A week after issuing joint guidance on opportunity zone funds with the Securities and Exchange Commission, the North American Securities Administrators Association on Monday released an investor alert on the funds.
“As with any new investment opportunity, investors should do their homework to be sure they fully understand the potential risks and benefits related to opportunity zone investments,” said NASAA President and Vermont Commissioner of Financial Regulation Michael Pieciak.
The funds invest in economically distressed communities where new investments, under certain conditions, may be eligible for preferential tax treatment as part of the 2017 tax overhaul.
Pieciak notes that investors attracted to opportunity zone investments or the potential tax benefits and promise of return on investment should weigh various factors before deciding to invest.
For instance, the complex regulatory landscape such as evolving tax laws and regulations “could alter the effects on the investment,” the alert warns.