Subject: File No. SR-NASD-2004-183
From: Randy Nicholls

August 1, 2005

re: NASD proposed rule 2821

Dear Sirs,

I am a registered representative who regularly recommends variable annuities in my practice. I have been registered for over 20 years and find the proposed rule weak in a number of areas. Variable annuities are a complex investment vehicle which can be valuable when used appropriately. Any rule should be clear enough to allow investment professionals to rely on it and not so restrictive as to discourage use of the product for anyone.

The proposed language regarding time horizon is particularly worrisome. Time horizon should be one factor in recommending a VA but should not be the only one. I do not know what is intended by long term investment objective. It is conceivable that a person without say a twenty year time horizon might elect to invest in a VA based on other features of the product.

In my opinion it would be equally inappropriate to forbid the purchase of a VA based only on ones age or to limit the amount one could invest to a specific dollar amount. If you choose to clarify suitability requirements then please make them clear, relevant and practical.


Randy Nicholls