The U.S. Securities and Exchange Commission is beefing up portfolio manager disclosure requirements for variable annuity issuers.[@@]

The agency has published a final rule that will require investment companies to give customers more information about potential conflicts between their interests and the portfolio managers’ interests. The SEC proposed the rule in March.

The rule will take effect Oct. 1, and investment companies must start changing their registration forms to comply with the regulation in February 2005.

One big change will require VA issuers to provide the same information about portfolio management teams on their Form N-3 registration forms that mutual fund companies must provide on their Form N-1A and Form N-2 registration forms.

“Currently, Form N-3 does not require disclosure about portfolio managers,” Sanjay Lamba and Christopher Kaiser, SEC officials, write in a discussion of the final regulation that appears today in the Federal Register.

Fund companies have had to name top fund advisors.

Now, the SEC also is increasing the management team listing requirements.

Once the new rule takes effect, VA and fund registration statements must give the name, title, length of service and business experience of each member of a portfolio management team.

The SEC has responded to public comments by agreeing to let portfolios that have more than 5 persons with joint and primary responsibility for day-to-day portfolio management limit themselves to listing just the top 5 portfolio managers.

Each portfolio’s Statement of Additional Information, a document that supplements the prospectus, must disclose the names of other portfolios that a manager manages, describe managers’ ownership interest in the portfolio, and describe the managers’ compensation structure.

The back cover of a prospectus must either tell investors how to find an issuer’s additional information statements on its Web sites or explain why it does not offer the statements on its Web site.

On the front cover, issuers must provide a toll-free telephone number that customers can use to request additional information statements and other documents, and they must give the Web address of the SEC.

VA issuers and fund companies must either tell give the SEC’s Web address.

The SEC has posted the final rule at http://a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/2004/pdf/04-19575.pdf