Subject: SR-NASD-2004-183
From: Charles A. Thomas, II

August 4, 2005

Jonathan G. Katz
Secretary, Securities and Exchange Commission
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-9309

Jonathan Katz:

I am a registered investment advisor representative who manages clients' investment assets on several platforms, including variable annuity contracts. I am opposed to the proposed new NASD rule that would impose specific suitability and principal review requirements on the sale of deferred variable annuities.

While I agree that registered representatives who engage in misleading sales practices should be vigorously prosecuted and severely sanctioned, I believe the NASD should redouble its efforts to enforce existing regulations that already address this issue. Too often the standards and compliance agencies that self-police industry enact new rules when they, for whatever reason, cannot enforce existing regulations. This is the easy way out for the bureaucrats, and it only confuses the producers and leaves the consumer at continued risk. It also obfuscates the real issue, which is the agency's failure to effectively enforce existing rules.

Excessive regulations are like a tax: they continuously add to the cost until the product or service becomes unaffordable to the consumer; when the product or service stops selling, the regulator will be out of a job!

I strongly urge the NASD to withdraw the proposed rule change and re-focus its efforts on more efficacious enforcement of existing rules. Otherwise, the consuming public and the industry will eventually change its economic behavior such that the services of the standards and compliance agency will no longer be relevant.


Charles A. Thomas, II