State ("Blue Sky") Filings/Fees

OVERVIEW

• Generally, any jurisdiction has rules around the sale of securities into persons of it.

• The US is no exception, and each state has its own own regulatory jurisdiction.

• In the US, Reg D safe harbor securities offerings used by hedge funds - 506(b) or (c), which are generally utilized by Repool clients as well - allow funds to simply "notice file" with the state (i.e. you file a form, pay a fee, and tell them you're selling into the state).

• These filings and filngs are also known as "blue sky" filings and fees

• Each state has its own rules and fees.

• The fees can vary from $0 to $1800, and are typically on the low end of that range. The fees are typically for any number of investors, not per investor, per state, but some states differ. See the table below.

• Most funds pay around $2-3k year 1, and less ongoing, but this varies depending on how many states.

• Repool pays these fees and passes them through to you. Repool does not cover the fees as part of your contract

• Repool does not assist with any similar but non-US sale of securities filings or fees.

What are blue sky laws?

Blue sky laws, also known as notice filing laws, are state-level regulations that require issuers of securities (e.g. a hedge fund which has investors; the fund is literally selling private security interests to such investors) to register and disclose the specifics of the security offering. While core frameworks are similar, each state varies and this can get complex, quickly.

Fortunately, for most private funds, the utilization of a safe harbor for a securities offering under Regulation D (commonly called "Reg D") of the Securities Act of 1933 (e.g. a 506(b) or 506(c) safe harbor offering) allows a fund's offering to be exempt. This exemption allows a fund to simply "notice file" and pay a fee, which is relatively simple.

As a last note, keep in mind that the blue sky/notice filing laws are about the fund entity, not the advisor or manager entity. So, a manager that has two funds must treat each fund as a standalone when considering blue sky.

Hedge fund blue sky filing fees per state

Unless stated otherwise, the filing fee is charged if you take on any investors from that state. Note that some of these fees are good for an offering period of up to 1 year (i.e. for most states), while others can be up to 4 years (e.g. in the case of New York state).

Most private funds incur a fee of around $2-3k in year 1 for an offering into a few states, and then lower each year after year 1, as the ongoing fundraise amount and accordingly, number of states and investors, tends to drop.

A few considerations:

• This table does not contemplate the validity period of the offering or renewal costs, if any.

• When the table references a range, generally such state varies it fee based on some condition like the amount offered (i.e. sold) in the state.

• There may be exemptions to the filing fee depending on the number of investors; this table does not contemplate that and simply lists the fee should a fee apply.

• This table is not frequently updated and the exact amount will be determined at the time of filing; states may change their fees from time to time.

State	Notice Filing Fees
Alabama	$300
Alaska	$600
Arizona	$250
Arkansas	$100 up to $500
California	$300
Colorado	$50
Connecticut	$150
Delaware	$200 up to $1,000
Washington D.C.	$250
Florida	No filing required
Georgia	$250
Hawaii	$100
Idaho	$50
Illinois	$100
Indiana	Filing required but no fee
Iowa	$100
Kansas	$250
Kentucky	$250
Louisiana	$300
Maine	$300
Maryland	$100
Massachusetts	$250 up to $750
Michigan	$100
Minnesota	$100 up to $300
Mississippi	$300
Missouri	$100
Montana	$200 up to $1,000
Nebraska	$200
Nevada	$500
New Hampshire	$500
New Jersey	$500
New Mexico	$350
New York	$300 up to $1,200
North Carolina	$350
North Dakota	$100
Ohio	$100
Oklahoma	$250
Oregon	$250
Pennsylvania	$525
Puerto Rico	$350 up to $1,500
Rhode Island	$300
South Carolina	$300
South Dakota	$250
Tennessee	$500
Texas	up to $500
Utah	$100
Vermont	$600
U.S. Virgin Islands	$1,500
Virginia	$250
Washington	$300
West Virginia	$125
Wisconsin	$200
Wyoming	$200