Product-Specific Disclosures: Investment Companies and Variable Contracts

What this video covers

• Why the mutual fund advertising rule is not a safe harbor from anti-fraud liability, even when formatting requirements are perfectly followed
• How standardized return periods (1-year, 5-year, 10-year) work in mutual fund advertising, and why cherry-picking custom time periods is prohibited
• What summary prospectus delivery satisfies: the legal prospectus delivery requirement, with the statutory prospectus and Statement of Additional Information (SAI) available online free of charge
• The exact timing for delivering a statutory prospectus after investor request: three business days
• Why variable annuity guarantees depend solely on the insurance company's claims-paying ability and general account, not the separate account where investment risk lives
• Why representing variable contracts as short-term, liquid investments is strictly prohibited: surrender charges, 10% tax penalty before age 59-1/2, and ordinary income tax
• The 10-business-day filing requirement for certain variable contract retail communications with FINRA
• Why a bond mutual fund volatility rating must never be called a risk rating