Regulatory Notice 11-44

FINRA Requests Comment on Proposed Amendments to NASD Rule 2340 to Address Values of Unlisted Direct Participation Programs and Real Estate Investment Trusts in Customer Account Statements

 

Comment Period Expired: November 12, 2011

Executive Summary

FINRA is proposing amendments to NASD Rule 2340 (Customer Account Statements) to address how firms report the per share estimated values of unlisted Direct Participation Programs (DPPs) and unlisted Real Estate Investment Trusts (REITs) on customer account statements. The amendments would limit the time period that the offering price may be used as the basis for a per share estimated value to the period provided under Rule 415(a)(5) of the Securities Act of 1933 (Initial Offering Period). The amendments also would require firms to deduct organization and offering expenses from per share estimated values during the Initial Offering Period. The amendments would prohibit a firm from using a per share estimated value, from any source, if it “knows or has reason to know the value is unreliable,” based upon publicly available information or nonpublic information that has come to the firm’s attention. Finally, the amendments would allow a firm to omit a per share estimated value on a customer account statement if the most recent annual report of the DPP or REIT does not contain a value that complies with the disclosure requirements of Rule 2340.

 

Questions regarding this Notice may be directed to:

  • Joseph E. Price, Senior Vice President, Corporate Financing/Advertising Regulation, at (240) 386-4623;
  • Gary L. Goldsholle, Vice President and Associate General Counsel, Office of the General Counsel, at (202) 728-8104; or
  • Paul Mathews, Director, Corporate Financing Department, at (240) 386-4639.
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The views, expressions, findings and opinions expressed in the comments on this Web page are solely those of the author(s) and FINRA accepts no responsibility for the content of the comments.


Comments By Date Received
Ascent Real Estate Securities, LLC (PDF 16 KB) 9/30/2011
DFPG Investments, Inc. (PDF 79 KB) 10/4/2011
Kalos Financial (PDF 56 KB) 11/1/2011
LPL Financial (PDF 307 KB) 11/11/2011
Center for Capital Markets Competitiveness (PDF 66 KB) 11/11/2011
American Realty Capital (PDF 160 KB) 11/11/2011
Cornell University (PDF 132 KB) 11/11/2011
PIABA (PDF 1,343 KB) 11/11/2011
Charlie Howell & Laura Stankosky (PDF 42 KB) 11/11/2011
W.P. Carey & Co. LLC (PDF 54 KB) 11/11/2011
NAREIT & PNLR (PDF 72 KB) 11/11/2011
Franklin Square Capital Partners (PDF 582 KB) 11/11/2011
Partnership Consultants, Inc. (PDF 53 KB) 11/11/2011
IPA (PDF 108 KB) 11/11/2011
RADD (PDF 50 KB) 11/11/2011
Prodigious LLC (PDF 50 KB) 11/11/2011
NorthStar Realty Finance Corp. (PDF 28 KB) 11/11/2011
Financial Services Institute (PDF 954 KB) 11/11/2011
REISA (PDF 637 KB) 11/12/2011
Partnership Consultants, Inc. (PDF 30 KB) 11/14/2011
VSR Financial Services, Inc. (PDF 64 KB) 11/14/2011
SIFMA (PDF 277 KB) 11/15/2011
ABA (PDF 115 KB) 11/16/2011
Dividend Capital Securities LLC (PDF 225 KB) 11/17/2011
NASAA (PDF 24 KB) 11/18/2011