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
Related Articles
  1. Mutual Funds & ETFs

    The 4 Best T. Rowe Price Funds for Growth Investors in 2016 (TROW)

    Discover the four best mutual funds administered and managed by T. Rowe Price that specialize in investing in stocks of growth companies.
  2. Mutual Funds & ETFs

    The 3 Best T. Rowe Price Funds for Value Investors in 2016

    Read analyses of the top three T. Rowe Price value funds open to new investors, and learn about their investment objectives and historical performances.
  3. Tax Strategy

    Profit from Art with a Charitable Remainder Trust

    With a CRUT, art collectors can avoid capital gains taxes on the sale of art– while also leaving their favorite charity a legacy.
  4. Active Trading Fundamentals

    4 Stocks With Bullish Head and Shoulders Patterns for 2016 (PG, ETR)

    Discover analyses of the top four stocks with bullish head and shoulders patterns forming in 2016, and learn the prices at which they should be considered.
  5. Economics

    How Negative Interest Rates Work

    Policymakers in Europe go for the unconventional: negative interest. What could happen?
  6. Budgeting

    The Honest Company Bundles Review: Are They Worth It?

    Learn more about The Honest Company and its bundle subscription services, which deliver discounted diapers, formula and other baby products to your doorstep.
  7. Fundamental Analysis

    Will Airlines Keep Flying High in 2016?

    Learn why the airline industry has such a unique set of variable and fixed costs that makes it very difficult to forecast its performance each year.
  8. Investing News

    These Free Super Bowl Ads Happened (BUD)

    The average 30-second Super Bowl cost marketers $5 million in 2016. But these companies benefited from free advertising during and after the game.
  9. Mutual Funds & ETFs

    Top 3 Lazard Funds for Retirement Diversification in 2016

    Learn about Lazard Asset Management, its long history of strong performance and the top three Lazard funds to consider for retirement diversification.
  10. Investing

    Harry Potter and the Unnecessary 8th Book

    A "special rehearsal edition" of the recent Harry Potter play--to be released July 31 as the eighth book in the series--will boost the franchise's fortunes, which have been sagging lately.
RELATED TERMS
  1. Bail-In

    Rescuing a financial institution that is on the brink of failure ...
  2. Carbon Dioxide Tax

    A tax on businesses and industries that produce carbon dioxide ...
  3. Nonrenewable Resource

    A resource of economic value that cannot be readily replaced ...
  4. Green Economics

    Green economic theories encompass a wide range of ideas all dealing ...
  5. Corporate Accountability

    The performance of a publicly traded company in non-financial ...
  6. Green Fund

    A mutual fund or other investment vehicle that will only invest ...
RELATED FAQS
  1. When does a growth stock turn into a value opportunity?

    A growth stock turns into a value opportunity when it trades at a reasonable multiple of the company's earnings per share ... Read Full Answer >>
  2. What is arbitrage?

    Arbitrage is basically buying in one market and simultaneously selling in another, profiting from a temporary difference. ... Read Full Answer >>
  3. What is Fibonacci retracement, and where do the ratios that are used come from?

    Fibonacci retracement is a very popular tool among technical traders and is based on the key numbers identified by mathematician ... Read Full Answer >>
  4. What is a derivative?

    A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset, ... Read Full Answer >>
  5. What is finance?

    "Finance" is a broad term that describes two related activities: the study of how money is managed and the actual process ... Read Full Answer >>
  6. What items are considered liquid assets?

    A liquid asset is cash on hand or an asset that can be readily converted to cash. An asset that can readily be converted ... Read Full Answer >>
Hot Definitions
  1. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  2. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  3. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  4. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  5. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
Trading Center