Risk and compliance
Fund administration
Also called separate account, third-party fund administration.
Fund administration is the duty under 8 U.S.C. 1153(b)(5)(Q) for a new commercial enterprise to hold each investor's capital in a separate insured United States account and to retain an independent fund administrator over that account. The account requirement cannot be waived; the administrator can be, either by an annual GAAS financial audit shared with DHS and every investor, or by a discretionary waiver where an SEC registered adviser or broker-dealer controls the enterprise.
What it decides
Clause (i) requires the enterprise to deposit and maintain each investor's capital, amounts held in escrow included, in a separate account. Clause (vi) defines that account as one maintained in the United States at a federally regulated bank or other financial institution, insured, and holding only the pooled funds of investors in a single capital investment project. Money may leave it only for another separate account, a job creating entity, the project itself, or a refund to the investor who paid it in. Where funds go to an affiliated job creating entity, that entity must hold them in a separate account until deployment and must give the administrator written notice within 30 days that a construction consultant or other authorized individual has verified the deployment. Under clause (iv) the administrator must be independent of, and not directly related to, the enterprise, the associated regional center, the job creating entity, and the principals or managers of any of them; must be licensed, active and in good standing as a certified public accountant, an attorney, or a broker-dealer or investment adviser registered with the SEC, or else meet other requirements the Secretary sets; must monitor and track every transfer out of the account; must serve as cosignatory on all separate accounts; must verify each transfer against the governing documents and approve it by written or electronic signature before it moves; must periodically give each investor information on account activity, including the name and location of the bank and the history of the account; and must keep books and records for five years from the last day of the federal fiscal year of the transactions, producible to DHS on request. Both waivers in clause (v) reach the administrator only, never the account. DHS must waive the administrator where the enterprise commissions an annual independent financial audit of the enterprise or the job creating entity under Generally Accepted Auditing Standards and provides it to DHS and to all investors in the enterprise. DHS may also waive it, at its discretion and after consulting the SEC, where the enterprise or affiliated job creating entity is controlled by or under common control of an SEC registered investment adviser or broker-dealer. For a regional center offering, Part 10 of Form I-956F is where the enterprise reports the bank, the separate accounts, the administrator's name and credentials, and any claim to the SEC control waiver, so ask the regional center which administrator it named and on what licence.
Where this is explained properly
Pages here that go into fund administration rather than mentioning it.
Related terms
- Immigrant Investor Program OfficeThe Immigrant Investor Program Office (IPO) is the single USCIS office that administers the EB-5 program and adjudicates its investor petitions and regional center filings. USCIS locates it in Washington, DC, not at a service center.
- Minimum investment amount$800,000 for an investment in a targeted employment area or in an infrastructure project, and $1,050,000 for every other investment, set by 8 U.S.C. 1153(b)(5)(C) (INA 203(b)(5)(C)). The amount that applies is the one in force on the date the petition is filed.
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