The U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness (“Chamber”) submits these comments in response to the North American Securities Administrators Association’s (“NASAA”) proposed revisions to NASAA policies regarding real estate investment trusts (“REITs”) (“Proposal”). The Proposal would fundamentally change how state securities administrators approach the regulation of REITs and could influence future regulation of other products.
The Chamber has serious concerns with the Proposal, which would severely restrict the ability of retail investors to diversify their savings and invest in highly regulated and transparent vehicles. Further, the Proposal represents a fundamental conflict with the Securities and Exchange Commission’s (“SEC”) Regulation Best Interest (“Reg BI”), federal conduct standards that include substantial investor protections. The Proposal appears to be yet another effort by state regulators to create their own complex regulatory patchwork at the expense of investors and small firms who will bear the costs of the new rules under consideration by NASAA and its members.