Via electronic submission to [email protected], [email protected], and
[email protected]

September 12, 2022

NASAA Corporation Finance Section
Andrea Seidt, Section Chair
Mark Heuerman, Project Group Chair

c/o North American Securities Administrators Association, Inc.
750 First Street, N.E., Suite 1140
Washington, D.C. 20002

Re: Proposed Revisions to the NASAA Statement of Policy Regarding Real Estate Investment Trusts (the “Proposal”)

Dear Section Members, Commissioner Seidt and Mr. Heuerman:

The Asset Management Group of the Securities Industry and Financial Markets Association ( “SIFMA AMG”) welcomes the opportunity to comment on the Proposal.1
The Proposal, if adopted by the states, would dramatically expand state regulation of non-listed REITs and would serve as a template for guidance about other products.2 SIFMA AMG and other associations asked NASAA to extend the comment period, and we appreciate NASAA’s willingness to do so for another 30 days. SIFMA AMG stands ready to meet with NASAA to discuss our concerns before a decision is made about the Proposal.

Summary of our Comments

SIFMA AMG strongly opposes the Proposal for several reasons:

• State Adoption of the Proposal May be Subject to Legal Challenge. States would be expressly preempted from adopting the Proposal by ERISA, the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940. Moreover, routine incorporation of the Proposal into state rules would violate the laws of many jurisdictions that require state regulators to follow administrative rulemaking procedures.

1 SIFMA AMG brings the asset management community together to provide views on policy matters and to create industry best practices. SIFMA AMG’s members represent U.S. and multinational asset management firms whose combined global assets under management exceed $45 trillion. The clients of SIFMA AMG member firms include, among others, tens of millions of individual investors, registered investment companies, endowments, public and private pension funds, UCITS and private funds such as hedge funds and private equity funds. For more information, visit http://www.sifma.org/amg.

2 See Proposal at 2:
If adopted, these revisions have the potential to influence updates to other sets of Guidelines that are under development, including those for the Omnibus Guidelines, Asset-Backed Securities, Commodity Pools, Equipment Leasing, Mortgage Programs and Real Estate Programs (other than REITs). These updates will also permit the NASAA Business Organizations and Accounting Project Group to move forward with its proposal for inaugural guidelines applicable to business development companies