FINRA Manual: Contents
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TO: All NASD Members and Other Interested Persons
FROM: Registration of Persons Soliciting on Behalf of Members
The NASD reminds members that Schedule C to the NASD By-Laws requires that members register any person who contacts potential customers of the firm for the purpose of opening accounts, soliciting orders, or qualifying potential customers for the firm, i.e., any person engaged in "cold calling." The NASD Board of Governors is aware that many member firms continue to allow unregistered persons to solicit customers for the firm.
In Notice to Members 85-48, dated July 17, 1985, the NASD announced that members must register personnel who solicit new accounts by telephone, notwithstanding any limitation of such solicitations to prepared scripts discussing generic products and services offered by the member. A copy of Notice to Members 85-48 is attached.
The Board wants to emphasize that this prohibition is not meant to restrict a member's administrative personnel, in the normal course of their duties, from contacting customers regarding routine administrative matters involving customers' accounts or from extending invitations to the public to firm-sponsored events, such as investment seminars at which any substantive presentations and accounts or order solicitations will be made by appropriately registered personnel.
Member firms that use unregistered individuals to solicit accounts will be subject to disciplinary action. Several District Business Conduct Committees have recently brought formal complaints against member firms that have continued to use unregistered account solicitors.
Questions concerning this notice can be directed to Frank McAuliffe, Vice President, NASD Qualifications, at (301) 738-6694
John T. Wall
Executive Vice President
Member and Market Services