May 20, 2026
Yesterday, the Securities and Exchange Commission proposed amendments that would preempt state registration and qualification requirements for SEC-registered offerings. If adopted, the proposal would represent a significant development for non-listed REITs, non-listed BDCs, and other publicly registered non-listed investment programs by reducing duplicative state-by-state review layered on top of the federal registration process.
The SEC’s proposal would define “qualified purchaser” under Section 18(b)(3) of the Securities Act of 1933 to include any person offered or sold securities in a registered offering. That change would cause registered offerings to be treated as “covered securities,” exempt from state-level registration and qualification requirements.
In October 2022, Robert A. Stanger published an editorial by its Special Adviser, Mark Goldberg, and longtime friend of Stanger, John Palmer, arguing that federal preemption was the logical next step for publicly registered non-listed investment products.
Goldberg and Palmer noted that the National Securities Markets Improvement Act of 1996 preempted state registration requirements for mutual funds, closed-end funds, and exchange-traded securities, but did not extend the same treatment to non-listed REITs and BDCs, which were still emerging at the time.
Their conclusion was straightforward: non-listed REITs and BDCs are already subject to SEC registration, disclosure, reporting, and liability standards, and the additional state-by-state review process increases costs and limits investor access without materially improving investor protection.
The SEC’s proposal would address the same regulatory gap identified by Goldberg and Palmer in 2022.
The full October 2022 Stanger editorial is available on Stanger's new website.
“It seems that the SEC is making a long-overdue change to the regulatory review process for non-listed REITs and BDCs,” said Kevin T. Gannon, Chairman & CEO of Stanger. “These investment vehicles have been subject to multi-state reviews and standards that overlap and conflict with each other and now appear poised for a more streamlined and efficient process for registration.”
Additional data on non-listed alternative investment products is available across the full suite of Stanger Publications. For more information, please visit our website or contact:
Gregory R. DiSalvo
732.389.3600
gdisalvo@rastanger.com
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About Robert A. Stanger & Co., Inc.
Robert A. Stanger & Co., Inc., founded in 1978, is a nationally recognized investment banking firm specializing in providing investment banking, financial advisory, fairness opinion and asset and securities valuation services to partnerships, real estate investment trusts and real estate advisory and management companies in support of strategic planning, capital formation and financings, mergers, acquisitions, reorganizations, and consolidations.
Stanger is also well known for its industry leading publications: The Stanger Report, a nationally recognized comprehensive report focused on non-traded REIT and BDC investing, including aggregate market statistics, total returns by company and total return indices, fee structure comparisons, and profiles of current offerings; The Stanger Market Pulse, a monthly deep-dive into alternative investment fundraising; The Stanger Chairman’s Report, focused on NAV REIT and non-traded BDC sales and redemptions; The Stanger Closed-End Fund Report, focused on non-traded interval fund and tender offer fund investing; Stanger Privates, a quarterly publication focused on Private Placement REITs and BDCs exclusively available to Stanger Institutional Access subscribers; and The Alt Street Journal, a weekly newsletter providing an update on industry activities.
For More Information:
Kevin T. Gannon | Chairman & CEO | (732) 389-3600
Robert A. Stanger & Co., Inc.
1129 Broad Street, Suite 201
Shrewsbury, NJ 07702
www.rastanger.com
Member: SIPC
