Regulatory Notice 12-14

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


Comment Period Expired:  April 11, 2012

Executive Summary

FINRA seeks comment on a revised proposal to amend NASD Rule 2340 (Customer Account Statements) to address the per share estimated values at which unlisted Direct Participation Programs (DPPs) and unlisted Real Estate Investment Trusts (REITs) are reported on customer account statements. The revised proposal reflects changes based on comments to the amendments FINRA proposed in Regulatory Notice 11-44.


Under the revised proposal, general securities members would no longer be required to provide a per share estimated value, unless and until the issuer provides an estimate based upon an appraisal of assets and liabilities in a periodic or current report filed under the Securities Exchange Act of 1934. During the initial offering period, member firms would have the option of using a modified net offering price or designating the securities as “not priced.” Additionally, the revised proposal modifies the account statement disclosures that accompany the per share estimated value. The revised proposal also includes alternative requirements for DPPs or REITs that calculate a daily net asset value (NAV).


The text of the proposed amendments to NASD Rule 2340 (Customer Account Statements) is set forth in Attachment A.


Questions regarding this Notice may be directed to:

  • Thomas M. Selman, Executive Vice President, Regulatory Policy, at (202) 728- 6977;
  • Joseph E. Price, Senior Vice President, Corporate Financing/Advertising Regulation, at (240) 386-4623; or
  • Gary L. Goldsholle, Vice President and Associate General Counsel,  Office of the General Counsel, at (202) 728-8104.
View Full Notice PDF 151 KB

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
PCI (PDF 25 KB) 3/22/2012
American Bar Association (PDF 92 KB) 4/9/2012
ICON Securities Corp. (PDF 158 KB) 4/10/2012
PIABA (PDF 652 KB) 4/11/2012
NorthStart Realty Finance Corp., NorthStart Real Estate Income Trust, Inc., NorthStart Healthcare Income Trust, Inc. and NorthStart Realty Securities, LLC) (PDF 67 KB) 4/11/2012
NAREIT (PDF 88 KB) 4/11/2012
Franklin Square Holdings, L.P. (PDF 284 KB) 4/11/2012
NASAA (PDF 101 KB) 4/11/2012
U.S. Chamber of Commerce (PDF 101 KB) 4/11/2012
REISA (PDF 225 KB) 4/11/2012
W.P. Carey & Co., LLC (PDF 100 KB) 4/11/2012
IPA (PDF 972 KB) 4/11/2012
American Realty Capital (PDF 100 KB) 4/11/2012
Prodigious LLC (PDF 80 KB) 4/19/2012