Requirements of member firms in maintaining do-not-call lists under NASD Rule 3110.


November 1, 1995

 

Re: NASD Notice to Members 95-54

 

We are in receipt of your letter dated October 10, 1995 which requests NASD staff guidance as to provisions of recently amended Section 21(g) of Article III of the NASD's Rules of Fair Practice ("RFP"). In general, Section 21(g) requires members to establish and maintain a do-not-call list for persons who do not wish to receive telephone solicitations from members or their associated persons.

 

Specifically, your letter states that your business entails extensive cold calling. It also states that the cold calling only includes businesses and not residences. As a result, you reach a conclusion that since your firm does not contact residences, you (the firm) are not required to comply with Section 21(g) of the RFP, and do not have to maintain a do-not-call list. Your conclusion and understanding of the requirements of Section 21(g) are inaccurate.

 

First, Section 21(g) of the RFP requires members who are involved in telemarketing, and whom make cold calls to the public, to establish and maintain a do-not-call list notwithstanding whether you contact businesses or residences. If a "person" informs the member that it desires not to be contacted, then the member is obligated to place the persons name on the do-not-call list. This would include names of businesses, since businesses are considered legal "persons" in most states.

 

Your confusion with the requirements with the NASD rule may stem from your understanding of the Federal Communication Commission ("FCC") telemarketing rules, which are separate rules from the NASD's. As you are aware, the FCC recently adopted comprehensive rules to, among other things, regulate certain abusive telemarketing practices. The details of their rules are summarized in a recent Regulatory and Compliance Alert (October, 1994), and are available to the public by contacting the FCC and obtaining FCC Public Notice DA 92-1716 (January 11, 1993). Included in the FCC rules were provisions regulating telemarketing practices by, among other things, restricting the nature and timing of the calls to residences, identification requirements, do-not-call lists, established procedures, and training requirements.

 

In contrast, the NASD, in amending Article III, Section 21(g) of the RFP, adopted a do-not-call list provision. The NASD rule does not include the other provisions of the FCC rules. However, the NASD expects its members to comply with the FCC rules and other rules of other federal and state organizations, if applicable. Questions regarding compliance with these provisions should be directed to the applicable organization.

 

If you should have any additional questions, please contact the undersigned at (202) 728-8014.

 

Sincerely,

David A. Spotts