ADISA (Alternative & Direct Investment Securities Association), the nation's largest trade association for the retail alternative investment space, announced today that its government relations team met with regulators in New Jersey earlier this week to discuss the state's impending fiduciary rule.
ADISA board member and former president, John Grady (Practus), along with Thomas Rosenfield (HillStaffer), attended the meeting.
"This was a productive meeting that we were very pleased to be invited to by New Jersey regulators, and we discussed a variety of technical and procedural issues that relate to the state's proposed fiduciary rule," said Grady. "Among the discussions were the nuances of alternative securities compared to other securities, the importance of 'costs' and the meaning of 'best interest' under New Jersey's proposed rule, as well as the rule's potential implementation and effective dates."
ADISA addressed several topics at the discussion, including:
- Protecting the investor – the ultimate consumer of financial services – remains the Division's primary focus, with an emphasis on addressing the potential for investor confusion about the differences between advisers and broker.
- The Division is considering the priority that should be given to "cost," relative to other factors, when brokers and advisers are considering whether to recommend a security or strategy.
- The proposed regulation's use of the word "best" is intended, in theory, to be about process and not an absolute requirement to be applied in hindsight.
- A broker's duty to his or her client can be "episodic" in nature, with the proviso that the limited time frame makes monitoring and other post-transaction requirements more important.
"ADISA and its coalition members will continue to push for sensible regulations that not only foster the state's desire to protect consumers, but also protect the legitimate interests of alternative investments and the firms and individuals that recommend them to their clients, as well as numerous retail investors who include alternatives as crucial aspects of their retirement and savings portfolios," said Grady.
ADISA submitted a comment letter to the New Jersey Bureau of Securities in June. The letter can be read here.
The Alternative & Direct Investment Securities Association is the nation's largest trade association representing the non‐traded alternative investment space. ADISA's members are typically involved in nontraded real estate investment trusts, business development companies, master limited partnerships and private and public funds (LPs/LLCs), 1031 exchange programs (DSTs/TICs), energy and oil and gas interests, equipment leasing programs, or other alternative and direct investment offerings. The association was founded in 2003 and has approximately 4,000 members who are key decision makers, representing more than 220,000 professionals throughout the nation – including sponsor members who have raised in excess of $200 billion in equity and serve more than 1 million investors.