Fund Administration and the Audit Waiver: How the Proposed EB-5 Rule Turns Transparency Into a Requirement

The Department of Homeland Security’s proposed EB-5 rule, published July 2, 2026 under Docket USCIS-2026-0100, is often read as a rulebook of thresholds and deadlines. One of its quietest sections is more structural: it takes the way a well-run regional center already handles investor money and makes that the industry-wide baseline.

The mechanism is a pairing. Regional center capital must sit in a separate account watched by an independent fund administrator, but the rule builds in an exit from the administrator requirement whose price is more transparency, not less. This piece covers the separate account, the fund administrator, and the audit waiver DHS says it must grant.

The Separate Account, Codified

Under INA 203(b)(5)(Q), each new commercial enterprise and affiliated job-creating entity must “keep funds received from immigrant investors in a separate account that may only be used to receive and deploy capital for use in the capital investment project or to return capital to an immigrant investor that provided it.”

DHS proposes to codify a precise definition. A separate account is “an insured account maintained by a new commercial enterprise or affiliated job-creating entity, as applicable, in the United States at a federally regulated bank or other financial institution as defined in 18 U.S.C. 20.” A single pooled account for all of a project’s regional center investors is permitted rather than one per investor. Either way, the capital is ring-fenced and can only move in the narrow ways the statute allows. Our EB-5 explainer covers how the new commercial enterprise and job-creating entity fit together.

The Fund Administrator Requirement

Codifying the separate account is only half of it. Under the proposed rule, “The new commercial enterprise or affiliated job-creating entity must also use a fund administrator that meets certain requirements to oversee and track any transfer of EB-5 investor capital to and from the separate account.”

This is not a clerical role. Under proposed 8 CFR 204.425(a), the enterprise “must establish a separate account and retain a fund administrator that is licensed, active, and in good standing as a certified public accountant, attorney, broker-dealer, or investment adviser registered with the Securities and Exchange Commission.” The administrator must be independent of the enterprise and its owners and officers, must cosign transfers, must verify that each transfer complies with the governing documents before money moves, and must “Periodically, but not less than quarterly, provide each regional center investor with information about the activity of the account in which the investor’s investment is held.” Every funds movement requires a second, independent signature and a visible paper trail.

The Audit Waiver DHS Must Grant

Here the rule offers a deliberate off-ramp, and it is not discretionary. DHS states that it “must waive the requirement for any new commercial enterprise or affiliated job-creating entity that commissions an annual independent financial audit of such new commercial enterprise or job-creating entity and provides the audit to USCIS, as well as all investors in the new commercial enterprise.”

The conditions matter, because the waiver is not a loophole. An enterprise that takes it “does not have to retain a fund administrator otherwise required by paragraph (a) of this section for the period covered by the audit and the succeeding year.” To earn that, under proposed 8 CFR 204.425(b), the audit must be conducted to Generally Accepted Auditing Standards and cover both the new commercial enterprise and any job-creating entity that received investor funds, a scope the rule adds on top of the statute’s either-or wording, and the enterprise must share the result: “The new commercial enterprise or affiliated job-creating entity(ies), as applicable, must provide a copy of the audit to all of the new commercial enterprise’s investors and its associated regional center.” The administrator requirement lifts only when a full annual look at the books, shared with USCIS and every investor, takes its place.

The audit waiver is one of two exits the statute builds. The other is discretionary: DHS may waive the fund administrator requirement where the new commercial enterprise or affiliated job-creating entity is controlled by, or under common control of, an investment adviser or broker-dealer registered with the Securities and Exchange Commission, if in DHS’s judgment SEC oversight provides comparable protections for investors. See INA 203(b)(5)(Q)(v)(I); proposed 8 CFR 204.425. Unlike the audit waiver, this one is not mandatory: the rule proposes that a regional center request it when filing the project application, and DHS retains discretion.

How the Waiver Connects to Regional Center Audits and Annual Statements

The audit waiver plugs into two oversight systems the rule reinforces. First, the audited financials are not filed away privately: “The regional center must include a copy of the audit(s) in its annual statement as required under § 204.418,” so the enterprise-level audit becomes part of the regional center’s yearly USCIS filing. Second, the regional center faces its own audit on a separate track, because “The INA requires DHS to audit each regional center at least once every 5 years,” which USCIS proposes to conduct under government auditing standards to judge whether the center still merits its designation. Refusing or impeding a USCIS audit is a mandatory-termination trigger for a regional center under the proposed rule. Waiver, annual statement, and five-year audit form a layered record.

What This Means for Investors

The practical takeaway for an investor is straightforward: ask which path a project has chosen, and confirm the corresponding safeguard. A firm already organized around separate accounts, independent oversight, and audited financials shared with investors is simply operating the way this proposed rule expects the whole industry to operate; a transparency-forward posture becomes the standard rather than a differentiator. For how these controls attach to your individual filing, see our guide to the I-526E petition.

Proposed Rule, Not Final

None of this is settled law yet. The rule is a proposal, and comments are due on or before August 31, 2026, under DHS Docket No. USCIS-2026-0100, with provisions subject to change before a final rule. Audits and recordkeeping are among the areas DHS has specifically invited comment on, so the fund administrator and waiver rules may shift. Investors weighing a filing this year should also mind the September 30, 2026 grandfathering deadline, and should consult their own immigration and securities counsel.

Related analysis in this NPRM series: what happens if your regional center is terminated.

Important Disclosures

This article is provided for general educational purposes only and does not constitute legal, tax, investment, or immigration advice. Consult your own immigration and securities counsel about your individual circumstances.