Series 26

By Investopedia AAA

Communications with Prospects and Customers - FINRA Conduct Rule 2212


Telemarketing

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:

  1. Time of Day Restriction
    Any residence of a person before the hour of 8am or after 9pm (local time at the called party's location), unless one of the following is true:
    • The member has an established business relationship with the person
    • The member has received that person's prior express invitation or permission
    • The person called is a broker or dealer

  2. Firm-Specific Do-Not-Call List
    This includes 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.

  3. National Do-Not-Call List
    This includes any person who has registered his or her telephone number on the Federal Trade Commission's national do-not-call registry.

Exemptions
A member making telephone solicitations will not be liable for violating the rule regarding the national do-not-call list under any of the following situations:

  1. Established Business Relationship Exception
    The member has an established business relationship with the recipient of the call. However, a person's request to be placed on the firm-specific do-not-call list terminates the established business relationship exception to the 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.

  3. Personal Relationship Exception
    The associated person making the call has a personal relationship with the recipient of the call.


Exam Tips and Tricks
The exceptions to the national do-not-call list are likely to be tested. But watch for the firm-specific exception for established clients.


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:

  • The member has an established business relationship with the person
  • The member has received that person's prior express invitation or permission
  • The person called is a broker or dealer

Wireless Communications
The provisions set forth in this rule are applicable to members' telemarketing or making telephone solicitations calls to wireless telephone numbers.

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.

Introduction

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