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November 12, 2005 at 07:00 PM
A top official at the National Association of Securities Dealers says too many equity-indexed annuity sellers are portraying them as no-risk products.[@@]
Robert Glauber, chairman of the NASD, Washington, complained about the EIA sales process last week in Boca Raton, Fla., at a conference organized by the Securities Industry Association, New York.
Glauber spoke about problems with disclosure about mutual fund “breakpoints,” or discounts available for clients with big accounts, according to a printed version of his remarks posted on the NASD Web site.
Glauber also talked about topics such as the value of the Internet as a mutual fund disclosure and educational tool and the difficulty of combining NASD regulatory functions and market operation functions in the wake of a move that turned Nasdaq into a for-profit company.
Toward the end of the speech, Glauber spoke about the difficulties involved with regulating Section 529 college savings plans.
The government has put regulation of 529 plans under the jurisdiction of the Municipal Securities Regulation Board, but MSRB relies on the NASD to enforce 529 plan regulations.
“Mutual funds and 529s are about as dissimilar as oranges and tangerines, but Congress designated 529s as municipal securities, so the rules governing their sales are different,” Glauber said. “They shouldn’t be… Investors have a right to expect that products that look the same are covered by the same regulatory regime.”
