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SEC approves FINRA rule governing sales practices of deferred variable annuities

Jeffrey S. Puretz (Partner, Financial Services, Dechert LLP, Washington, DC, USA)
Anthony H. Zacharski (Partner, Financial Services, Dechert LLP, Hartford, Connecticut, USA)
Alan Rosenblat (Counsel, Financial Services, Dechert LLP, Washington, DC, USA. Alison C. Ryan is Associate, Financial Services, Dechert LLP, Newport Beach, California, USA)
Alison C. Ryan (Associate, Financial Services, Dechert LLP, Newport Beach, California, USA)

Journal of Investment Compliance

ISSN: 1528-5812

Article publication date: 13 June 2008

Abstract

Purpose

The purpose of this paper is to summarize and discuss FINRA Rule 2821, which covers broker‐dealer sales practices with respect to purchases and exchanges of deferred variable annuities.

Design/methodology/approach

The paper describes the transactions to which the rule applies; summarizes the four primary components, which relate to suitability obligations, review and approval, supervisory procedures, and training programs; discusses the background and history of the rule; and explains a conditional exemption from Rules 15c3‐3 and 15c3‐1 that permit a principal's review of transactions subject to Rule 2821 for up to seven days without triggering requirements for additional capital or customer reserve accounts.

Findings

The paper finds that deferred variable annuities now join a very small group of securities products that have their own custom suitability requirements.

Originality/value

The paper provides practical guidance by experienced lawyers specializing in financial services.

Keywords

Citation

Puretz, J.S., Zacharski, A.H., Rosenblat, A. and Ryan, A.C. (2008), "SEC approves FINRA rule governing sales practices of deferred variable annuities", Journal of Investment Compliance, Vol. 9 No. 2, pp. 60-64. https://doi.org/10.1108/15285810810886216

Publisher

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Emerald Group Publishing Limited

Copyright © 2008, Company