The SEC has approved FINRA’s plan to overhaul how firms calculate the value of unlisted real estate investment trusts (“REITs”) and direct-participation programs (“DPPs”).

Under the new rules — specifically NASD Rule 2340 and FINRA Rule 2310 — firms will now be required to include on customer account statements a per-share estimated value for any unlisted REIT or DPP securities that they have reason to believe is reliable. (Firm can choose between SEC-approved two methodologies to calculate valuations.) Previously, many firms typically listed non-traded REITs at a per-share price of $10 and did not take into account the costs and fees that can reduce investor capital.

Firms also will need to make new disclosures about the nature of the investment — including that they are not traded on a public securities exchange and that the price an investor receives may be less than the estimated per-share value.

A copy of the SEC Order approving the new FINRA rules can be found here.