Prompted by 80 disciplinary actions over unsuitable annuity sales in the past two years, the NASD last week issued a broad set of rules on how registered reps should sell deferred variable annuities. The rep will have to determine that the investor fully understands the annuity and its underlying sub-accounts. The rep will also have to document the investor's risk and liquidity requirements and provide them with a risk disclosure document. Registered firms will now also have to establish and maintain written supervisory procedures and properly train their sales reps.

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