Regulators gave bank brokerage representatives an overview of some recent initiatives at a meeting here this week.
Executives from the National Association of Securities Dealers and the Securities and Exchange Commission spoke Monday to more than 100 bank, mutual fund, and third-party marketing executives attending the Bank Securities Association's annual convention.
The National Association of Securities Dealers is close to issuing guidelines on sales practices for variable annuities, said R. Clarke Hooper, executive vice president of the NASD's regulation unit.
The NASD plans to issue a notice describing a variable annuity contract and addressing the collection of customer information and how product information is provided, Ms. Hooper said. The recommendations will be based on the "best practices" of members.
The NASD's proposed notice, which will be presented to its board this month, identifies areas of concern in the supervisory procedures of members that offer and sell variable annuities, Ms. Hooper said.
Variable annuities are mutual funds wrapped in a tax-deferred insurance wrapper. Brokerages should ensure that their customers understand the difference between annuities and traditional mutual funds, the NASD said.
"We felt like we needed to lay out some guidelines," Ms. Hooper said.
The NASD is also evaluating comments on a recent proposal to exempt certain employees affiliated with a brokerage from NASD registration, Ms. Hooper said. Employees who participate in limited marketing activities but do not actually sell securities would be exempt.
Banks have objected to the "cold calling" proposal partly because certain bank employees could fall under the NASD's purview.
"I presume the NASD didn't mean to regulate bank employees," said Robert M. Kurucza, general counsel to the Bank Securities Association and moderator of the panel. But "we'll wait," said Mr. Kurucza, a partner with Morrison & Foerster in Washington, who submitted comments on the issue to the NASD.
Though the comment period ended Jan. 8, Ms. Hooper said, the NASD would be open to additional comments.
Meanwhile, the SEC is working on several initiatives that will impact banks' securities and mutual fund operations, said Paul Roye, director of the SEC's division of investment management.
Mr. Roye said the agency is evaluating the effects of its "plain English" initiatives for mutual fund prospectuses to see if there should be additional disclosure. And the SEC will consider whether after-tax information should be required when reporting fund performance to the public, he said.
The SEC plans to conduct a study on mutual fund fees, he said, but did not provide details. The agency is also considering ways to improve fund governance, including assessing rules on the percentage of outside directors that must sit on fund boards, he said.