FINRA Proposes Amendment No. 1 Relating to Proposed Rule Change to Per Share Estimated Valuations for Unlisted DPP and REIT Securities (Fed. Reg.)

FINRA's amendment ("Amendment No. 1") to its proposed rule change regarding per share estimated valuations for unlisted DPP and REIT Securities was published in the Federal Register.

The amendment eliminates, among other things, the voluntary or "no priced" option proposed in the original rule filing, as well as the "no reason to believe that the per share estimated value is unreliable" standard from the general provision in proposed NASD Rule 2340(c) ("Customer Account Statements"). Additionally, FINRA revised the net investment methodology to remove the "over distribution" deduction from the per share estimated value in order to make clear that firms may use the maximum offering percentage when the issuer provides a range of amounts available for investment unless the member has reason to believe that such percentage is unreliable, in which case the member must use the minimum offering percentage.

FINRA also modified proposed FINRA Rule 2310 ("Direct Participation Programs") to clarify issuer disclosure requirements, including the elimination of the requirement to identify the service used to obtain a valuation and require more frequent valuations.

Comments on Amendment No. 1 must be submitted by August 12, 2014.

See: 79 FR 42590; Text of Amendment No. 1.Related news: SIFMA Submits Comments to the SEC on FINRA's Proposed Rule Change Relating to Per Share Estimated Valuations for Unlisted DPP and REIT Securities (June 27, 2014) SEC Requests Further Comment on FINRA-Proposed Rule Change Relating to Per Share Estimated Valuations for Unlisted DPP and REIT Securities (Fed. Reg.) (May 23, 2014) FINRA Proposes Amendment to Rule Regarding per Share Estimated Valuations for Unlisted DPP and REIT Securities (Fed. Reg.) (February 19, 2014) FINRA Proposes Rule Change Relating to per Share Estimated Valuations for Unlisted DPP and REITS (February 3, 2014) More Detailed Guidance on Real Estate Communications (May 3, 2013).