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. Investing Basics

    Explaining Delivery Versus Payment

    Delivery versus payment is a common procedure for settling the exchange of securities.
  2. Retirement

    What's a Defined Contribution Plan?

    A defined contribution plan is a company retirement plan that specifies the amount of money contributed to it.
  3. Economics

    What Happens in a Default?

    Borrowers are in default when they don’t honor a debt, whether their failure is intentional or not.
  4. Mutual Funds & ETFs

    ETF Analysis: United States Gasoline Fund

    Learn about the United States Gasoline Fund, the characteristics of the exchange-traded fund, and the suitability and recommendations of it.
  5. Mutual Funds & ETFs

    ETF Analysis: United States 12 Month Oil

    Find out more information about the United States 12 Month Oil ETF, and explore detailed analysis of the characteristics, suitability and recommendations of it.
  6. Mutual Funds & ETFs

    ETF Analysis: ProShares Ultra Nasdaq Biotechnology

    Find out information about the ProShares Ultra Nasdaq Biotechnology exchange-traded fund, and learn detailed analysis of its characteristics and suitability.
  7. Insurance

    Top 6 Car Insurance Companies in New York

    Read about the top private auto insurers licensed to operate in New York, and learn about recent trends in market share among these companies.
  8. Mutual Funds & ETFs

    ETF Analysis: Direxion Daily S&P Biotech Bull 3X

    Learn more about the Direxion Daily S&P Biotech Bull 3x exchange-traded fund, a new triple-leveraged ETF tracking biotechnology equities.
  9. Mutual Funds & ETFs

    ETF Analysis: First Trust Health Care AlphaDEX

    Learn more about the First Trust Health Care AlphaDEX exchange-traded fund, an indexed fund that uses an advanced stock selection methodology.
  10. Investing

    Charles Koch Biography

    Charles de Ganahl Koch is the CEO and co-owner of Koch Industries, an oil and industrial conglomerate that ranks as one of the largest privately held companies in America. While he and his company ...
RELATED TERMS
  1. Sticky Wage Theory

    An economic hypothesis theorizing that pay of employees tends ...
  2. Cost Of Funds

    The interest rate paid by financial institutions for the funds ...
  3. Earnings Before Interest & Tax ...

    An indicator of a company's profitability, calculated as revenue ...
  4. Implied Volatility - IV

    The estimated volatility of a security's price.
  5. Plain Vanilla

    The most basic or standard version of a financial instrument, ...
  6. Operating Cost

    Expenses associated with the maintenance and administration of ...
RELATED FAQS
  1. Are dividends considered passive or ordinary income?

    Despite the fact that earning dividends requires no active participation on the part of the shareholder, they do not meet ... Read Full Answer >>
  2. Is dividend income taxable?

    Dividend income is taxable but it is taxed in different ways depending on whether the dividends are qualified or nonqualified. ... Read Full Answer >>
  3. How do dividends affect net asset value (NAV) in mutual funds?

    Distribution of dividends reduces the net asset value (NAV) of mutual fund shares. However, this doesn't mean that fund investors ... Read Full Answer >>
  4. Are mutual funds considered retirement accounts?

    Unlike a 401(k) or Individual Retirement Account (IRA), mutual funds are not classified as retirement accounts. Employers ... Read Full Answer >>
  5. How do dividends affect the balance sheet?

    Dividends paid in cash affect a company's balance sheet by decreasing the company's cash account on the asset side and decreasing ... Read Full Answer >>
  6. Do mutual funds invest only in stocks?

    Mutual funds invest in stocks, but certain types also invest in government and corporate bonds. Stocks are subject to the ... Read Full Answer >>
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!