From: Edward Prescott
Sent: August 5, 2005
Subject: File No. SR-NASD-2004-183

Edward Prescott
Box 20
Eastwood, KY 40018

August 5, 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 representative (Series 6&63) who sells mutual funds and variable insurance products, including deferred variableannuities. I am writing to you because I believe the principal review requirements and redundant suitability standards contained in NASD proposed Rule 2821 are unnecessary, and will provide no meaningful additional protection to consumers. Since suitability requirements are already in place under NASD rules, a new rule is unnecessary. Enforcement of the current rule will accomplish the NASD's goal without the need to create a new rule. I urge the SEC to disapprove the proposal.

People who purposely engage in misleading sales practices should be prosecuted and subjected to appropriate sanctions. However, it appears to me that there is a current thought that there is wide-spread innappropriate use of deferred variable annuities where an alternative product would be more appropriate. In large part I believe this to be untrue, the problem being that those who purport this theory do not understand the workings and features of variable annuities. Often the VA is perfectly suitable and the most appropriate product, but because of lack of understanding many disparage its use.Still, current suitability rules are sufficient to ensure the appropriate use of the product when applied with the "know your client" requirement.

The requirement for review by a principal found in the proposed rule appears to present a bias against deferred variable annuities. Current review requirements are sufficient to ensure that the appropriatenetness of a registered representative's recommendation is appropriate, whether it be a variable annuity or some other security product. Even without the bias, additional review requirement rules would be onerous and unnecessary. If the broker-dealer is appropriately reviewing each of its registered representatives, then it will identify any representative who is recommending any inappropriate productsIn, not just variable annuities.

It appears that Proposed Rule 2821 is a "body cast" where a bandaid will suffice. For these reasons, I urge the SEC to disapprove NASD proposed Rule 2821.

I appreciate your consideration, and thank you for the opportunity to express my views in this matter.


Edward C. Prescott, CLU