12.8.2009 The SEC filed a supplemental brief in the litigation challenging Rule 151A (which would require the registration of virtually all indexed annuities). In its brief, the SEC consented to a two-year stay of Rule 151A’s effective date to run from the date of publication in the Federal Register of a reissued or retained Rule 151A. Previously, in that litigation, the U.S. Court of Appeals for the District of Columbia Circuit issued an opinion on July 21, 2009, holding that: (1) while the SEC had reasonably interpreted the exemption for annuity contracts in § 3(a)(8) of the Securities Act of 1933 (1933 Act) in connection with Rule 151A, (2) the § 2(b) analysis that the SEC had conducted was “lacking” because it “failed to properly consider the effect of [Rule 151A] upon efficiency, competition, and capital formation”; (§ 2(b)) of the 1933 Act requires that when the SEC is engaged in rulemaking and is required to consider or determine whether an action is necessary or appropriate in the public interest, the SEC “shall also consider, in addition to the protection of investors, whether the action will promote efficiency, competition, and capital formation”). The court’s July opinion remanded Rule 151A to the SEC, without vacating the Rule and without a stay of the Rule’s effective date, for further consideration consistent with the court’s opinion.

Subsequently, on November 6, the court issued a Per Curiam order directing the parties to submit additional briefs addressing the appropriate remedy for the SEC’s failure properly to consider the rule’s effect upon efficiency, competition and capital formation. The SEC filed its supplemental brief in response to the court’s November 6 Per Curium order. In that brief, in addition to consenting to a two-year stay, the SEC also argued that remand without vacatur is the most equitable and appropriate remedy in the case.

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