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Dear Ms. Countryman:
I am writing on behalf of Tobin & Company Securities LLC, an independently owned FINRA-member broker-dealer. TOBIN serves as Managing Broker Dealer for private alternative investment offerings, principally offerings conducted under Rules 506(b) and 506(c) of Regulation D.
TOBIN supports the Commission’s proposed amendment to Rule 146 defining “qualified purchaser” to include any person to whom securities are offered or sold in an offering registered under the Securities Act.
Our experience in the exempt offering market provides a useful comparison. Rule 506 offerings already benefit from federal preemption of state registration and qualification requirements, although states retain notice-filing, fee and enforcement authority. That national framework provides issuers and intermediaries with greater certainty concerning when and where an offering may proceed.
It is incongruous that an exempt Rule 506 offering may be conducted nationally without state merit review while an unlisted offering registered with the Commission, supported by audited financial statements, federal disclosure obligations, federal liability standards and continuing reporting requirements, must navigate substantive review by numerous states.
State-by-state merit review adds cost, delay and uncertainty. It can impose inconsistent offering terms, product-level suitability standards and concentration limits based principally upon an investor’s state of residence. These restrictions are distinct from the individualized obligations imposed upon broker- dealers under Regulation Best Interest and upon investment advisers under their fiduciary standards. They can prevent investors and their financial professionals from constructing portfolios they consider appropriate, while adding unnecessary subscription and documentation requirements.
Member FINRA/SIPC
Investor protection should rest upon clear disclosure, rigorous product due diligence, applicable broker- dealer obligations and effective enforcement of fraud and sales-practice violations. Encouraging issuers to choose registered public offerings does not require reducing disclosure or reporting. It requires removing duplicative state review while preserving the transparency, accountability and federal liability protections that distinguish registered offerings from private placements.
The market data reinforce the significance of this regulatory disparity. According to Robert A. Stanger & Co. data compiled by the Institute for Portfolio Alternatives, SEC-registered non-traded REIT fundraising declined from approximately $33.2 billion in 2022 to $5.7 billion in 2025, while private- placement REIT fundraising increased from approximately $1.4 billion to $9.6 billion. Private placements consequently grew from approximately 4% to 63% of non-traded REIT capital raised. This pronounced shift is consistent with the Commission’s concern that the availability of federal preemption influences an issuer’s choice between registered and exempt offerings.
Section 18(b)(3) expressly authorizes the Commission to define “qualified purchaser,” and the D.C. Circuit upheld the Commission’s broad exercise of that authority in Lindeen v. SEC, 825 F.3d 646 (D.C. Cir. 2016). TOBIN therefore supports the proposed definition in Question 108 and opposes limiting preemption by security type,
issuer type or offering structure, as contemplated by Question 111.
States would retain meaningful anti-fraud and broker-dealer enforcement authority, as well as permissible notice-filing and fee requirements. The proposal preserves these protections while eliminating duplicative registration, qualification and merit review.
For these reasons, Tobin & Company Securities respectfully urges the Commission to finalize the proposed definition promptly, as written and without product or offering carve-outs.
Thank you for considering our comments.
Respectfully submitted,
Justine Tobin
Executive Representative and Founder