Compliance with the vague requirements of FINRA Rule 2310 has always been a challenge for broker-dealers as they attempt to balance the need to get the issue to market with the requirement of ensure they have met the due diligence burden that FINRA, SEC and other regulatory agencies demand. For broker-dealers participating in Direct Participation Program (DPP) private placement offerings of interests in commercial real estate property businesses can now enjoy the opportunity of satisfying multiple needs, all in one fell swoop. FINRA Rule 2310 can now be said to extend the opportunity for the broker-dealer (in the DPP CRE context) to create a perpetual pipeline of transactional business for investment banking with an .
How does that work?
Well, technology has a way of changing everything. What if you could meet your due diligence burden using a real-time solution? And what if that real-time solution also created the opportunity for you to increase transaction velocity and generate more sales at the same time? And what if all of this happened while at the same time your overall liability exposure to allegations of investment fraud was dramatically reduced? What if you could be first to market? What if you could have more flexibility in negotiating transactions that you used to think were on the bubble and would have to pass to someone else?
That’s a tall order. Sounds as unrealistic as maybe sending a man to the moon or a phone you could take with you in your pocket and watch television on.
INVIZEN has potentially created the next technological revolution that could fundamentally change the manner, frequency and profitability of CRE capital finance transactions for the broker-dealer industry. INVIZEN offers the first end-to-end suite of due diligence solutions that provide FINRA Rule 2310 compliance due diligence underwriting reviews in a real-time setting. Instead of waiting weeks, the transaction can be done in 2 to 3 days. By “done” we mean:
- A comprehensive capacity underwriting review that is based upon the completion of a real-time market and financial feasibility analysis of the project and market using real-time data and our proprietary technology. In turn, the feasibility study is fed by our proprietary valuation program that conducts a full-scope intended-use valuation for up to 28 different asset class intended-use scenarios – all in real-time. This means you can check the compliance box for FINRA Rule 2310(b)(3)(B)(vi) reviews.
- A comprehensive collateral analysis that takes the output of the capacity analysis and feasibility analysis analytics to create the collateral valuation analysis that uses underwriting standards that are tighter than the current capital market preferences so that we can make decisions based upon hard data and not subjective opinions on how to deploy capital. All of this happens in real-time as well and that means you can also check the compliance box for FINRA Rule 2310(b)(3)(B)(ii) in real-time.
- A comprehensive credit liquidity analysis that uses the underwriting standards of our exclusive Asset Care Protection Program as the basis for eliminating both liquidity assurance risk and credit risk in a way that helps ensure a bankruptcy petition will not result from an unforeseen liquidity crisis over the entire term of the asset holding period. That means we can, more or less, say goodbye to term default risk and with that, we can just about entirely eliminate the broker-dealer’s exposure to investment fraud allegations because the way INVIZEN operates, it is virtually impossible for an asset impairment to occur. Check the compliance box (again, in real-time if you like) for the entire FINRA Rule 2310 on that one.
- Finally, INVIZEN does a default risk underwriting analysis review to make sure the numbers all match up and the securities covenants are observed in the pro forma financial presentation based upon the expected-case business operating scenario.
- INVIZEN supports the project and the participants the entire way with our exclusive suite of business planning services specifically designed to proactively manage execution risk because the budgets, goals and owner requirements are automatically updated and transmitted down to the line employee level through every level of management that includes tasking, productivity measurement and automated reporting. What does your due diligence program have?
- You can get to market faster.
- You can create differentiation between your broker-dealer organization and those that do not have INVIZEN.
- You can negotiate for placement agent agreements aggressively, knowing INVIZEN has your back.
- You can decrease your risk exposure, increase your sales and increase your operating margins.
And for a limited time, we are offering you the opportunity to have these services delivered on a cost-free basis. To learn more about this amazing program and offer – all of which is spelled out in black and white – please contact an INVIZEN representative at 832.663.9634.