The Investment Program Association (IPA) recently announced that the AI Insight Daily Blue Sky Report will be available to its members. The report covers all 50 states and includes blue sky information for more than 40 public non-traded REITs and BDCs.
With regulators heightened focus on alternative investments including non-traded REITs, the need for readily available, easy to understand information for broker dealers and financial advisors is paramount. In May of 2013, the State of Massachusetts top securities cop, William Galvin, fined five independent broker dealers over $7 million for improper sales of non-traded REITs and violations of Massachusetts blue sky laws.
In addition to broker dealer limits on investor allocations to alternative investments, many states have restrictions as well, which could vary state to state. In some instances, investors may only invest up to 10% of their total net worth in programs from one sponsor, while another state may restrict allocations to 10% maximum for all alternatives.
The AI Insight Daily Blue Sky Report aims to address the needs of broker dealers offering direct investments in any or all 50 states. Included in the report is state specific information for net worth and income suitability requirements, concentration limits in offerings of the issuing sponsor or overall alternative investments, and limitations on dividend reinvestment plans and automatic repurchase plans.
“AI Insight is pleased to be powering the IPA’s Daily Blue Sky Data report. Since 2007, AI Insight has been providing this information to our subscriber base as a part of our core services, and we feel it’s vitally important to help increase the efficiencies throughout the industry regarding current program financial suitability requirements,” said Sherri Cooke, AI Insight’s President and CEO.
“The IPA is thrilled to be offering the Daily Blue Sky Report to IPA member firms to help them navigate the many complexities of state-by-state regulation,” said Kevin M. Hogan, President and CEO of the Investment Program Association. “We’re confident that this will ease broker-dealer compliance for firms of all sizes, and believe it has the possibility of revolutionizing compliance in our highly regulated industry.”
AI Insight’s system includes over 95 broker dealers and 75 alternative investment product sponsors, which include non-traded REITs, BDCs, direct participation programs, and structured products.