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.

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Michael Fugler, NIBA Advisory Committee Chairman

Emily Foshee, NIBA Executive Director