The question was: Which of the following correctly depicts what the new Proposed Rule 3110(b)(3), in the Financial Industry Regulatory Authority’s Regulatory Notice 08-24, would do:
a) Require B-Ds to supervise their reps when they sell securities
b) Require B-Ds to supervise their reps when selling fixed annuities and any investment advisory activities in which they’re engaged
c) Be limited in its application to registered securities
d) Apply to all securities transactions, both exempt and non-exempt.
e) a), b) and c)
f) a), b) and d)
The answer is: f). Proposed Rule 3110(b)(3) would require broker-dealers to supervise their reps when selling securities and fixed annuities and in any of the reps’ investment advisory activities, and it would apply to all securities transactions, both exempt and non-exempt, according to attorneys Norse N. Blazzard And Judith A. Hasenauer. Writing in the July 28, 2008 National Underwriter, Blazzard and Hasenauer point out that the proposal follows FINRA’s recent implementation of a regulation (Rule 2821) that establishes increased scrutiny of sales of deferred variable annuities. It comes at a time when state insurance regulators are adopting new suitability requirements for the sale of all types of annuities.