FINRA Rule 2330 establishes sales-practice, suitability, and supervisory standards for deferred variable annuity transactions. Before recommending a contract or an exchange, firms must evaluate the customer's age, liquidity needs, time horizon, risk tolerance, and the specific features and costs of both the existing and proposed contracts. The rule requires principal review of each recommendation, supervisory procedures tailored to variable annuities, and representative training.It also demands careful analysis of 1035 exchanges, including surrender charges, new fees, and potential loss of benefits. Documentation must evidence that the recommendation is in the customer'best interest under applicable standards, not just permissible. Rule 2330 promotes appropriate,transparent, and well-supervised variable annuity sales.

For every variable annuity sale or exchange, advisors complete a Rule 2330 checklist covering liquidity, time horizon, living-benefit riders, and 1035 impacts. Principals review orders pre-submission and compare exchanges to avoid harm from new surrender charges or lost guarantees.Training logs and documentation support audits and demonstrate adherence.