When is an Annuity a Security?

May 1, 2016

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  1. Gulfman
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    Gulfman Guru

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    Hi Friends,

    Was doing a little reading and ran accross these.

    When is an annuity a Security?
    LINK

    Expect changes in Products, Distribution and Compensation.
    LINK

    Thoughts / Comments?


    .
     
    Gulfman, May 1, 2016
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  2. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    An annuity is a security ONLY if that annuity is a variable annuity which contains mutual fund sub-accounts. In short, the investment risk associated with the annuity is transferred to the client.

    The other possible definition is when FINRA wants to regulate annuities that are not securities, so they try to classify them as securities, even when they are not. That's one reason why the NASD rebranded themselves as FINRA, so they don't just regulate securities, but all financially related transactions.
     
    DHK, May 1, 2016
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  3. scagnt83
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    scagnt83 Worldwide Expert of Everything

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    You mean when FINRA wanted to regulate indexed annuities. They tried and failed and have zero authority to regulate them.

    However, a Broker's BD can regulate any and all outside business activity... including index annuity sales. But that is different than a Regulator attempting to classify IAs as a Security.
     
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