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December 09, 2014 at 09:17 AM
RCS Capital Corp. (RCAP) said late Monday that about 25% of its selling agreements have been reinstated by broker-dealers and RIAs. Meanwhile, Schwab and Fidelity have resumed some product sales tied to RCAP.
RCS Capital, a sister company of American Reality Capital Properties (ARCP), which reported $23 million in accounting errors in late October and then drew regulatory scrutiny to itself and other firms founded and led by Nicholas Schorsch, also says it’s raised more than $260 million in new product sales via its distribution operations, including Hatteras Funds and Strategic Capital.
The company explains that 70-plus selling agreements “have been reinstated to date, representing approximately 25% of the total agreements suspended since October 30, 2014.” RCS Capital currently has 1,041 active selling agreements and works with over 325 broker-dealers and RIAs to distribute alternative investment solutions.
In terms of its relationships with custodial and clearing firms, RCAP says two such firms have lifted suspensions.
A Fidelity spokesperson told ThinkAdvisor that it lifted the restriction on new purchase subscriptions for the RCS-affiliated nontraded REIT and nontraded business development company (BDC) securities, after suspending new sales of these products on Nov. 10.
However, sales of nontraded Cole REITs “will remain suspended to new purchases on the platform,” according to Fidelity.
As for Schwab, it has lifted its sales suspension of Hatteras and American Realty Capital (ARC) Phillips Edison, but is “still reviewing Cole and other ARC strategies.”
