Equity index annuities will come under federal regulation as securities under a final rule approved 4-1 by the Securities and Exchange Commission, according to Investment News.

The SEC took the action after some 4,800 comment letters were filed on the proposal, first promulgated last June. The rule will go into effect for equity index annuities issued after 12 January, 2011.

The vast majority of the comments strongly opposed the SEC’s move, arguing EIAs are properly regulated as insurance products by state insurance regulators.

SEC chairman Christopher Cox said the action was necessary to provide the protections of securities laws regarding full diclosures and fair sales practices, and which police marketing tactics used to sell the products to investors, many of whom are seniors.

More than $123 billion is invested in equity index annuities.

Investments in EIAs can grow based on changes in a securities index, but they also include minimum guarantees.