IPA Urges SEC to Complete National Framework for Registered Offerings

The Institute for Portfolio Alternatives (IPA) today filed a comment letter urging the Securities and Exchange Commission (SEC) to adopt its Registered Offering Reform proposal and establish a consistent national review process for all SEC-registered public offerings.

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The proposal would allow registered offerings of unlisted securities to proceed nationwide without a second layer of duplicative state registration, qualification, and merit review. Federal disclosure requirements, securities-law liability, state antifraud authority and other investor protections would remain in place.

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“A public offering should be able to reach investors through a single federal registration process,” said Anya Coverman, President and CEO of IPA. “The market needs one front door, not fifty-three.”

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The proposal would close a gap created by timing, not a deliberate policy choice by Congress. When Congress established the current national framework in 1996, the alternative investment industry was still nascent. Registered unlisted real estate investment trusts (REITs) represented only a small part of the market and the first registered unlisted business development company (BDC) was established in 2009. Nearly three decades later, these offerings have grown into a significant source of capital and an important way for individual investors to access alternative assets, build wealth and save for retirement, yet they remain outside the framework that applies to most other nationally distributed offerings.

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Unlisted REITs and BDCs illustrate the harmful effect this gap has on investor access and public financial markets. These offerings register with the SEC, provide investors with full and fair disclosure, and file ongoing public reports. But before they can be offered nationwide, issuers must navigate reviews across 53 separate jurisdictions, differing substantive standards, and annual renewal processes.

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IPA’s comment letter argues that the resulting cost, delay, and uncertainty make the registered route less competitive. Sponsors can instead bring similar investment strategies to market through private placements that are not subject to state merit review but are generally limited to accredited investors.

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“When the registered path becomes too costly, slow, or unpredictable, issuers do not necessarily abandon the strategy,” Coverman said. “They can take it private. That leaves many individual investors without access to the investment, or the disclosure and reporting that come with public registration.”

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To read IPA’s full comment letter, please click here.