INDIANAPOLIS-While the purpose of the financial reform bill wasto inform and protect consumers, the locally-based Real EstateInvestment Securities Association believes there may be significantdelays and questions about how these changes will affect realestate investors. During a recent webinar, members said thatcertain new rules could take a year or more to implement, andstates just don’t have the manpower to take on oversight.

The association members discussed various changes required forinvestment advisors and broker-dealers due to the approval of theDodd-Frank Wall Street Reform and Consumer Protection Act on July21. While investment advisors deal solely with securities, thereare broker dealers that do as well, including real estatesecurities.

For example, said association member Deborah Froling with ArentFox LLP, most dealing with real estate funds are exempt frominvestment advisor regulatory rules. However, as of July 21, 2011,hedge funds and private fund equity advisors are no longer exemptfrom SEC registration, she said. “If a component of your fund isthe buying, selling and purchasing of securities, you may have toregister as an investment advisor,” she said during the webinar.“Sponsors may fall within the definition of investment advisorgoing forward.” Also, SEC registration will include substantial newreporting and disclosure requirements.