16574 Federal Register / Vol. 77, No. 55 / Wednesday, March 21, 2012 / Notices 

5 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The proposed rule change is substantially 

similar in all material respects to Financial Industry 

Regulatory Authority, Inc. (‘‘FINRA’’) Rule 3230 

(Telemarketing), which the Commission recently 

approved. See Securities Exchange Act Release No. 

66279 (Jan. 30, 2012), 77 FR 5611 (Feb. 3, 2012) 

(SR–FINRA–2011–059) (approval order of proposed 

rule change to adopt telemarketing rule). The 

proposed rule change amends the name of Rule 9.24 

from Telephone Solicitation to Telemarketing. 

4The Exchange adopted Rule 9.24, effective 

December 13, 2005, in response to the 

recommendations of an industry task force, 

comprised of representatives from various industry 

regulatory and self-regulatory organizations, formed 

to review broker-dealer telemarketing practices and 

compliance with the Telephone Consumer 

Protection Act of 1991 (‘‘TCPA’’), 47 U.S.C. 227, as 

well as with Federal Communications Commission 

(‘‘FCC’’) rules and regulations that implemented the 

TCPA. See Securities Exchange Act Release No. 

36588 (Dec. 13, 1995), 60 FR 65703 (Dec. 20, 21995) 

(SR–CBOE–1995–063) (order approving adoption of 

Rule 9.24). 

5The proposed rule change also amends 

Appendix A to the CBOE Stock Exchange, LLC 

(‘‘CBSX’’) Rules to explicitly incorporate proposed 

Rule 9.24 CBSX Rules. CBSX is a stock trading 

facility of CBOE. 

6 15 U.S.C. 6101–6108. 

7 16 CFR 310.1–.9. The FTC adopted these rules 

under the Prevention Act in 1995. See Federal 

Trade Commission, Telemarketing Sales Rule, 60 

FR 43842 (Aug. 23, 1995). 

8 15 U.S.C. 6102. 

9See Telemarketing and Consumer Fraud and 

Abuse Prevention Act; Determination that No 

Additional Rulemaking Required, Securities 

Exchange Act Release No. 38480 (Apr. 7, 1997), 62 

FR 18666 (Apr. 16, 1996). The Commission also 

determined that some provisions of the FTC’s 

telemarketing rules related to areas already 

extensively regulated by existing securities laws or 

activities not applicable to securities transactions 

See id. 

10See Securities Exchange Act Release No. 39010 

(Sept. 3, 1997), 62 FR 47712 (Sept. 10, 1997) (SR– 

CBOE–1997–039) (order granting accelerated 

approval of amendments to Rule 9.24). 

11See, e.g., Federal Trade Commission, 

Telemarketing Sales Rule, 73 FR 51164 (Aug. 29, 

2008) (amendments to the Telemarketing Sales Rule 

relating to prerecorded messages and call 

abandonments); and Federal Trade Commission, 

Telemarketing Sales Rule, 68 FR 4580 (Jan. 29, 

2003) (amendments to the Telemarketing Sales Rule 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street, NE., 

Washington, DC 20549 on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of such filing 

also will be available for inspection and 

copying at the principal office of CME 

and on CME’s Web site at http:// 

www.cmegroup.com/market-regulation/ 

files/SEC_19b-4_x12-07x.pdf. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. 

All submissions should refer to File 

Number SR–CME–2012–07 and should 

be submitted on or before April 11, 

2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.5

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–6763 Filed 3–20–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66609; File No. SR–CBOE– 

2012–024] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Relating to Telemarketing 

Rules 

March 15, 2012. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on March 2, 

2012, the Chicago Board Options 

Exchange, Incorporated (the ‘‘Exchange’’ 

or ‘‘CBOE’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

substantially prepared by the Exchange. 

The Commission is publishing this 

notice to 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 Exchange proposes to amend 

Rule 9.24, Telephone Solicitation, to 

revise and add provisions that are 

substantially similar to Federal Trade 

Commission (‘‘FTC’’) rules that prohibit 

deceptive and other abusive 

telemarketing acts or practices.3 The 

text of the proposed rule change is 

available on the Exchange’s Web site 

(http://www.cboe.com/AboutCBOE/ 

CBOELegalRegulatoryHome.aspx), at 

the Exchange’s Office of the Secretary, 

and at the Commission’s Public 

Reference Room. 

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 

Exchange 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 

Exchange has 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Rule 9.24, Telephone Solicitation,4 to 

revise and add provisions that are 

substantially similar to FTC rules that 

prohibit deceptive and other abusive 

telemarketing acts or practices.5 Rule 

9.24 requires Trading Permit Holders to, 

among other things, maintain do-notcall lists, limit the hours of telephone 

solicitations, and not use deceptive and 

abusive acts and practices in connection 

with telemarketing. The Commission 

directed CBOE to enact these 

telemarketing rules in accordance with 

the Telemarketing Consumer Fraud and 

Abuse Prevention Act of 1994 

(‘‘Prevention Act’’).6 The Prevention Act 

requires the Commission to promulgate, 

or direct any national securities 

exchange or registered securities 

association to promulgate, rules 

substantially similar to the FTC rules 7

to prohibit deceptive and other abusive 

telemarketing acts or practices, unless 

the Commission determines either that 

the rules are not necessary or 

appropriate for the protection of 

investors or the maintenance of orderly 

markets, or that existing federal 

securities laws or Commission rules 

already provide for such protection.8

In 1997, the Commission determined 

that telemarketing rules promulgated 

and expected to be promulgated by selfregulatory organizations, together with 

the other rules of the self-regulatory 

organizations, the federal securities laws 

and the Commission’s rules thereunder, 

satisfied the requirements of the 

Prevention Act because, at the time, the 

applicable provisions of those laws and 

rules were substantially similar to the 

FTC’s telemarketing rules.9 CBOE 

amended Rule 9.24 at that time in 

response to the Commission’s 

determination.10 Since 1997, the FTC 

has amended its telemarketing rules in 

light of changing telemarketing practices 

and technology.11


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establishing requirements for sellers and 

telemarketers to participate in the national do-notcall registry). 

12See supra note 8. 

13See Letter from Robert W. Cook, Director, 

Division of Trading and Markets, Securities and 

Exchange Commission, to William J. Brodsky, 

Chairman and Chief Executive Officer of CBOE 

Holdings, Inc. (May 12, 2011). 

14 Id. 

15The proposed rule change is also substantially 

similar to FINRA Rule 3230. See supra note 3. 

16An ‘‘associated person’’ is any partner, officer, 

director, or branch manager of a Trading Permit 

Holder (or any person occupying a similar status or 

performing similar functions), any person directly 

or indirectly controlling, controlled by, or under 

common control with a Trading Permit Holder, or 

any employee of a Trading Permit Holder. See Rule 

1.1(qq). 

17An ‘‘outbound telephone call’’ is a telephone 

call initiated by a telemarketer to induce the 

purchase of goods or services or to solicit a 

charitable contribution from a donor. A 

‘‘telemarketer’’ is any person who, in connection 

with telemarketing, initiates or receives telephone 

calls to or from a customer or donor. A ‘‘customer’’ 

is any person who is or may be required to pay for 

goods or services through telemarketing. A ‘‘donor’’ 

means any person solicited to make a charitable 

contribution. A ‘‘person’’ is any individual, group, 

unincorporated association, limited or general 

partnership, corporation, or other business entity. 

‘‘Telemarketing’’ means consisting of or relating to 

a plan, program, or campaign involving at least one 

outbound telephone call, for example cold-calling. 

The term does not include the solicitation of sales 

through the mailing of written marketing materials, 

when the person making the solicitation does not 

solicit customers by telephone but only receives 

calls initiated by customers in response to the 

marketing materials and during those calls takes 

orders only without further solicitation. For 

purposes of the previous sentence, the term ‘‘further 

solicitation’’ does not include providing the 

customer with information about, or attempting to 

sell, anything promoted in the same marketing 

materials that prompted the customer’s call. A 

‘‘charitable contribution’’ means any donation or 

gift of money or any other thing of value, for 

example a transfer to a pooled income fund. See 

proposed Rule 9.24(n)(3), (11), (16), (17), (20), and 

(21); see also FINRA Rule 3230(m)(11), (14), (16), 

(17), and (20); and 16 CFR 310.2(f), (l), (n), (v), (w), 

(cc), and (dd). 

18This restriction was previously included under 

Rule 9.24(d). See the discussion below under Item 

3(a), Trading Permit Holder’s Firm-Specific Do-NotCall List. 

19See 16 CFR 310.4(b)(1)(iii)(A) and (B) and (c); 

see also FINRA Rule 3230(a). The proposed rule 

change also deletes language in Rule 9.24(a) 

regarding the purpose of an outbound telephone 

call and the definition of telemarketing, which are 

now included in the proposed definitions of those 

terms. See proposed Rule 9.24(n)(16) and (21) and 

supra note 17. In addition, the proposed rule 

change amends Rule 9.24(a) to delete an exception 

to the telemarketing restriction that permits 

outbound telephone calls to a person with the 

person’s prior consent and moves that exception to 

proposed Rule 9.24(c). See the discussion below 

under Item 3(a), Exceptions. 

20See Federal Trade Commission, Telemarketing 

Sales Rule, 68 FR 4580 (Jan. 29, 2003) at 4628; and 

Federal Trade Commission, Telemarketing Sales 

Rule, 60 FR 43842 (Aug. 23, 1995) at 43855. 

21See proposed Rule 9.24(n)(16) and supra note 

17. 

22See proposed Rule 9.24(b); see also FINRA Rule 

3230(d)(4). The proposed rule change is 

substantially similar to the FCC’s regulations 

regarding call disclosures. See 47 CFR 

64.1200(d)(4). 

23The proposed rule change amends Rule 9.24(c) 

to provide that the exception in that paragraph will 

apply only to the prohibition in proposed paragraph 

(a)(1) and will no longer apply to the requirement 

in paragraph (b) regarding caller disclosures. The 

Exchange believes that even if a Trading Permit 

Holder satisfies the exception in paragraph (c), the 

Trading Permit Holder should still make the caller 

disclosures required by paragraph (b) to the called 

person to ensure that the called person receives 

sufficient information regarding the purpose of the 

call. 

24An ‘‘established business relationship’’ is a 

relationship between a Trading Permit Holder and 

a person if (a) the person has made a financial 

transaction or has a security position, a money 

balance, or account activity with the Trading Permit 

Holder or at a clearing firm that provides clearing 

services to the Trading Permit Holder within the 18 

months immediately preceding the date of an 

outbound telephone call; (b) the Trading Permit 

Holder is the broker-dealer of record for an account 

of the person within the 18 months immediately 

preceding the date of an outbound telephone call; 

or (c) the person has contacted the Trading Permit 

Holder to inquire about a product or service offered 

by the Trading Permit Holder within the three 

months immediately preceding the date of an 

outbound telephone call. A person’s established 

business relationship with a Trading Permit Holder 

does not extend to the Trading Permit Holder’s 

affiliated entities unless the person would 

reasonably expect them to be included. Similarly, 

a person’s established business relationship with a 

Trading Permit Holder’s affiliate does not extend to 

the Trading Permit Holder unless the person would 

reasonably expect the Trading Permit Holder to be 

included. The term ‘‘account activity’’ includes, but 

is not limited to, purchases, sales, interest credits 

or debits, charges or credits, dividend payments, 

transfer activity, securities receipts or deliveries, 

and/or journal entries relating to securities or funds 

in the possession or control of the Trading Permit 

Holder. The term ‘‘broker-dealer of record’’ refers to 

the broker or dealer identified on a customer’s 

account application for accounts held directly at a 

mutual fund or variable insurance product issuer. 

See proposed Rule 9.24(n)(1), (4), and (12); see also 

16 CFR 310.2(o) and FINRA Rule 3230(m)(1), (4), 

and (12). 

25See id.; see also FINRA Rule 3230(a). 

As mentioned above, the Prevention 

Act requires the Commission to 

promulgate, or direct any national 

securities exchange or registered 

securities association to promulgate, 

rules substantially similar to the FTC 

rules to prohibit deceptive and other 

abusive telemarketing acts or 

practices.12 In May 2011, Commission 

staff directed CBOE to conduct a review 

of its telemarketing rule and propose 

rule amendments that provide 

protections that are at least as strong as 

those provided by the FTC’s 

telemarketing rules.13 Commission staff 

had concerns ‘‘that the [self-regulatory 

organization] rules overall have not kept 

pace with the FTC’s rules, and thus may 

no longer meet the standards of the 

[Prevention] Act.’’ 14

The proposed rule change, as directed 

by the Commission staff, amends and 

adopts provisions in Rule 9.24 that are 

substantially similar to the FTC’s 

current rules that prohibit deceptive and 

other abusive telemarketing acts or 

practices as described below.15

Telemarketing Restrictions 

The proposed rule change amends the 

telemarketing restrictions in Rule 

9.24(a) to provide that no Trading 

Permit Holder or associated person 16

may make an outbound telephone call 17

to: 

(1) Any person’s residence at any time 

other than between 8 a.m. and 9 p.m. 

local time at the called person’s 

locations; 

(2) Any person that previously has 

stated that he or she does not wish to 

receive any outbound telephone calls 

made by or on behalf of the Trading 

Permit Holder;18 or 

(3) Any person who has registered his 

or her telephone number on the FTC’s 

national do-not-call registry. 

The proposed rule change is 

substantially similar to the FTC’s 

provisions regarding abusive 

telemarketing acts or practices.19 The 

FTC provided a discussion of the 

provision when it was adopted pursuant 

to the Prevention Act.20

Caller Disclosures 

The proposed rule change amends 

Rule 9.24(b) to delete the phrase ‘‘for the 

purpose of telemarketing,’’ which 

concept is included in the proposed 

definition of ‘‘outbound telephone 

call.’’ 21 The proposed rule change also 

provides that the telephone number that 

a caller provides to a person as the 

number at which the caller may be 

contacted may not be a 900 number or 

any other number for which charges 

exceed local or long-distance 

transmission charges.22

Exceptions 

The proposed rule change amends 

Rule 9.24(c) to provide that the 

prohibition in paragraph (a)(1) 23 does 

not apply to outbound telephone calls 

by a Trading Permit Holder or an 

associated person if: 

(1) The Trading Permit Holder has 

received that person’s express prior 

written consent; 

(2) The Trading Permit Holder has an 

established business relationship 24 with 

the person; or 

(3) The person is a broker or dealer. 

This amendment deletes the exception 

related to existing customers and 

replaces it with the exception for 

proposed defined term ‘‘established 

business relationships,’’ the definition 

of which is substantially similar to the 

FTC’s definition of that term.25


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26The proposed rule change also renumbers this 

provision as paragraph (d)(1). 

27See 16 CFR 310.4(b)(1)(iii)(A) and supra note 

17; see also FINRA Rule 3230(a)(2). Additionally, 

this proposed rule change replaces a reference to 

the term ‘‘member’’ with ‘‘Trading Permit Holder,’’ 

which conforms to the term currently used in 

CBOE’s Rules. 

28Trading Permit Holders must honor a person’s 

do-not-call request within a reasonable time from 

the date the request is made, which may not exceed 

30 days from the date of the request. If these 

requests are recorded or maintained by a party other 

than the Trading Permit Holder on whose behalf the 

outbound telephone call is made, the Trading 

Permit Holder on whose behalf the outbound 

telephone call is made will still be liable for any 

failures to honor the do-not-call request. 

29See 47 CFR 64.1200(d); see also FINRA Rule 

3230(d). 

30 15 U.S.C. 7001 et seq. 

31The term ‘‘personal relationship’’ means any 

family member, friend, or acquaintance of the 

person making an outbound telephone call. See 

proposed Rule 9.24(n)(18); see also FINRA Rule 

3230(m)(18). 

32See 16 CFR 310.4(b)(1)(iii)(B); see also FINRA 

Rule 3230(b). 

33See Federal Trade Commission, Telemarketing 

Sales Rule, 68 FR 4580 (Jan. 29, 2003) at 4628; and 

Federal Trade Commission, Telemarketing Sales 

Rule, 60 FR 43842 (Aug. 23, 1995) at 43854. 

34See 16 CFR 310.4(b)(3); see also FINRA Rule 

3230(c). 

35See Federal Trade Commission, Telemarketing 

Sales Rule, 68 FR 4580 (Jan. 29, 2003) at 4628; and 

Federal Trade Commission, Telemarketing Sales 

Rule, 60 FR 43842 (Aug. 23, 1995) at 43855. 

36See also FINRA Rule 3230(e). 

Trading Permit Holder’s Firm-Specific 

Do-Not-Call List 

The proposed rule change amends 

Rule 9.24(d) to provide that each 

Trading Permit Holder must make and 

maintain a centralized list of persons 

who have informed the Trading Permit 

Holder or any of its associated persons 

that they do not wish to receive 

outbound telephone calls.26 The 

proposed rule change replaces the term 

‘‘solicitations’’ with the proposed term 

‘‘outbound telephone calls,’’ the 

definition of which is substantially 

similar to the FTC’s definition of that 

term.27 The proposed rule change also 

deletes the prohibition on making 

outbound telephone calls to persons on 

the Trading Permit Holder’s firmspecific do-not-call list and moves this 

prohibition to proposed Rule 9.24(a)(2), 

as described above. 

Proposed Rule 9.24(d)(2) adopts 

procedures that Trading Permit Holders 

must institute to comply with Rule 

9.24(a) and (b) prior to engaging in 

telemarketing. These procedures must 

meet the following minimum standards: 

(1) Trading Permit Holders must have 

a written policy for maintaining their 

firm-specific do-not-call lists. 

(2) Personnel engaged in any aspect of 

telemarketing must be informed and 

trained in the existence and use of the 

Trading Permit Holder’s firm-specific 

do-not-call list. 

(3) If a Trading Permit Holder receives 

a request from a person not to receive 

calls from that Trading Permit Holder, 

the Trading Permit Holder must record 

the request and place the person’s name, 

if provided, and telephone number on 

its firm-specific do-not-call list at the 

time the request is made.28

(4) Trading Permit Holders or 

associated persons making an outbound 

telephone call must make the caller 

disclosures set forth in Rule 9.24(b). 

(5) In the absence of a specific request 

by the person to the contrary, a person’s 

do-not-call request shall apply to the 

Trading Permit Holder making the call, 

and shall not apply to affiliated entities 

unless the consumer reasonably would 

expect them to be included given the 

identification of the call and the product 

being advertised. 

(6) A Trading Permit Holder making 

outbound telephone calls must maintain 

a record of a person’s request not to 

receive further calls. 

Inclusion of this requirement to adopt 

these procedures will not create any 

new obligations on Trading Permit 

Holders, as they are already subject to 

identical provisions under FCC 

telemarketing regulations.29

Do-Not-Call Safe Harbors 

Proposed Rule 9.24(e) provides for 

certain exceptions to the telemarketing 

restriction set forth in proposed Rule 

9.24(a)(3), which prohibits outbound 

telephone calls to persons on the FTC’s 

national do-not-call registry. 

First, proposed Rule 9.24(e)(1) 

provides that a Trading Permit Holder 

or associated person making outbound 

telephone calls will not be liable for 

violating proposed Rule 9.24(a)(3) if: 

(1) The Trading Permit Holder has an 

established business relationship with 

the called person; however, a person’s 

request to be placed on the Trading 

Permit Holder’s firm-specific do-not-call 

list terminates the established business 

relationship exception to the national 

do-not-call registry provision for that 

Trading Permit Holder even if the 

person continues to do business with 

the Trading Permit Holder; 

(2) The Trading Permit Holder has 

obtained the person’s prior express 

written consent, which must be clearly 

evidenced by a signed, written 

agreement (which may be obtained 

electronically under the E-Sign Act 30) 

between the person and the Trading 

Permit Holder that states that the person 

agrees to be contacted by the Trading 

Permit Holder and includes the 

telephone number to which the calls 

may be placed; or 

(3) The Trading Permit Holder or 

associated person making the call has a 

personal relationship 31 with the called 

person. 

The proposed rule change is 

substantially similar to the FTC’s 

provision regarding an exception to the 

prohibition on making outbound 

telephone calls to persons on the FTC’s 

do-not-call registry.32 The FTC provided 

a discussion of the provision when it 

was adopted pursuant to the Prevention 

Act.33

Second, proposed Rule 9.24(e)(2) 

provides that a Trading Permit Holder 

or associated person making outbound 

telephone calls will not be liable for 

violating proposed Rule 9.24(a)(3) if the 

Trading Permit Holder or associated 

person demonstrates that the violation 

is the result of an error and that as part 

of the Trading Permit Holder’s routine 

business practice: 

(1) The Trading Permit Holder has 

established and implemented written 

procedures to comply with Rule 9.24(a) 

and (b); 

(2) The Trading Permit Holder has 

trained its personnel, and any entity 

assisting in its compliance, in the 

procedures established pursuant to the 

preceding clause; 

(3) The Trading Permit Holder has 

maintained and recorded a list of 

telephone numbers that it may not 

contact in compliance with Rule 

9.24(d); and 

(4) The Trading Permit Holder uses a 

process to prevent outbound telephone 

calls to any telephone number on the 

Trading Permit Holder’s firm-specific 

do-not-call list or the national do-notcall registry, employing a version of the 

national do-not-call registry obtained 

from the FTC no more than 31 days 

prior to the date any call is made, and 

maintains records documenting this 

process. 

The proposed rule change is 

substantially similar to the FTC’s safe 

harbor to the prohibition on making 

outbound telephone calls to persons on 

the FTC’s national do-not-call registry.34

The FTC provided a discussion of the 

provision when it was adopted pursuant 

to the Prevention Act.35

Wireless Communications 

Proposed Rule 9.24(f) clarifies that the 

provisions set forth in Rule 9.24 are 

applicable to Trading Permit Holders 

and associated persons making 

outbound telephone calls to wireless 

telephone numbers.36


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37See also FINRA Rule 3230(f). 

38The term ‘‘billing information’’ means any data 

that enables any person to access a customer’s or 

donor’s account, such as a credit or debit card 

number, a brokerage, checking, or savings account 

number, or a mortgage loan account number. See 

proposed Rule 9.24(n)(3). 

39The term ‘‘preacquired account information’’ 

means any information that enables a Trading 

Permit Holder or associated person to cause a 

charge to be placed against a customer’s or donor’s 

account without obtaining the account number 

directly from the customer or donor during the 

telemarketing transaction pursuant to which the 

account will be charged. See proposed Rule 

9.24(n)(19). 

40The term ‘‘free-to-pay conversion’’ means, in an 

offer or agreement to sell or provide any goods or 

services, a provision under which a customer 

receives a product or service for free for an initial 

period and will incur an obligation to pay for the 

product or service if he or she does not take 

affirmative action to cancel before the end of that 

period. See proposed Rule 9.24(n)(13). 

41See 16 CFR 310.4(a)(7); see also FINRA Rule 

3230(i). 

42See Federal Trade Commission, Telemarketing 

Sales Rule, 68 FR 4580 (Jan. 29, 2003) at 4616. 

43Caller identification information includes the 

telephone number and, when made available by the 

Trading Permit Holder’s telephone carrier, the name 

of the Trading Permit Holder. 

44See 16 CFR 310.4(a)(8); see also FINRA Rule 

3230(g). 

45See 47 CFR 64.1601(e). 

46See 16 CFR 310.4(a)(6); see also FINRA Rule 

3230(h). 

47See Federal Trade Commission, Telemarketing 

Sales Rule, 68 FR 4580 (Jan. 29, 2003) at 4615. 

48See id. at 4616. 

49An outbound telephone call is ‘‘abandoned’’ if 

the called person answers it and the call is not 

connected to a Trading Permit Holder or associated 

person within two seconds of the called person’s 

completed greeting. 

50See 16 CFR 310.4(b)(1)(iv) and (b)(4); see also 

FINRA Rule 3230(j). 

51See Federal Trade Commission, Telemarketing 

Sales Rule, 68 FR 4580 (Jan. 29, 2003) at 4641. 

52The express written agreement must: (a) Have 

been obtained only after a clear and conspicuous 

disclosure that the purpose of the agreement is to 

authorize the Trading Permit Holder to place 

prerecorded calls to such person; (b) have been 

obtained without requiring, directly or indirectly, 

that the agreement be executed as a condition of 

purchasing any good or service; (c) evidence the 

Continued 

Outsourcing Telemarketing 

Proposed Rule 9.24(g) states that if a 

Trading Permit Holder uses another 

entity to perform telemarketing services 

on its behalf, the Trading Permit Holder 

remains responsible for ensuring 

compliance with Rule 9.24. The 

proposed rule change also provides that 

an entity or person to which a Trading 

Permit Holder outsources its 

telemarketing services must be 

appropriately registered or licensed, 

where required.37

Billing Information 

The proposed rule change reletters 

Rule 9.24(e) as Rule 9.24(h) and 

provides that, for any telemarketing 

transaction, no Trading Permit Holder 

or associated person may submit billing 

information 38 for payment without the 

express informed consent of the 

customer. Proposed Rule 9.24(h) 

requires that each Trading Permit 

Holder or associated person must obtain 

the express informed consent of the 

person to be charged and to be charged 

using the identified account. 

If the telemarketing transaction 

involves preacquired account 

information 39 and a free-to-pay 

conversion 40 feature, the Trading 

Permit Holder or associated person 

must: 

(1) Obtain from the customer, at a 

minimum, the last four digits of the 

account number to be charged; 

(2) Obtain from the customer an 

express agreement to be charged and to 

be charged using the identified account 

number; and 

(3) Make and maintain an audio 

recording of the entire telemarketing 

transaction. 

For any other telemarketing 

transaction involving preacquired 

account information, the Trading Permit 

Holder or associated person must: 

(1) Identify the account to be charged 

with sufficient specificity for the 

customer to understand what account 

will be charged; and 

(2) Obtain from the customer an 

express agreement to be charged and to 

be charged using the identified account 

number. 

The proposed rule change is 

substantially similar to the FTC’s 

provision regarding the submission of 

billing information.41 The FTC provided 

a discussion of the provision when it 

was adopted pursuant to the Prevention 

Act.42

Caller Identification Information 

Proposed Rule 9.24(i) provides that 

Trading Permit Holders that engage in 

telemarketing must transmit caller 

identification information 43 and are 

explicitly prohibited from blocking 

caller identification information. The 

telephone number provided must 

permit any person to make a do-not-call 

request during normal business hours. 

These provisions are similar to the 

caller identification provision in the 

FTC rules.44 Inclusion of these caller 

identification provisions in this 

proposed rule change will not create 

any new obligations on Trading Permit 

Holders, as they are already subject to 

identical provisions under FCC 

telemarketing regulations.45

Unencrypted Consumer Account 

Numbers 

Proposed Rule 9.24(j) prohibits a 

Trading Permit Holder or associated 

person from disclosing or receiving, for 

consideration, unencrypted consumer 

account numbers for use in 

telemarketing. The proposed rule 

change is substantially similar to the 

FTC’s provision regarding unencrypted 

consumer account numbers.46 The FTC 

provided a discussion of the provision 

when it was adopted pursuant to the 

Prevention Act.47 Additionally, the 

proposed rule change defines 

‘‘unencrypted’’ as not only complete, 

visible account numbers, whether 

provided in lists or singly, but also 

encrypted information with a key to its 

decryption. The proposed definition is 

substantially similar to the view taken 

by the FTC.48

Abandoned Calls 

Proposed Rule 9.24(k) prohibits a 

Trading Permit Holder or associated 

person from abandoning 49 any 

outbound telephone call. The 

abandoned calls prohibition is subject to 

a ‘‘safe harbor’’ under proposed Rule 

9.24(k)(2) that requires a Trading Permit 

Holder or associated person: 

(1) To employ technology that ensures 

abandonment of no more than three 

percent of all calls answered by a 

person, measured over the duration of a 

single calling campaign, if less than 30 

days, or separately over each successive 

30-day period or portion thereof that the 

campaign continues; 

(2) For each outbound telephone call 

placed, to allow the telephone to ring 

for at least 15 seconds or four rings 

before disconnecting an unanswered 

call; 

(3) Whenever a Trading Permit Holder 

or associated person is not available to 

speak with the person answering the 

outbound telephone call within two 

seconds after the person’s completed 

greeting, promptly to play a prerecorded 

message stating the name and telephone 

number of the Trading Permit Holder or 

associated person on whose behalf the 

call was placed; and 

(4) To maintain records documenting 

compliance with the ‘‘safe harbor.’’ 

The proposed rule change is 

substantially similar to the FTC’s 

provisions regarding abandoned calls.50

The FTC provided a discussion of the 

provisions when they were adopted 

pursuant to the Prevention Act.51

Prerecorded Messages 

Proposed Rule 9.24(l) prohibits a 

Trading Permit Holder or associated 

person from initiating any outbound 

telephone call that delivers a 

prerecorded message without a person’s 

express written agreement 52 to receive 


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willingness of the called person to receive calls that 

deliver prerecorded messages by or on behalf of the 

Trading Permit Holder; and (d) include the person’s 

telephone number and signature (which may be 

obtained electronically under the E-Sign Act). 

53See 16 CFR 310.4(b)(1)(v); see also FINRA Rule 

3230(k). 

54See Federal Trade Commission, Telemarketing 

Sales Rule, 73 FR 51164 (Aug. 29, 2008) at 51165. 

55The term ‘‘credit card system’’ means any 

method or procedure used to process credit card 

transactions involving credit cards issued or 

licensed by the operator of that system. The term 

‘‘credit card’’ means any card, plate, coupon book, 

or other credit device existing for the purpose of 

obtaining money, property, labor, or services on 

credit. The term ‘‘credit’’ means the right granted 

by a creditor to a debtor to defer payment of debt 

or to incur debt and defer its payment. See 

proposed Rule 9.24(n)(7), (8), and (10). 

56The term ‘‘cardholder’’ means a person to 

whom a credit card is issued or who is authorized 

to use a credit card on behalf of or in addition to 

the person to whom the credit card is issued. See 

proposed Rule 9.24(n)(6). 

57The term ‘‘credit card sales draft’’ means any 

record or evidence of a credit card transaction. See 

proposed Rule 9.24(n)(9). 

58The term ‘‘merchant’’ means a person who is 

authorized under a written contract with an 

acquirer to honor or accept credit cards, or to 

transmit or process for payment credit card 

payments, for the purchase of goods or services or 

a charitable contribution. The term ‘‘acquirer’’ 

means a business organization, financial institution, 

or an agent of a business organization or financial 

institution that has authority from an organization 

that operates or licenses a credit card system to 

authorize merchants to accept, transmit, or process 

payment by credit card through the credit card 

system for money, goods or services, or anything 

else of value. See proposed Rule 9.24(n)(2) and (14). 

59The term ‘‘merchant agreement’’ means a 

written contract between a merchant and an 

acquirer to honor or accept credit cards, or to 

transmit or process for payment credit card 

payments, for the purchase of goods or services or 

a charitable contribution. See proposed Rule 

9.24(n)(15). 

60See 16 CFR 310.3(c); see also FINRA Rule 

3230(l). 

61See Federal Trade Commission, Telemarketing 

Sales Rule, 60 FR 43842 (Aug. 23, 1995) at 43852. 

62See proposed Rule 9.24(n)(2), (3), (5), (6), (7), 

(8), (9), (10), (11), (12), (13), (14), (15), (16), (17), 

(19), (20), and (21); and 16 CFR 310.2(a), (c), (d), 

(e), (f), (h), (i), (j), (k), (l), (n), (o), (p), (s), (t), (v), 

(w), (x), (cc), and (dd); see also FINRA Rule 

3230(m)(2), (3), (5), (6), (7), (8), (9), (10), (11), (12), 

(13), (14), (15), (16), (17), (19), and (20). The 

proposed rule change also adopts definitions of 

‘‘account activity,’’ ‘‘broker-dealer of record,’’ and 

‘‘personal relationship’’ that are substantially 

similar to FINRA’s definitions of these terms. See 

proposed Rule 9.24(n)(1), (4), and (18) and FINRA 

Rule 3230(m)(1), (4), and (18); see also 47 CFR 

64.1200(f)(14) (FCC’s definition of ‘‘personal 

relationship’’). 

63See Federal Trade Commission, Telemarketing 

Sales Rule, 60 FR 43842 (Aug. 23, 1995) at 43843; 

and Federal Trade Commission, Telemarketing 

Sales Rule, 68 FR 4580 (Jan. 29, 2003) at 4587. 

64See also FINRA Rule 3230, Supplementary 

Material .01, Compliance with Other Requirements. 

65See 47 U.S.C. 227. 

66See 47 CFR 64.1200. 

67 15 U.S.C. 78f(b). 

such calls. The proposed rule change 

also requires that all prerecorded 

outbound telephone calls provide 

specified opt-out mechanisms so that a 

person can opt out of future calls. The 

prohibition does not apply to a 

prerecorded message permitted for 

compliance with the ‘‘safe harbor’’ for 

abandoned calls under proposed Rule 

9.24(k)(2). The proposed rule change is 

substantially similar to the FTC’s 

provisions regarding prerecorded 

messages.53 The FTC provided a 

discussion of the provisions when they 

were adopted pursuant to the 

Prevention Act.54

Credit Card Laundering 

Proposed Rule 9.24(m) prohibits 

credit card laundering, the practice of 

depositing into the credit card system 55

a sales draft that is not the result of a 

credit card transaction between the 

cardholder 56 and the Trading Permit 

Holder. Except as expressly permitted, 

the proposed rule change prohibits a 

Trading Permit Holder or associated 

person from: 

(1) Presenting to or depositing into the 

credit card system for payment, a credit 

card sales draft 57 generated by a 

telemarketing transaction that is not the 

result of a telemarketing credit card 

transaction between the cardholder and 

the Trading Permit Holder; 

(2) Employing, soliciting, or otherwise 

causing a merchant,58 or an employee, 

representative or agent of the merchant 

to present to or to deposit into the credit 

card system for payment, a credit card 

sales draft generated by a telemarketing 

transaction that is not the result of a 

telemarketing credit card transaction 

between the cardholder and the Trading 

Permit Holder; or 

(3) Obtaining access to the credit card 

system through the use of a business 

relationship or an affiliation with a 

merchant, when such access is not 

authorized by the merchant 

agreement 59 or the applicable credit 

card system. 

The proposed rule change is 

substantially similar to the FTC’s 

provision regarding credit card 

laundering.60 The FTC provided a 

discussion of the provisions when they 

were adopted pursuant to the 

Prevention Act.61

Definitions 

Proposed Rule 9.24(n) adopts the 

following definitions, which are 

substantially similar to the FTC’s 

definitions of these terms: ‘‘Acquirer,’’ 

‘‘billing information,’’ ‘‘caller 

identification service,’’ ‘‘cardholder,’’ 

‘‘charitable contribution,’’ ‘‘credit,’’ 

‘‘credit card,’’ ‘‘credit card sales draft,’’ 

‘‘credit card system,’’ ‘‘customer,’’ 

‘‘donor,’’ ‘‘established business 

relationship,’’ ‘‘free-to-pay conversion,’’ 

‘‘merchant,’’ ‘‘merchant agreement,’’ 

‘‘outbound telephone call,’’ ‘‘person,’’ 

‘‘preacquired account information,’’ 

‘‘telemarketer,’’ and ‘‘telemarketing.’’ 62

The FTC provided a discussion of each 

definition when they were adopted 

pursuant to the Prevention Act.63

State and Federal Laws 

The proposed rule change amends 

Rule 9.24, Interpretation and Policy 

.01 64 to remind Trading Permit Holders 

and associated persons that engage in 

telemarketing that they also are subject 

to the requirements of relevant state and 

federal laws and rules, including the 

Prevention Act, the TCPA,65 and the 

rules of the FCC relating to 

telemarketing practices and the rights of 

telephone consumers.66

Applicability to CBSX 

The proposed rule change also 

amends Appendix A, Applicability of 

Rules of the Exchange, to the CBSX 

Rules to add Rule 9.24 to the list of 

CBOE Rules that apply to CBSX. The 

Introduction to the CBSX Rules 

provides that the trading of non-option 

securities on CBSX are subject to the 

Rules in Chapters 1 through 29 

(including Rule 9.24) of the Exchange 

Rules to the same extent such Rules 

apply to the trading of the products to 

which those Rules apply, in some cases 

supplemented or replaced by the Rules 

in Chapters 50 through 54, except for 

Rules that have been replaced by rules 

in Chapters 50 through 54 and except 

where the context otherwise requires. 

Through this provision, the 

telemarketing restrictions in Rule 9.24 

have always applied to CBSX Trading 

Permit Holders. The proposed rule 

change merely makes the applicability 

of Rule 9.24 to CBSX Trading Permit 

Holders explicit in Appendix A. 

Announcement in Regulatory Circular 

The Exchange will announce the 

implementation date of the proposed 

rule change in a Regulatory Circular to 

be published no later than 90 days 

following the effective date. The 

implementation date will be no later 

than 180 days following the effective 

date. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the Act 

and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.67 Specifically, 


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68 15 U.S.C. 78f(b)(5). 69 15 U.S.C. 78s(b)(3)(A). 70 17 CFR 240.19b–4(f)(6). 

71 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3This proposal refers to ‘‘PHLX XL’’ as the 

Exchange’s automated options trading system. In 

May 2009 the Exchange enhanced the system and 

adopted corresponding rules referring to the system 

as ‘‘Phlx XL II.’’ See Securities Exchange Act 

Release No. 59995 (May 28, 2009), 74 FR 26750 

(June 3, 2009) (SR–Phlx–2009–32). The Exchange 

intends to submit a separate technical proposed 

rule change that would change all references to the 

system from ‘‘Phlx XL II’’ to ‘‘PHLX XL’’ for 

branding purposes. 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 68 requirements that the rules of 

an exchange be designed to promote just 

and equitable principles of trade, to 

prevent fraudulent and manipulative 

acts, to remove impediments to and to 

perfect the mechanism for a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

In particular, the proposed rule 

change will prevent fraudulent and 

manipulative acts and protect investors 

and the public interest by continuing to 

prohibit Trading Permit Holders from 

engaging in deceptive and other abusive 

telemarketing acts or practices. 

Additionally, the proposed rule change 

removes impediments to and perfects 

the mechanism for a free and open 

market and a national market system, 

because it provides consistency among 

telemarketing rules of national 

securities exchanges and FINRA, 

therefore making it easier for investors 

to comply with these rules. The 

proposed rule change to include Rule 

9.24 in the list of Exchange Rules that 

apply to CBSX also protects investors by 

eliminating any potential confusion 

among investors as to whether Rule 9.24 

applies to CBSX Trading Permit 

Holders. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

CBOE does not believe that the 

proposed rule change will impose any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: 

A. Significantly affect the protection 

of investors or the public interest; 

B. Impose any significant burden on 

competition; and 

C. Become operative for 30 days from 

the date on which it was filed, or such 

shorter time as the Commission may 

designate, it has become effective 

pursuant to Section 19(b)(3)(A) 69 of the 

Act and Rule 19b–4(f)(6) 70 thereunder. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rulecomments@sec.gov. Please include File 

Number SR–CBOE–2012–024 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–CBOE–2012–024. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). 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 Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549 on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of such filing 

also will be available for inspection and 

copying at the principal office of the 

Exchange. All comments received will 

be posted without change; the 

Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–CBOE– 

2012–024 and should be submitted on 

or before April 11, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.71

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–6765 Filed 3–20–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66602; File No. SR–Phlx– 

2012–31] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to the 

Acceptable Complex Execution 

(‘‘ACE’’) Parameter Order Protection 

Feature 

March 14, 2012. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 2 thereunder, 

notice is hereby given that on March 8, 

2012, NASDAQ OMX PHLX LLC 

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I and 

II below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange proposes to amend 

Exchange Rule 1080, Commentary .08, 

Complex Orders on Phlx XL, by 

adopting new Rule 1080.08(i), which 

would establish an Acceptable Complex 

Execution Parameter (‘‘ACE 

Parameter’’), a price range outside of 

which a Complex Order (as defined 

below) will not be executed by the 

PHLX XL® automated options trading 

system 3 following a Complex Order 


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