WASHINGTON BUREAU — A Washington financial services regulation expert has warned against assuming that the U.S. Court of Appeals for the D.C. Circuit is about to throw out Regulation 151A.
A recent order issued by a panel of judges at the court appears to indicate that vacating the rule “is not imminent, but a possibility,” says Frederick Bellamy, a partner at Sutherland Asbill Brennan L.L.P., Washington.
The panel is trying to prod the U.S. Securities and Exchange Commission to disclose specifically how it itends to respond to a decision the panel released in July, Bellamy says.
The court’s message is, “Trust, but verify,” Bellamy says.
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Rule 151A, a regulation approved by the SEC in January, would classify indexed annuities as securities starting Jan. 12, 2011.
Insurers filed a suit — American Equity Investment Life Insurance Company, et al, vs. the Securities and Exchange Commission, No. 09-1021 – in an effort to block the regulation.
A D.C. Court panel ruled in July that the SEC had the authority to oversee EIAs as securities, but it sent the rule back to the SEC for reconsideration.