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REISA Submits Response to FINRA’s Proposed Amendments to Rule 2340

Jun 26, 2014

REISA’s Legislative & Regulatory Committee has submitted a letter to the SEC in response to FINRA’s proposed amendments to Rule 2340.

On March 12, 2014, in response to FINRA’s proposed amendments to NASD Rule 2340 – Customer Account Statements, REISA submitted a letter setting forth its comments to the Proposed Amendments.

REISA continues to believe in the importance of protecting the investing public while balancing the need for businesses and sponsors of quality real estate investment and other alternative investment products, along with the FINRA members who sell these products, to be able to efficiently raise capital without an overly burdensome regulatory scheme. REISA understands FINRA’s Corporate Financing Department’s push for action to ensure enhanced transparency and accountability. However, these investment programs have a unique place in the market for real estate securities and the investors attracted to these products are looking for real estate or other alternative products as an asset class in an illiquid, long-term investment. FINRA’s Proposed Amendments seek to fundamentally change the way that this product is understood and treated by member firms and their clients. REISA urges the Commission to disapprove the Proposed Amendments and asks FINRA to reconsider its suggested approach to Rule 2340.

REISA’s Legislative & Regulatory Committee is co-chaired by Deborah Froling, Arent Fox and John H. Grady, National Fund Advisors, who co-authored the letter, which was then signed by REISA President Mark Kosanke, Concorde Investment Services.

Read the full comment letter here.