Subject: File No. S7-14-08
From: Ken DuBose

July 2, 2008

Sirs:

I’m writing about your proposal that would define equity indexed annuities as a “security” or an “investment”.

For a vehicle to be a security or an investment, it must have the ability to grow as a result of the investment or lose as a result of the investment. EIA’s cannot lose money as they are a fixed insurance products much like a CD at a bank. There is no chance of loss as the result of an “investment” going “down”.

An EIA simply pays extra interest if a particular index is doing well or going “up”. However, none of the client’s funds are “invested” in the Index being watched.

So, if there is no chance for loss due to the funds being in a fixed account and the funds are never invested in the Index, how can this be classified as a “Security” or an “Investment”?

Respectfully, it denies common sense.

Best,

Ken DuBose