Why I think FINRA is behind it

[djs]

Swerved a bit off original topic.

What thread over 3 posts doesn't?

 

[JMO Fan]

SEC closed the comment period, despite pleas from NAIC, NAFA, and state governors as well as congressmen. Final rule seems likely this year. See your local FINRA exam office soon.

 

[JMO Fan]

NASAA is behind it

NASAA Supports SEC Equity-Indexed Annuities Proposal
[FONT=tahoma,helvetica][FONT=Arial, Helvetica]WASHINGTON, D.C. September 11, 2008—The North American Securities Administrators Association (NASAA) today endorsed a proposed rule by the U.S. Securities and Exchange Commission that would subject equity-indexed annuities (EIAs) to regulation under the federal securities laws and would help protect millions of investors across the country, many of them senior citizens, from the fraud and abuse that is taking place in the sale of EIAs.[/FONT]
[FONT=Arial, Helvetica]“NASAA strongly supports the SEC’s proposed rule. ... Although these products are securities, they remain largely unregulated under federal securities law,” said NASAA President and North Dakota Securities Commissioner Karen Tyler.[/FONT]
[FONT=Arial, Helvetica]...[/FONT]
[FONT=Arial, Helvetica]In a comment letter filed with the SEC, Tyler wrote: “The proposed rule will enable the SEC to address these abuses with the regulatory tools available under the federal securities laws, ranging from mandatory registration and disclosure requirements to strong suitability standards and antifraud remedies.”[/FONT]
[FONT=Arial, Helvetica]...[/FONT]
[FONT=Arial, Helvetica]NASAA said regulating EIAs as securities is “clearly appropriate” from the standpoint of legal and economic analysis. “Contrary to insurance industry claims, EIAs impose significant risks upon investors, including fluctuations in the applicable equity index and potential loss of principal. In addition, issuers and agents routinely market EIAs as investments, not insurance products,” Tyler wrote.[/FONT]
[FONT=Arial, Helvetica]NASAA also pointed out that none of the arguments being advanced against the rule are valid. “State insurance laws alone cannot protect the public from the abuses associated with EIAs. The safeguards they provide are no substitute for the investor protections contained in the federal securities laws,” Tyler wrote.[/FONT]
[FONT=Arial, Helvetica]Further, Tyler wrote, attempts to disparage the rule as part of a regulatory “turf” battle are also wrong. “Critics who level that charge ignore the fact that the rule will not interfere with the continued regulation of EIAs by state insurance commissioners,” Tyler wrote. “The rule expressly provides that it will only apply to EIAs that are ‘subject to regulation under the insurance laws.’ Nor will the rule impose unreasonable burdens on industry. It will simply require compliance with the same regulatory standards that have applied to issuers for the past 75 years. In short, the rule will provide much needed protections for investors without unfairly burdening industry.” [/FONT][/FONT]

 

[Crabcake Johnny]

This sums it up:

In addition, issuers and agents routinely market EIAs as investments, not insurance products,”

 

[padthaiforlunch]

[FONT=tahoma,helvetica][FONT=Arial, Helvetica]EIAs impose significant risks upon investors, including fluctuations in the applicable equity index and potential loss of principal.[/FONT][/FONT]

[FONT=tahoma,helvetica][FONT=Arial, Helvetica]

Pure BS.


[/FONT][/FONT]

In addition, issuers and agents routinely market EIAs as investments, not insurance products,”

O rly? And which carriers are pushing these as investments? And routinely? Come on. Anecdotal evidence at best.

 

[JMO Fan]

Crossing the Line into Securities

[FONT=tahoma,helvetica]

[FONT=tahoma,helvetica]Pure BS.[/FONT]
[FONT=tahoma,helvetica][/FONT]

[/FONT]O rly? And which carriers are pushing these as investments? And routinely? Come on. Anecdotal evidence at best.

FIAs are not sold for their life income guarantees, which is the only insurance aspect.

All the other selling points, including principal guarantees, are investment reasons.

Selling on cash value growth and guarantees violates the Safe Harbor (Rule 151).

 

[Mr. Bill]

Well, Chris Cox has been a pretty mean and lousy SEC chair, so it looks like he has a murky future. McCain doesn't want him, and Obama will be looking to put some heads on the proverbial platters:

My Way News - Obama mocks McCain's call to fire SEC chairman

 

[JMO Fan]

Well, Chris Cox has been a pretty mean and lousy SEC chair, so it looks like he has a murky future. McCain doesn't want him, and Obama will be looking to put some heads on the proverbial platters:

My Way News - Obama mocks McCain's call to fire SEC chairman

This strengthens my opinion that the SEC is trying to finalize Proposed Rule 151A in 2008. That's why they did not extend the comment period, despite pleas from the NAIC, NAFA, and even state governors and U.S. Congressmen. They're proceeding on course.

They probably don't want to wait for a new US Prez to change directions.

It makes them look better, having taken a firm stand.

 

[xrac]

Brokers are cleared in selling-away case
SEC chides Finra for 'novel' interpretation of its rule

Brokers are cleared in selling-away case - InvestmentNews

Just an example of FINRA's abusive power.

 

[padthaiforlunch]

Brokers are cleared in selling-away case
SEC chides Finra for 'novel' interpretation of its rule

Brokers are cleared in selling-away case - InvestmentNews

Just an example of FINRA's abusive power.

Makes my blood boil....