SEC Sets Comment Deadline for Proposal to Tailor Registration for Index-linked Annuities

The SEC set a comment deadline of November 28, 2023 for a proposal that would create a "tailored form" for registering the offerings of registered index-linked annuities ("RILAs"). The proposal was published in the Federal Register.

As previously covered, the SEC stated that the proposal would amend the registration and disclosure framework for RILAs by adapting the existing framework familiar to investors and issuers for variable annuity separate accounts. Specifically, the proposal would amend Form N-4 to address risks associated with RILAs, such as disclosing features of RILAs under Form N-4's "Key Information Table," "so that investors may determine whether a RILA is an appropriate investment for them." Additionally, the proposed amendments would switch the order of the Key Information Table and Overview of the Contract items in order to avoid investor confusion and introduce terminology specific to RILAs earlier in the offerings of variable annuities.

Generally, the proposed amendments would require issuers to comply with Securities Act Rule 156 ("Investment company sales literature") for sales literature, which prohibits materially misleading statements.