[Federal Register Volume 60, Number 88 (Monday, May 8, 1995)]
[Notices]
[Pages 22592-22593]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-11190]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35657; File No. SR-NASD-95-13]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by National Association of Securities Dealers, Inc., Relating to
Cold Calling Requirements
May 1, 1995.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on April
10, 1995, the National Association of Securities Dealers, Inc.
(``NASD'' or ``Association'') filed with the Securities and Exchange
Commission (``SEC'' or ``Commission'') the proposed rule change as
described in Items I, II, and III below, which Items have been prepared
by the NASD. The Commission is publishing this notice to
[[Page 22593]] solicit comments on the proposed rule change from
interested persons.
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The NASD is herewith filing a proposed rule change to Article III,
Section 21 of the Rules of Fair Practice. Proposed new language is
italicized.
Books and Records
Sec. 21.
* * * * *
Cold Call Requirements
(g) Each member shall make and maintain a centralized do-not-call
list of persons who do not wish to receive telephone solicitations from
such member or its associated persons.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the NASD included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The NASD had prepared summaries, set forth in Sections
(A), (B), and (C) below, of the most significant aspects of such
statements.
(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
Pursuant to the Telephone Consumer Protection Act (TCPA), which
became law in 1991, the Federal Communications Commission (FCC)
developed rules, effective December 20, 1992, to protect the rights of
telephone consumers while allowing legitimate telemarketing practices.
In addition, the Telemarketing and Consumer Fraud and Abuse Prevention
Act (``Prevention Act'') became law in August, 1994, and requires the
Federal Trade Commission (FTC) to adopt rules on abusive cold calling
within twelve (12) months.
Members who engage in telephone solicitation to market their
products and services are subject to the requirements of the rules of
the FCC and FTC relating to telemarketing practices and the rights of
telephone consumers and shall refer to FCC rules for specific
restrictions on telephone solicitations. This includes, but is not
limited to, the requirements to make and maintain a list of persons who
do not want to receive telephone solicitations (a ``do-not-call''
list).
The Prevention Act also requires the SEC to engage in its own
additional rulemaking, or, alternatively, to require the SROs to
promulgate telemarketing rules consistent with the legislation. In
August of 1994, SEC Chairman Arthur Levitt wrote to the NASD and NYSE
urging the SROs to adopt a rule similar to the cold calling rule
established by the FCC. Since then, there have been ongoing discussions
between the SEC and SROs on the structure of a rule or rules to apply
pursuant to the Prevention Act. As a first step, the NASD is proposing
to adopt a rule to implement that portion of the FCC rules that
requires the establishment and maintenance of a do-not-call list. The
proposed rule would add new Subsection (g) to Section 21 of Article III
of the Rules of Fair Practice to require that each member who engages
in telephone solicitation to market its products and services shall
make and maintain a centralized do-not-call list of persons who do not
wish to receive telephone solicitations from such member of its
associated persons.
The NASD believes that the proposed rule change is consistent with
the provisions of Section 15A(b)(6) of the Act,\1\ which require that
the Association adopt and amend its rules to promote just and equitable
principles of trade, and generally provide for the protection of
customers and the public interest in that the proposed rule change
establishes minimum standards designed to protect members' customers
against abusive telemarketing practices.
\1\15 U.S.C. 78o-3.
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(B) Self-Regulatory Organization's Statement on Burden on Competition
The NASD does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
A. By order approve such proposed rule change, or
B. Institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street NW., Washington, D.C. 20549.
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for inspection and copying in the
Commission's Public Reference Room. Copies of such filing will also be
available for inspection and copying at the principal office of the
NASD. All submissions should refer to file number SR-NASD-95-13 and
should be submitted by May 30, 1995.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\2\
\2\17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-11190 Filed 5-5-95; 8:45 am]
BILLING CODE 8010-01-M
