SEC takes action! Shocking changes in index-linked annuity registration
SEC releases explosive news! Shocking changes in index-linked annuity registration
July 1, 2024, Yerevan (CoinChapter.com) reported that the U.S. Securities and Exchange Commission (SEC) announced a major revision of Form N-4 to improve the disclosure of registered index-linked annuities (RILA) and market value adjusted annuities (MVA), aiming to provide investors with more relevant information.
The SEC tailors disclosure requirements for RILA and MVA investors. Previously, the S-1 form used by such products was not suitable for their unique features. The form required a lot of detailed information about the issuing company, such as executive compensation and financial statements, which may not be directly relevant to annuity buyers. The revision of Form N-4 enables more targeted disclosures, covering details such as features, risks, and fees that are important to investors.
The 2022 Registered Index-Linked Annuity Act (RILA Act) drove this update. Although the SEC exceeded the 18-month statutory deadline, these changes have now been implemented. Key changes include the introduction of an optional summary prospectus to facilitate investor access to information, while adjusting the filing fee calculation method and allowing the use of "free-written" prospectuses under certain conditions to enhance the efficiency of issuers' communication with potential investors.
Commissioner Mark T. Uyeda emphasized the importance of the changes, pointing out that it is necessary to provide substantive and informative disclosures, remove irrelevant details that distract investors, and ensure that investors obtain key information. The SEC also made technical revisions to Form 24F-2 to allow investment companies (including non-variable annuities) to pay registration fees for an unlimited number of securities and remove outdated instructions to keep the form current.
Commissioner Uyeda suggested a similar customized approach for crypto assets. Current Form S-1 requirements may not be consistent with the unique characteristics of crypto assets, affecting capital formation and investor protection. He believes that allowing crypto assets to differ from Form S-1, just like the differences between funds and insurance products, can achieve more relevant and substantive disclosures, benefiting both issuers and investors.
The article "The U.S. Securities and Exchange Commission Announces Major Changes to Index-Linked Annuity Registration" first appeared on CoinChapter.