Securities Offerings Involving Interests in Real Estate Left Out of New York’s Reg D Modernization

In December 2020, New York adopted new rules to update its blue sky securities registration requirements as part of an ongoing effort to “streamline and enhance the oversight of the securities industry in New York,” modernize regulation, and harmonize New York regulations with federal and national standards.[i] Under the new rules, effective February 1, 2021, issuers selling “covered securities” under Regulation D (“Reg D”) in New York must provide notice to the State by filing a Form D through the North American Association of Securities Administrators Electronic Filing Depository (“EFD”). Importantly, this change does not apply to issuers selling “real estate securities,” which must still provide notice by filing Form 99 with the New York Real Estate Finance Bureau (“REFB”).

By way of background, previously private placement notice filings for both covered securities and real estate securities were made on New York’s Form 99. Form 99 is a burdensome filing that requires issuers to file (1) a notarized consent to service of process and (2) certain documents related to the offering or a Form D. Under the new rules, which are consistent with the 1996 National Securities Market Improvement Act (“NSMIA”) and procedures in most other state and territorial jurisdictions, issuers of Reg D offerings involving covered securities must file a Form D through EFD within 15 days of the first sale of the security in New York.[ii]

Securities offerings that involve interests in real estate or an investment in a real estate venture must still file Form 99 with the REFB.[iii] While New York law is unclear on what is considered a real estate securities offering, recent conversations with the REFB indicate that generally the offering of any direct or indirect interest in a real estate venture is considered a real estate securities offering that requires the issuer to file a Form 99. For example, if an issuer is participating in a joint venture that plans to purchase, develop, and manage real estate, any offering of ownership interests in such issuer is a real estate securities offering and the issuer must file a Form 99 with the REFB, rather than a Form D through EFD.

[i] New York State Office of the Attorney General, Press Release, Attorney General James Announces Final Rules to Modernize and Streamline Securities Filing in NYS (December 1, 2020), available at; Notice of Adoption, Brokers, Dealers and Salespersons Defined Under General Business Law Section 359-e, New York State Register (December 2, 2020), available at

[ii] 13 NYCRR 10.1(a)(3).

[iii] Under New York law the offering or sale of securities constituted of participation interests or investments in real estate or securities that consist primarily of participation interests or investments in one or more real estate ventures must file a Form 99 with the Real Estate Finance Bureau prior to the offering of such real estate securities.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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