What does FINRA Rule 2330 apply to?

What does FINRA Rule 2330 apply to?

Rule 2330 requires a registered principal to review and determine whether to approve a customer’s application for a deferred variable annuity before sending the application to the issuing insurance company.

Which one of the following would be most important in the determination if an annuity was the proper product to offer to a consumer?

Age. The age of the buyer of an annuity is an extremely important factor in any determination of whether that annuity is suitable. In the case of an immediate annuity payable for life, the age of the annuitant will determine the amount of each annuity payment.

Does Rule 2330 apply to employer sponsored plans?

Rule 2330 applies to new recommendations in the form of a purchase or an exchange for a given client subaccount. This rule does not apply to: Transfers and reallocations between subaccounts of the same client. Any tax-qualified or employer-sponsored plan.

What is the role of FINRA?

FINRA is authorized by Congress to protect America’s investors by making sure the broker-dealer industry operates fairly and honestly. We oversee more than 624,000 brokers across the country—and analyze billions of daily market events.

What are suitability requirements with annuities?

These criteria include your:

• Age.
• Annual income.
• Financial situation and need, including the financial resources that you are using to fund the annuity purchase itself.
• Financial experience.
• Financial objectives.
• Intended use of the annuity.
• Financial time horizon.

What factors are important considerations when determining suitability of an annuity sale?

THE TWELVE FACTORS OF “SUITABILITY”

• AGE.
• ANNUAL INCOME.
• FINANCIAL SITUATION AND NEEDS, INCLUDING THE FINANCIAL RESOURCES USED FOR THE FUNDING OF THE ANNUITY.
• FINANCIAL EXPERIENCE.
• FINANCIAL OBJECTIVES.
• INTENDED USE OF THE ANNUITY.
• FINANCIAL TIME HORIZON.

What is FINRA compliance?

FINRA Compliance Made Simple To recap, FINRA is a self-regulatory body that has created a massive catalog of rules and regulations to protect buyers and sellers. At its essence, FINRA compels member firms to have their broker-dealers act honestly and transparently and ensure that financial data is always secure.

What is FINRA data?

FINRA provides real-time and historic data for most TRACE-eligible securities to members and any others that choose to subscribe for a fee.

What do you need to know about FINRA Rule 2330?

Deferred variable annuities provide a periodic and variable payout for a given time period starting in the future. They are usually used in insurance/assurance business. Due to their complexity, they are a large source of consumer complaints to the SEC/FINRA. As a result, FINRA created Rule 2330 to provides regulation guidance.

What are the requirements of rule 2330?

.05 Gathering of Information Regarding Customer Exchanges. Rule 2330 requires that the member or person associated with a member consider whether the customer has had another deferred variable annuity exchange within the preceding 36 months.

How does rule 2330 apply to deferred variable annuity?

Under Rule 2330, a member that is permitted to maintain customer funds under SEA Rules 15c3-1 and 15c3-3 may, prior to the member’s principal approval of the deferred variable annuity, deposit and maintain customer funds for a deferred variable annuity in an account that meets the requirements of SEA Rule 15c3-3.

What are the FINRA rules for variable annuities?

FINRA Rule 2320 (Variable Contracts of an Insurance Company) contains important requirements regarding cash and non-cash compensation arrangements associated with variable annuity sales. Rule 2330 establishes sales practice standards regarding recommended purchases and exchanges of deferred variable annuities.