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Schapiro%3A Beware Of EIA Risks

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A top official at the National Association of Securities Dealers echoed her boss’s concerns about annuity marketing at a conference in New York organized by the Securities Industry Association.[@@]

NASD Vice Chairman Mary Schapiro appeared Friday at a mutual fund reform conference organized by the SIA, New York, to review NASD views about the mutual fund industry.

NASD Chairman Robert Glauber gave a similar speech the same day at an SIA institutional brokerage conference held in New York.

Glauber told mutual fund company executives that he shares their concerns about the possibility that sellers of variable annuities, fixed annuities and equity-indexed annuities may face less stringent regulation than sellers of comparable mutual funds face.

At the fund reform conference, Schapiro focused on EIA sales practices.

“Despite what you may read in the press, our goal is not to extend our jurisdiction to insurance companies,” Schapiro said, according to a written version of her remarks. “Rather, we simply believe that our members need to be aware of the regulatory and supervisory risks that can arise when their registered representatives sell these products, particularly when they are marketed as securities products and offer substantially greater sales compensation than traditional registered securities.”

Ignoring the risks and the sales compensation arrangements would be irresponsible, Schapiro said.

A copy of Schapiro’s speech is on the Web at