The North American Securities Administrators Association (NASAA) has ended its comment period on its proposed policy statement regarding Real Estate Investment Trusts (REITs). NASAA's goal is to ensure that advisors dealing in non-publicly traded REITs abide by the investment industry's standards of conduct. NASAA also wants to ensure that the net income and net worth thresholds used to determine who can invest in REITS are adjusted for inflation.
NASAA's proposed policy would impose requirements that may limit investment opportunities for investors in the REIT space while also heightening potential liability and risk for brokerage firms and investment advisors who sell REITs. Additionally, the proposal may serve as a template for future regulations that could affect asset-backed securities, commodity pool trading products, non-REIT mortgage programs, and non-traded business development companies (BDCs).
Several groups representing brokerages and other industry sectors continue to resist the proposed rules for non-publicly traded REITs. Comments to NASAA generally voice concerns that the proposed changes will lead to conduct standards that will deprive investors of ways to diversify their portfolios and will seek remedies for a problem that the industry has proved able to solve on its own, according to FinancialPlanning.com.
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