From: James Biasotti
Sent: July 18, 2006
Subject: File No. SR-NASD-2004-183

I am a licensed insurance professional and variable product salesperson. I also utilize mutual funds and private managed accounts for my clients. Being independent allows me to use the best product solutions for each clientís unique situation. I am writing to you concerning the suitability standard and principal review requirements pertaining to the sale of variable annuities contained in NASD proposed Rule 2821. Although the latest NASD proposal includes several amendments made to earlier versions of the proposal, the proposed rule's requirements are redundant, unnecessary, will provide no meaningful additional protection to consumers and will adversely impact my business. I urge the SEC to disapprove the proposal.

I firmly believe people who engage in misleading sales practices should be aggressively prosecuted and subject to appropriate sanctions. Just in the same way we have immigration laws on the books that we donít enforce. The NASD, however, has failed to adequately justify the need for the proposed rule. To the contrary, the available data does not support the NASD's claims that the level of sales problems in the variable annuity marketplace calls for the adoption of the proposed rule. Unsuitable variable annuity sales made up less than .50 percent of the NASD's disciplinary actions over the last five years, and complaints about mutual funds and individual securities far outnumber those concerning variable annuities. Furthermore, the vast majority of the comments received by the NASD and SEC regarding the proposal opposed the new rule, and the NASD has not adequately responded to the concerns raised by the vast majority of commentators. If the NASD wants to look at abuse or improper disclosure they should look at Equity Indexed Annuities- but unfortunately they are not in their jurisdiction.

Furthermore, proposed Rule 2821 duplicates current supervision and suitability requirements that are already in place. NASD rules (including Rule 2310) already contain suitability requirements that apply to all sales of securities, including variable annuities. If regulators really want to protect consumers, appropriate enforcement of the existing suitability rule rather than adopting a new rule is the answer. I already have my clients review and sign a Variable Annuity Disclosure check list to make my clients aware of the terms in the VA. They usually also sign a investment exchange disclosure or Mutual fund expense disclosure.

In addition, the requirement for review by a principal found in the proposed rule deviates in several significant ways from the general supervision requirements found in Rule 3010. This requirement appears to present a bias against these products, and will lead to constant second-guessing of my advice and recommendations (based upon less first hand information than was available to me).

After reviewing many of these Variable Annuity product they are some that I believe are a great fit for people who are barely have enough to make it in retirement and need some kind of income guarantee along with full participation in equity markets to stay ahead of inflation. If their only option is investing in the market without any kind of minimum guarantee they wonít invest. This leaves their other option of fixed income instruments or fixed annuities which will pretty much guarantees their demise because of inflation. Down the road this will create an even bigger burden on the government to take care of peoples welfare.

The NASD proposal is a solution in search of a problem that could ultimately harm consumers by making these products less available to people who could benefit from them. I truly believe with the more regulation the government imposes the less it helps the people it was originally intended to help! For these reasons, I urge the SEC to disapprove NASD proposed Rule 2821. Thank you for your consideration of my views on this matter.

Advantage Wealth Advisors
James Biasotti
Investment Advisor Representative
Financial Advisor
CA. Insurance Lic. #OD64220
Phone(916)789-8400 x14
Toll Free (866) 645-1550
Fax (916) 789-8403
Cell# (916) 704-4869

Securities & Investment Advice offered through Transamerica Financial Advisors, Inc. A registered Broker Dealer & Investment Advisor,1150 S. Olive, Los Angeles, CA. 90015 (213)741-7702