the Company Act. 15 U.S.C. § 80a-3(c)(1). This fund is exempt from the
      investment adviser registration provisions of the Alabama Securities Act.
   2. 3(c)(7)- a pooled investment vehicle that is excluded from the definition of investment company in the Company Act because it is limited to investors that are qualified purchasers and otherwise meets criteria outlined in Section 3(c)(7) of the Company Act. 15 U.S.C. § 80a-3(c)(7). This fund is exempt from the investment adviser registration provisions of the Alabama Securities Act.
   3. A Venture Capital Fund is a type of private fund, either 3(c)(1) or 3(c)(7), that is managed by a venture capital firm. SEC Rule 203(l)-1, 17 C.F.R. § 275.203(l)-1.
   4. Private Equity Fund is a type of private fund, either 3(c)(1) or 3(c)(7), that is managed by a private equity firm. SEC Rule 203(m)-1, 17 C.F.R. § 275.203(m)-1.
2. Real Estate Funds 3(c)(5). a type of private fund focused on real estate investments that is exempt from certain regulations under the Company Act. It exempts real estate funds that are primarily engaged in purchasing or acquiring mortgages, liens, or interests in real estate. Real estate investment trusts (REITs) and other real estate-focused funds often utilize this exemption. 15 U.S.C. § 80a-3(c)(5). Please review the Commission investment adviser registration requirements
   § 8-6-3(b)(1), Code of Alabama (1975) as well as the de minimis exemption requirements for investment advisers in § 8-6-3(b)(2) and (3), Code of Alabama (1975). If the de minimis exemption cannot be claimed, then registration will be required.
3. Securities being offered through Membership Interest- a security that represents an ownership interest—or equity—in a limited liability company (LLC), represented on a company’s capitalization table either by percentages or by units. The terminology used to describe the ownership and governance of LLCs differs from that of corporations, such as members instead of shareholders, an operating agreement instead of bylaws, and membership interests or units instead of shares or stock. An LLC may assign different levels of voting and economic rights to members by issuing different classes of membership interest. Please review the Commission investment adviser registration and exempt security requirements found in §§ 8-6-3 and 8-6-10, Code of Alabama (1975) and the Commission Administrative Code Chapters 830-X-3 and 830-X-6 for additional details on registration requirements if an exemption from registration cannot be claimed.