From: D. Max Bruce
Sent: July 2, 2006
Subject: File No. SR-NASD-2004-183

I have concerns about the 2nd amendment as follows:

1.  Why do we need product specific suitability criteria? If you enforce current suitability criteria that would take care of your concerns. If you feel they are needed then obtain input from the people who develop and distribute these products to make sure the criteria is clear and uniformly applied. Three areas of particular concern is in the definition of Investment Experience, Intended Use of the Deferred Variable Annuity, Existing Investment and Life Insurance Holdings as to how these will affect the client. All rules should be for the benefit of the client and not counter intuitive.
2.  Obligation to Inform Customers of the Material Features of the VA. This is what we have a prospectus for and company brochures that explain in detail about the products. Why do we need to be redundant in explaining details twice to the same person who is purchasing the product? What other disclosure could possibly be needed?
3.  Principal Review and Approval. Two business days is an unreasonable amount of time to expect compliance with this rule. Mail time is one concern to qualify for this time period of review and approval. What makes a difference if a customer has made a VA exchange in the last 36 months? The client is not obligated to share that information with anyone if they prefer not to and privacy regulations would keep us from finding out on our own.
4.  Training is a concerned requirement under this amendment, because I as an adviser are already meeting NASD Conduct Rule 2310's requirement that a member make suitable recommendations to his client. This seems to be another redundant requirement being proposed. Let's say I do not sell VA's, am I going to have to be trained anyway because it is a requirement?
This would be a waste of time on my part and the trainers part.
5.  I realize that there have been many abuses done to customers who have purchased VA's or exchanged VA's. I do not believe the sales abuses have occurred because the NASD's rules and enforcement mechanisms were not strong enough to prevent them. I believe that more meaningful disclosures to customers via prospectuses that give the necessary information to customers of the material features of VA products is the ultimate way to eliminate most sales practice abuses.
   My greatest fear is that these new rules will keep customers from being able to purchase VA products that they want because I am put under restraints that will keep me from recommending them to clients for legitimate tax-deferred savings, estate and retirement planning tools. What a great loss to our future customers that we restrict their choices to products that may help them the most. Those who set the rules also have a responsibility to allow freedom of choices. Our clients are more educated than ever because they work with us.

D. Max Bruce
DM Bruce Associates
10551 Barkley, Suite 104
Overland Park, KS 66212
913.341.9038 (FAX)

D. Max Bruce is a Registered Representative offering securities and advisory services through NATIONAL PLANNING CORPORATION (NPC), member NASD,/SIPC, a Registered Investment Advisor. DM Bruce Associates and NPC are separate and unrelated companies.