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U.S. court of appeals orders reconsideration of 151A

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A U.S. court of appeals Tuesday ordered the Securities and Exchange Commission to reconsider its rule that treats most equity index annuities as securities.

“We hold that the Commission’s consideration of the effect of Rule 151A on efficiency, competition, and capital formation was arbitrary and capricious,” the U.S. Court of Appeals for the D.C. Circuit wrote in its decision. “The SEC purports to have analyzed the effect of the rule on competition, but does not disclose a reasoned basis for its conclusion that Rule 151A would increase competition.”