In most cases, yes, investments in Qualified Opportunity Funds (QOF) are considered a security that is regulated by the SEC. The line is fairly bright; if a taxpayer forms a QOF in which she will invest her capital gains and she manages the QOF herself (or with others), then it is not a security. If multiple taxpayers form a QOF and all taxpayers are significantly and actively involved with the management of the QOF (thus, it is member managed) then it is not a security. Regarding what is a security, the U.S. Supreme Court's famous decision of SEC v. W.J. Howey Co., 328 U.S. 293, 90 L.Ed. 1244, 66 S.Ct. 1100 (1946), determined that a land sales contracts for citrus groves in Florida, coupled with warranty deeds for the land and a contract to service the land, were “investment contracts” and thus securities. The court defined an investment contract as a contract, transaction or scheme whereby a person invests money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party. The Howey investment contract analysis has been the starting point in determining the status of transactions in the securities area. Courts look to the substance of the transaction to decide whether a security is involved and have made the determination regardless of the label placed on the interest by the parties.