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December 02, 2006 at 09:29 PM
A broker-dealer should think about execution, supervision and compensation when deciding whether securities laws apply to a life settlement transaction.
Cecilia Jordana, senior regulation specialist with the National Association of Securities Dealers, Washington, gave that advice here this week during a panel discussion on securities regulation of life settlements at a conference organized by the Life Insurance Settlement Association, Orlando, Fla.
If, for example, a registered rep works with a consumer who sells a life insurance policy through a life settlement and then buys a security, that transaction would fall under the jurisdiction of securities regulators, Jordana said.
The rep would have to have a broker-dealer oversee the transaction directly, not simply notify the broker-dealer about an outside transaction, Jordana said.
Even if a registered rep simply helps with a life settlement transaction, the role the rep plays in the purchase, sale or exchange could make the rep subject to securities law, Jordana said.
