Real estate markets are going through a period of upheaval, and a new set of regulations is being proposed to help make sure they stay healthy.
The rules, expected to be unveiled next week, would require the U.S. Securities and Exchange Commission to make sure the companies that hold or own more than $2.6 billion of the nation’s real estate stock get at least 10 percent of its voting power, and that they are able to do so in a way that does not hurt the market.
The agency would have to establish rules to ensure that stockholders get the same voting power in any stock they own that they have access to, regardless of how big they are or how much they invest.
The goal would be to make the market more responsive to the needs of stockholders, which are still facing uncertainty over whether to stay with their companies or join a new class of companies that have greater ownership and more control over stock prices.
But it is unclear if the rules will pass the Senate.
For now, the rules would be required by the SEC to be announced in a manner that would give the public time to weigh in.
The proposed rules are expected to include a ban on insider trading, a new rule for institutional investors and a rule to limit certain transactions.
But the rules won’t have much effect until the SEC’s chief financial officer, Mary Schapiro, announces the rules next week.
“I am confident that this announcement will provide clarity and reassurance to the market that this is a serious proposal to keep the stock market healthy,” said Chris Kostes, chief executive of the National Association of Realtors.
The SEC is one of the regulators that could decide whether to approve the proposed rules.
The Securities and Exchanges Commission was established in 1933, with the aim of protecting investors against the risks of stock trading.
The group includes the SEC, the Commodities Futures Trading Commission, the Securities and Investment Commission, and the Office of the Comptroller of the Currency.
SEC rules are often challenged by other regulators, which argue that they don’t need to be so strict.
The Dodd-Frank financial reform law also made it a crime to engage in insider trading.