2023 Laws of Puerto Rico › TITLE SEVEN - Banking (§§ 1 — 3116) › PART VII - Other Financial Institutions (§§ 3001-3012 — 3116) › Chapter 146 - Private Equity Funds Act (§§ 3111 — 3116) › § 3111 - Definitions

(a) RIA or Registered Investment Advisor.— Means:
(1) A business that, under a contract with another business (which could be a Fund), is engaged in the investment advisory business and regularly provides consulting services regarding the convenience of investing in, buying or selling securities or any other property, or is authorized to determine which securities or other assets will be purchased by said business.
(2) Any other person that in accordance with a contract with the person described in clause (1) regularly performs practically all the tasks described in such clause.
(3) The person shall be registered (or be exempt from registration) under The Investment Advisers Act of 1940 of U.S.A., as amended (15 U.S.C. § 80b-1 et seq.), §§ 881 et seq. of Title 10, also known as the “Uniform Securities Act of Puerto Rico” or any other similar act that supersedes said acts.
(4) The person shall be register with the SEC or CFIPR, if applicable.
(b) GDB.— Means the Government Development Bank for Puerto Rico created under the provisions of §§ 551 et seq. of this title.
(c) EDB.— Means the Economic Development Bank for Puerto Rico created under the provisions of §§ 611 et seq. of this title.
(d) Carried interest.— Means the share of any profits that the general partners of a Fund receive as compensation for the gains realized from the Fund’s operations.
(e) Code.— Means §§ 30011 et seq. of Title 13, known as the “Puerto Rico Internal Revenue Code of 2011” or any other similar act that supersedes the same.
(f) PRCUSIC.— Means the Puerto Rico Credit Unions Supervision and Insurance Corporation created under the provisions of §§ 1334 et seq. of this title or any other similar act that supersedes the same.
(g) IBE.— Means an international banking entity in accordance with the provisions of the International Banking Center Regulatory Act.
(h) IFE.— Means an international financing entity in accordance with the provisions of the International Financing Center Regulatory Act.
(i) PE-firm.— Means a private equity firm, which invests in private equity through a variety of investment strategies configured in funds, such as: growth capital, leveraged buyout, mezzanine, distressed and venture capital. Typically this firm acts as a general or limited partner.
(j) PEF.— Means a private equity Fund in accordance with the provisions of § 3112 of this title, created to invest in debt and capital securities.
(k) PR-PEF.— Means a Puerto Rico Private Equity Fund in accordance with the provisions of § 3112 of this title, created to invest in debt and capital securities.
(l) FDIC.— Means the Federal Deposit Insurance Corporation.
(m) Fund.— Means a PEF and/or a PR-PEF as defined in this section.
(n) Accredited investors.— Means:
(1) A bank, insurance company, registered investment company, business development entity, small business investment company, GDB, EDB, IBE or IFE. Irrespective of the provisions of the International Banking Center Regulatory Act and the International Financing Center Regulatory Act, it shall be understood that an IBE or an IFE, respectively may be considered accredited investors for the purposes of this chapter;
(2) a Commonwealth of Puerto Rico employee benefits plan or any other employee benefits plan or trust as defined in the Employee Retirement Income Security Act of 1974 (“ERISA”), only if a bank, insurance company, or RIA make the investment decisions, or if the plan’s total assets are greater than five million dollars ($5,000,000);
(3) a nonprofit organization, corporation, association whose total assets are greater than five million dollars ($5,000,000);
(4) a director, executive officer or general partner of the issuer of a offering securities;
(5) an individual person with a net worth exceeding one million dollars ($1,000,000) at the time of the purchase, not including the value of the individual person’s main residence, either individually or jointly with his or her spouse;
(6) an individual person that earned more than two hundred thousand dollars ($200,000) in each of the last two (2) years prior to the purchase, or that earned a joint income of three hundred thousand dollars ($300,000) with his or her spouse and expects to reasonably maintain the same level of income throughout the year in course;
(7) a trust with total assets of more than five million dollars ($5,000,000) that was not organized or created to purchase publicly traded securities and where a sophisticated person makes the purchase; or
(8) any business in which the owners of the capital are accredited investors;
(o) Puerto Rico Investment Companies Act of 2013.— Means §§ 691 et seq. of Title 10, known as the “Puerto Rico Investment Companies Act of 2013” or any other similar act that supersedes the same.
(p) Investment Companies Act of Puerto Rico.— Means §§ 661 et seq. of Title 10, known as “Investment Companies Act of Puerto Rico”, or any other similar act that supersedes the same.
(q) Municipal Property Tax Act.— Means §§ 5001 et seq. of Title 21, known as the “Municipal Property Tax Act of 1991” or any other similar act that supersedes the same.
(r) Municipal License Tax Act.— Means §§ 651 et seq. of Title 21, known as the “Municipal License Tax Act” or any other similar act that supersedes the same.
(s) Act to Promote Export Services.— Means §§ 10831 et seq. of Title 13, known as the “Act to Promote Export Services”.
(t) Act to Incentivize the Transfer of Investor Individuals to Puerto Rico.— Means §§ 10851 et seq. of Title 13, known as “Act to Incentivize the Transfer of Investor Individuals to Puerto Rico”.
(u) International Banking Center Regulatory Act.— Means §§ 232 et seq. of this title, known as the “International Banking Center Regulatory Act” or any other similar act that supersedes the same.
(v) International Financing Center Regulatory Act.— Means §§ 3081 et seq. of this title, known as “International Financing Center Regulatory Act” or any other similar act that supersedes the same.
(w) CFIPR.— Means the Commissioner of Financial Institutions of Puerto Rico created under the provisions of §§ 2001 et seq. of this title, known as “Financial Institutions Commissioner’s Office Act”.
(x) SBA.— Means the Small Business Administration.
(y) Secretary of Treasury.—Means the Secretary of the Puerto Rico Treasury Department.
(z) SEC.— Means the U.S. Securities and Exchange Commission created under the provisions of the Securities Exchange Act of 1934.
(aa) SIPC.— Means the Securities Investor Protection Corporation.
(bb) General partners.— Means the group that comprises the Fund, in charge of the day-to-day operations of the Fund and usually conducts the investment activity using part of its capital. General partners have a fiduciary obligation to the Fund’s investors.
History —Nov. 12, 2014, No. 185, § 2.