View Whole SectionText only Print Print Manager Link
Previous Next
  Versions
(2 versions)
 
Mar 1 2005 - Jun 28 2012Jun 29 2012 onwards

2212. Telemarketing

This rule is no longer applicable. NASD Rule 2212 has been superseded by FINRA Rule 3230. Please consult the appropriate FINRA Rule.

(a) General Telemarketing Requirements
No member or person associated with a member shall initiate any telephone solicitation, as defined in paragraph (g)(2) of this rule, to:
(1) Time of Day Restriction
Any residence of a person before the hour of 8 a.m. or after 9 p.m. (local time at the called party's location), unless
(A) the member has an established business relationship with the person pursuant to paragraph (g)(1)(A)(i),
(B) the member has received that person's prior express invitation or permission, or
(C) the person called is a broker or dealer;
(2) Firm-Specific Do-Not-Call List
Any person that previously has stated that he or she does not wish to receive an outbound telephone call made by or on behalf of the member; or
(3) National Do-Not-Call List
Any person who has registered his or her telephone number on the Federal Trade Commission's national do-not-call registry.
(b) National Do-Not-Call List Exceptions
A member making telephone solicitations will not be liable for violating paragraph (a)(3) if:
(1) Established Business Relationship Exception
The member has an established business relationship with the recipient of the call. A person's request to be placed on the firm-specific do-not-call list terminates the established business relationship exception to that national do-not-call list provision for that member even if the person continues to do business with the member;
(2) Prior Express Written Consent Exception
The member has obtained the person's prior express invitation or permission. Such permission must be evidenced by a signed, written agreement between the person and member which states that the person agrees to be contacted by the member and includes the telephone number to which the calls may be placed; or
(3) Personal Relationship Exception
The associated person making the call has a personal relationship with the recipient of the call.
(c) Safe Harbor Provision
A member or person associated with a member making telephone solicitations will not be liable for violating paragraph (a)(3) if the member or person associated with a member demonstrates that the violation is the result of an error and that as part of the member's routine business practice, it meets the following standards:
(1) Written procedures. The member has established and implemented written procedures to comply with the national do-not-call rules;
(2) Training of personnel. The member has trained its personnel, and any entity assisting in its compliance, in procedures established pursuant to the national do-not-call rules;
(3) Recording. The member has maintained and recorded a list of telephone numbers that it may not contact; and
(4) Accessing the national do-not-call database. The member uses a process to prevent telephone solicitations to any telephone number on any list established pursuant to the do-not-call rules, employing a version of the national do-not-call registry obtained from the administrator of the registry no more than thirty-one (31) days prior to the date any call is made, and maintains records documenting this process.
(d) Procedures
Prior to engaging in telemarketing, a member must institute procedures to comply with paragraph (a). Such procedures must meet the following minimum standards:
(1) Written policy. Members must have a written policy for maintaining a do-not-call list.
(2) Training of personnel engaged in telemarketing. Personnel engaged in any aspect of telemarketing must be informed and trained in the existence and use of the do-not-call list.
(3) Recording, disclosure of do-not-call requests. If a member receives a request from a person not to receive calls from that member, the member must record the request and place the person's name, if provided, and telephone number on the firm's do-not-call list at the time the request is made. Members must honor a person's do-not-call request within a reasonable time from the date such request is made. This period may not exceed thirty days from the date of such request. If such requests are recorded or maintained by a party other than the member on whose behalf the telemarketing call is made, the member on whose behalf the telemarketing call is made will be liable for any failures to honor the do-not-call request.
(4) Identification of sellers and telemarketers. A member or person associated with a member making a call for telemarketing purposes must provide the called party with the name of the individual caller, the name of the member, an address or telephone number at which the member may be contacted, and that the purpose of the call is to solicit the purchase of securities or related service. The telephone number provided may not be a 900 number or any other number for which charges exceed local or long distance transmission charges.
(5) Affiliated persons or entities. In the absence of a specific request by the person to the contrary, a person's do-not-call request shall apply to the member making the call, and will not apply to affiliated entities unless the consumer reasonably would expect them to be included given the identification of the caller and the product being advertised.
(6) Maintenance of do-not-call lists. A member making calls for telemarketing purposes must maintain a record of a caller's request not to receive further telemarketing calls. A firm-specific do-not-call request must be honored for 5 years from the time the request is made.
(e) Wireless Communications
The provisions set forth in this rule are applicable to members telemarketing or making telephone solicitations calls to wireless telephone numbers.
(f) Outsourcing Telemarketing
If a member uses another entity to perform telemarketing services on its behalf, the member remains responsible for ensuring compliance with all provisions contained in this rule.
(g) Definitions
(1) Established business relationship
(A) An established business relationship exists between a member and a person if:
(i) the person has made a financial transaction or has a security position, a money balance, or account activity with the member or at a clearing firm that provides clearing services to such member within the previous 18 months immediately preceding the date of the telemarketing call;
(ii) the member is the broker/dealer of record for an account of the person within the previous 18 months immediately preceding the date of the telemarketing call; or;
(iii) the person has contacted the member to inquire about a product or service offered by the member within the previous three months immediately preceding the date of the telemarketing call.
(B) A person's established business relationship with a member does not extend to the member's affiliated entities unless the person would reasonably expect them to be included. Similarly, a person's established business relationship with a member's affiliate does not extend to the member unless the person would reasonably expect the member to be included.
(2) The terms telemarketing and telephone solicitation mean the initiation of a telephone call or message for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services, which is transmitted to any person.
(3) The term personal relationship means any family member, friend, or acquaintance of the telemarketer making the call.
(4) the term "account activity" shall include, but not be limited to, purchases, sales, interest credits or debits, charges or credits, dividend payments, transfer activity, securities receipts or deliveries, and/or journal entries relating to securities or funds in the possession or control of the member.
(5) the term "broker/dealer of record" refers to the broker/dealer identified on a customer's account application for accounts held directly at a mutual fund or variable insurance product issuer.
Amended by SR-NASD-2004-174 eff. March 1, 2005.
Amended by SR-NASD-2003-131 eff. March 31, 2004.
Amended by SR-NASD-2000-12 eff. Nov. 3, 2003.
Adopted by SR-NASD-96-28 eff. Dec. 2, 1996.

Selected Notice: 04-15, 05-07.

Previous Next