The Financial Industry Regulatory Authority wants to change the recordkeeping requirements for variable insurance sellers who get non-cash compensation.

The Financial Industry Regulatory Authority wants to change the recordkeeping requirements for variable insurance sellers who get non-cash compensation.

The rule, now known as National Association of Securities Dealers Rule 2820, regulates FINRA member efforts to sell and distribute variable life insurance and variable annuity contracts.

Most of the proposed changes are relatively minor and are the result of the fact that NASD is now part of FINRA and operates under FINRA’s name.

FINRA wants to identify the rule as FINRA Rule 2320 in the consolidated FINRA rulebook, according to a notice concerning the proposed rule change that FINRA, Washington, has filed with the U.S. Securities and Exchange Commission and the

But the revisions would make more substantive changes in a subsection of the rule, Rule 2820(g), which deals with compensation of FINRA members that sell variable products.

A non-cash compensation provision now requires a FINRA member to “keep records of all compensation received by the member or its associated persons from ‘offerors’ (generally insurance companies and their affiliates), other than small gifts and entertainment permitted by the rule,” FINRA officials write in a description of the rule change. “Currently, this provision requires the records to include the nature of, and ‘if known,’ the value of any non-cash compensation received.”

FINRA now wants to delete the phrase “if known” and require members to “determine and keep records of the value of non-cash compensation received from offerors in all cases,” officials write.

The change would make the provision more similar to the recordkeeping requirements for members involved with securities public offerings, officials write.

“Members would be permitted to estimate the actual value of non-cash compensation for which a receipt (or similar documentation) assigning a value is not available,” officials write.

The SEC posted the Rule 2820 revision notice today in the Federal Register. Public comments on the notice are due May 12.

If the SEC approves the rule change, FINRA would announce an implementation date with 90 days of the SEC approval date, FINRA says.

A copy of the notice about the proposed change is available here.