Reform & Integrity Act 2022 - Compliance Support for Regional Centers
The EB-5 Reform and Integrity Act of 2022 has introduced significant requirements for regional centers. It mandates that regional centers, their associated entities, and all affiliated parties must adopt policies and procedures to ensure compliance with U.S. federal and state securities laws.
EB5 Compliance offers specialized RIA 2022 compliance services for the EB-5 industry. These services include thorough due diligence on projects and funds, background checks on management, examination of agent agreements, I-956Ks, disclosure of fees, and analysis of investor subscription forms. By ensuring compliance with securities laws, EB5 Compliance enables Regional Centers to confidently certify RIA 2022 compliance.
Expertise in Broker-Dealer Services and the EB-5 Program
With over a decade of experience in providing securities compliance to EB-5 firms and investors, we are a trusted partner committed to upholding the integrity of your Regional Center.
“They understand the proper relationship between immigration and securities law and economic job creation models to properly advise their clients.”
Our Services
We provide Policies and Procedures Compliance Verification to ensure that the Regional Center and New Commercial Enterprise comply with regulatory requirements. If you do not have an EB-5 Policies and Procedures Manual, we can provide one for you.
Due Diligence
In assessing the NCE offering documents, our goal is to achieve complete transparency in accordance with the requirements of the Securities Exchange Act. We carefully examine the disclosures of any exemptions used, as well as all relevant information, including material risks, ongoing litigation, and significant events related to management backgrounds.
Evaluation of Job-Creating Entity (JCE)
We assess the viability of the project by reviewing the business plan, permits, key agreements, and funding sources. We evaluate job creation estimates, TEA designation, and program compliance. Additionally, we review financial projections, market feasibility, and valuation reports based on realistic assumptions. Finally, we conduct a site visit to the project location to assess demand generators and meet with management.
Assessment of New Commercial Enterprise (NCE)
Our evaluation focuses on the New Commercial Enterprise's adherence to EB-5 program requirements and the fund's structure. We analyze the key terms in the offering documents, including provisions for addressing I-526E denial, exit strategies for investors, investor distributions, and communication methods.
Regional Center Evaluation
Our evaluation of the Regional Center encompasses aspects such as USCIS authorization and adherence to program requirements, including the submission of annual reports and certifications.
Management Background
We conduct background checks on individuals involved with the JCE, NCE, and Regional Center to ensure eligibility. We review filed Form I-956Hs of managers, affiliates, directors, and officers in accordance with USCIS regulations. Our evaluation also includes identifying potential conflicts of interest.
Marketing and Sales Review
We continuously oversee sales and marketing materials, review promoter agreements and I-956K forms, assess due diligence on agents, ensuring compliance with securities laws, securely store approved materials with version control, and conducting investor verification to comply with AML and KYC requirements.
Promoter Registration and Agreements
We review and assess all agent agreements and promoter I-956K forms to ensure that all promoters involved in soliciting investors comply with regulatory requirements. Our assessment includes evaluating the NCE's due diligence on these agents and confirming the presence of proper agreements with clearly outlined compensation. We also verify compliance with applicable securities laws, USCIS rules, and the Regional Center's Policies and Procedures manual.
Review of Marketing Materials
Our staff reviews all marketing materials to ensure compliance with securities laws. This includes identifying and addressing any misleading information, exaggerated claims, or guarantees. We also provide guidance on making necessary corrections to comply with securities laws.
Investor Verification
We check investor backgrounds to make sure we have all the necessary documentation and we keep records of personal information, disclosure statements, and subscription packages. This includes collecting investor questionnaires and fee disclosure forms, making copies of passports or other IDs for KYC purposes, running background and OFAC checks, confirming accredited investor status if applicable, and reviewing signed investor documents for completion and signatures.
Secure Storage and Version Control
All approved marketing materials are securely stored and maintained with version control, making it easy to access historical records.
Project Updates and Reporting
We monitor project progress to ensure alignment with the business plan and generate compliance reports. These reports support Regional Centers in certifying compliance and addressing any concerns and risks.
Project Progress Monitoring
We regularly monitor project updates to assess alignment with the business plan, evaluate timeline and financial changes, and update management background checks. This includes checking for pending litigation or disqualifying events.
Reporting and Certification
We compile a Compliance Report that summarizes our due diligence findings. This report includes information on the business case, financial projections, critical assumptions, key offering terms, alignment with the Reform and Integrity Act of 2022, and adherence to policy and procedures. Regional Centers use these reports to certify compliance.
Secure Record Retention
We retain all due diligence information and supporting documentation for a minimum of 10 years. This ensures easy accessibility for potential audits by USCIS, SEC, or FINRA.
“Having proper policies and procedures in place is one thing, but having expertise and discipline to implement those policies in every transaction involving numerous parties is quite another.
Retaining an EB-5 savvy and SEC registered broker-dealer to confirm proper policies and to oversee actual compliance would be a wise move for most regional centers and new commercial enterprises.”
