Investment Program Association Issues Statement on Proposed Rule 14-006

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ELLICOTT CITY, Md., July 17, 2014 (GLOBE NEWSWIRE) -- The Investment Program Association (IPA), a trade association for non-listed direct investment vehicles, including nonlisted real estate investment trusts (REITs) and business development companies (BDCs) and other nonlisted direct participation programs (DPP), today released the following statement from Kevin Hogan, its President and Chief Executive Officer, concerning the July 11, 2014, letter from the Financial Industry Regulatory Authority ("FINRA") to the Securities and Exchange Commission ("SEC"). The letter contains FINRA's final proposed rule changes relating to per share estimated valuations for unlisted DPP and REIT securities.

Commenting on the letter, Mr. Hogan said:

The IPA supports this proposed rule in its current form and believe it will work best for investors, broker-dealers and sponsors alike.

Because of their unique features, Direct Placement Programs and non-listed REITs require thoughtful rulemaking. We appreciate that the SEC and FINRA have been deliberate in their rulemaking process. Our industry is proud to have worked with them to develop a workable rule for the industry.

These proposed changes bring significant clarity to the rule governing customer statements. Specifically, they provide five major changes:

  • An improved disclosure regimen for underwriting and sales costs for investors.
  • A security valuation guideline that broker dealers can rely upon.
  • Earlier determination of net asset valuations.
  • Improved standards for determining valuations.
  • Greater frequency of independent valuations.

Some of the above changes are voluntary guidelines that the IPA had previously adopted. Now they will become a uniform standard across the industry.

The IPA is proud of its engagement in the process and our contributions.

The Investment Program Association (IPA) was formed in 1985 to provide effective national leadership for the direct investment industry. The IPA supports individual investor access to a variety of asset classes not correlated to the traded markets and historically available only to institutional investors. These investments include public non-listed REITs (NLREITs) and Business Development Companies (BDCs), Energy and Equipment Leasing Programs, and private equity offerings. For the last 28 years, the IPA has successfully championed the growth of such products, which have increased in popularity with financial professionals and investors alike. Direct investments are held in the accounts of more than 2 million individual investors. The mission of the IPA is advocating direct investments through education. Access the wealth of IPA educational materials here, or visit the IPA online for more information about becoming a member.

To stay up-to-date with IPA news, follow @IPADirectInvest on Twitter.

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Source:Investment Program Association