A commission is a transaction fee earned by a broker or investment adviser for buying or selling a security on behalf of a client. Commissions are a major form of revenue for brokerage firms. A commissioned broker earns a fee for every trade execution. This type of arrangement raises the possibility of churning or excess activity in an account just to generate commissions. Discount brokerages tend to charge the lowest commissions but they may not offer any guidance or research. There are soft-dollar commissions which come commission revenues generated by brokerage activity are directed by the institutional investment managers that generated the activity. Soft dollar commissions are directed by the investment managers towards goods and services that are intended to be of benefit to actual clients. Examples of goods and services include software, research and computer equipment.

Rule 151A

A Federal appeals court recently voided Rule 151A.

Rule 151A would have treated indexed annuities as securities and would therefore have shifted responsibility for regulation of indexed annuities from state departments of insurance to the Securities and Exchange Commission (SEC).

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SEC Seeking Simpler Annuity Prospectus

The Securities and Exchange Commission (SEC) is interested in reducing the complexity associated with annuity information. The SEC would like to try and develop user-friendly prospectuses that allow for greater transparency of product features and fees as well as an enhanced ability to compare like product types.

SEC Postpones Effective Date of Rule 151A

The Securities and Exchange Commission (SEC) has agreed to a two year "stay" on SEC Rule 151A. SEC Rule 151A is a contentious rule that, from a regulation standpoint, would treat fixed indexed annuities as securities rather than insurance products. The securities regulation would be under FINRA oversight. The stay basically postpones the rule's proposed January 12, 2011 effective date for a period of two years. Source: Wall Street Journal Full Story
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Federal Appeals Court May Vacate SEC Rule 151A

A federal appeals court indicated that it may vacate SEC Rule 151A which would require that fixed indexed annuities be regulated as securities by the Securities and Exchange Commission (SEC). The court determined that the SEC may have failed to properly assess the 151A's potential impact on efficiency, competition and capital formation in the industry. This point is similar to those raised by Sheryl Moore in this interview .
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