16290 Federal Register / Vol. 77, No. 54 / Tuesday, March 20, 2012 / Notices 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 

13 17 CFR 240.19b–4(f)(6)(iii). 

14For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule change’s impact on efficiency, 

competition, and capital formation. 15 U.S.C. 78c(f). 

15 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–2011–59) (approval order of proposed 

rule change to adopt telemarketing rule). The 

proposed rule change amends the name of Rule 626 

from Telephone Solicitation to Telemarketing. 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

Specifically, the Exchange believes that 

eliminating the 100MB connectivity 

service option will not burden 

competition since the 100MB 

connectivity option is not routinely 

offered by other exchanges. In fact, 

requiring the Exchange to continue to 

offer this option would unfairly burden 

competition by requiring it to incur 

costs that are not typically incurred by 

any of its competitors. 

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 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days after the date of 

the filing, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 11 and Rule 19b– 

4(f)(6) 12 thereunder. 

The Exchange has asked that the 

Commission waive the 30-day preoperative waiting period contained in 

Rule 19b–4(f)(6)(iii).13 The Exchange 

represents that investors and the public 

interest are best served by waiving the 

pre-operative delay to minimize 

potential risks of market disruption 

associated with the use of lower 

bandwidth at a time of increasing data 

traffic. For these reasons, the 

Commission believes it is consistent 

with the protection of investors and the 

public interest to waive the 30-day 

operative delay, and hereby grants such 

waiver.14

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. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

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–BX–2012–018 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–BX–2012–018. 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 the 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–BX– 

2012–018 and should be submitted on 

or before April 10, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–6617 Filed 3–19–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66595; File No. SR–ISE– 

2012–11] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change Relating to Telemarketing 

Rules 

March 14, 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 February 

28, 2012, the International Securities 

Exchange, LLC (the ‘‘Exchange’’ or the 

‘‘ISE’’) filed with the Securities and 

Exchange Commission (‘‘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 ISE 

Rule 626 (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 at 

http://www.ise.com, at the principal 


srobinson on DSK4SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 54 / Tuesday, March 20, 2012 / Notices 16291 

4 15 U.S.C. 6101–6108. 

5 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). 

6 15 U.S.C. 6102. 

7See 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. 

8See, 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 

establishing requirements for sellers and 

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

9See supra note 6. 

10See Letter from Robert W. Cook, Director, 

Division of Trading and Markets, Securities and 

Exchange Commission, to Gary Katz, President and 

Chief Executive Officer of International Securities 

Exchange, LLC (May 12, 2011). 

11 Id. 

12The proposed rule change is also substantially 

similar to FINRA Rule 3230. See supra note 3. 

13An ‘‘associated person’’ or ‘‘person associated 

with a Member’’ means any partner, officer, 

director, or branch manager of a Member (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 Member, or any employee of a 

Member. See Rule 100(a)(3). 

14An ‘‘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. See 

proposed Rule 626(n)(l1), (16), (17), (20), and (21); 

see also FINRA Rule 3230(m)(1l), (14), (16), (17), 

and (20); and 16 CFR 310.2(f), (1), (n), (v), (w), (cc), 

and (dd). 

15This restriction was previously included under 

Rule 626(e). See the discussion below under 

Member’s Firm-Specific Do-Not-Call List. 

16See 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 626(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 626(n)(16) and (21) and 

supra note 14. 

17See 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. 

office of the Exchange, 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 

Statutory Basis for, the Proposed Rule 

Change 

(a) Purpose—The Exchange proposes 

to amend Rule 626 (Telephone 

Solicitation), to revise and add 

provisions that are substantially similar 

to FTC rules that prohibit deceptive and 

other abusive telemarketing acts or 

practices. Rule 626 requires Members to, 

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

solicitation, and not use deceptive and 

abusive acts and practices in connection 

with telemarketing. The Commission 

directed ISE to enact these 

telemarketing rules in accordance with 

the Telemarketing Consumer Fraud and 

Abuse Prevention Act of 1994 

(‘‘Prevention Act’’).4 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 5

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.6

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.7 Since 1997, 

the FTC has amended its telemarketing 

rules in light of changing telemarketing 

practices and technology.8

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.9

In May 2011, Commission staff directed 

ISE 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.10 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.’’ 11

The proposed rule change, as directed 

by the Commission staff, amends and 

adopts provisions in Rule 626 that are 

substantially similar to the FTC’s 

current rules that prohibit deceptive and 

other abusive telemarketing acts or 

practices as described below.12

Telemarketing Restrictions 

The proposed rule change amends the 

telemarketing restrictions in Rule 626(a) 

to provide that no Member or associated 

person 13 may make an outbound 

telephone call 14 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 Member 15; 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.16 The 

FTC provided a discussion of the 

provision when it was adopted pursuant 

to the Prevention Act.17

Caller Disclosures 

The proposed rule change amends 

Rule 626(b) to delete the phrase ‘‘for the 

purpose of telemarketing,’’ which 

concept is included in the proposed 

definition of ‘‘outbound telephone 


srobinson on DSK4SPTVN1PROD with NOTICES
16292 Federal Register / Vol. 77, No. 54 / Tuesday, March 20, 2012 / Notices 

18See proposed Rule 626(n)(16) and supra note 

14. 

19See proposed Rule 626(b); see also FINRA Rule 

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

substantially similar to the FCC regulations 

regarding call disclosures. See 47 CFR 

64.1200(d)(4). 

20The proposed rule change amends Rule 626(a) 

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 Member satisfies 

the exception in paragraph (a), the Member 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. 

21An ‘‘established business relationship’’ is a 

relationship between a Member and a person if (i) 

the person has made a financial transaction or has 

a security position, a money balance, or account 

activity with the Member or at a clearing firm that 

provides clearing services to the Member within the 

18 months immediately preceding the date of an 

outbound telephone call; (b) the Member 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 Member to inquire about 

a product or service offered by the Member within 

the three months immediately preceding the date of 

an outbound telephone call. A person’s established 

business relationship with a Member does not 

extend to the Member’s affiliated entities unless the 

person would reasonably expect them to be 

included. Similar, a person’s established business 

relationship with a Member’s affiliate does not 

extend to the Member unless the person would 

reasonably expect the Member 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 Member. 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 626(n)(1), (4), and (12); see also 16 

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

(12). 

22See id.; see also FINRA Rule 3230(a). 

23See 16 CFR 310.4(b)(1)(iii)(A) and supra note 

14; see also FINRA Rule 3230(a)(2). 

24Members 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 

Member on whose behalf the outbound telephone 

call is made, the Member on whose behalf the 

outbound telephone call is made will still be liable 

for any failures to honor the do-not-call request. 

25See 47 CFR 64.1200(d); see also FINRA Rule 

3230(d). 

26 15 U.S.C. 7001 et seq. 

27The term ‘‘personal relationship’’ means any 

family member, friend, or acquaintance of the 

person making an outbound telephone call. See 

proposed Rule 626(n)(18); see also FINRA Rule 

3230(m)(18). 

28See 16 CFR 3l0.4(b)(1)(iii)(B); see also FINRA 

Rule 3230(b). 

29See 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. 

call.’’ 18 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.19

Exceptions 

The proposed rule change amends 

Rule 626(a) to provide that the 

prohibition in paragraph (a)(1) 20 does 

not apply to outbound telephone calls 

by a Member or an associated person if: 

(1) The Member has received that 

person’s express prior written consent; 

(2) The Member has an established 

business relationship 21 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.22

Member’s Firm-Specific Do-Not-Call 

List 

The proposed rule change reletters 

Rule 626(e) as 626(c) and provides that, 

each Member must make and maintain 

a centralized list of persons who have 

informed the Member or any of its 

associated persons that they do not wish 

to receive outbound telephone calls. 

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.23 The proposed rule change also 

deletes the prohibition on making 

outbound telephone calls to persons on 

the Member’s firm-specific do-not-call 

list and moves this prohibition to 

proposed Rule 626(a)(2), as described 

above. 

Proposed Rule 626(c) adopts 

procedures that Members must institute 

to comply with Rule 626(a) and (b) prior 

to engaging in telemarketing. These 

procedures must meet the following 

minimum standards: 

(1) Members must have a written 

policy for maintaining their firmspecific do-not-call lists. 

(2) Personnel engaged in any aspect of 

telemarketing must be informed and 

trained in the existence and use of the 

Member’s firm-specific do-not-call list. 

(3) If a Member receives a request 

from a person not to receive calls from 

that Member, the Member 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.24

(4) Members or associated persons 

making an outbound telephone call 

must make the caller disclosures set 

forth in Rule 626(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 

Member making the call, and will 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 Member 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 Members, as they are 

already subject to identical provisions 

under FCC telemarketing regulations.25

Do-Not-Call Safe Harbors 

Proposed Rule 626(d) provides for 

certain exceptions to the telemarketing 

restrictions set forth in proposed Rule 

626(a)(3), which prohibits outbound 

telephone calls to persons on the FTC’s 

national do-not-call registry. 

First, proposed Rule 626(d)(1) 

provides that a Member or associated 

person making outbound telephone 

calls will not be liable for violating 

proposed Rule 626(a)(3) if: 

(1) The Member has an established 

business relationship with the called 

person; however, a person’s request to 

be placed on the Member’s firm-specific 

do-not-call list terminates the 

established business relationship 

exception to the national do-not-call 

registry provision for that Member even 

if the person continues to do business 

with the Member; 

(2) The Member 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 ESign Act 26) between the person and the 

Member that states that the person 

agrees to be contacted by the Member 

and includes the telephone number to 

which the calls may be placed; or 

(3) The Member or associated person 

making the call has a personal 

relationship 27 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.28 The FTC 

provided a discussion of the provision 

when it was adopted pursuant to the 

Prevention Act.29

Second, proposed Rule 626(d)(2) 

provides that a Member or associated 


srobinson on DSK4SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 54 / Tuesday, March 20, 2012 / Notices 16293 

30See 16 CFR 310.4(b)(1)(iii)(B); see also FINRA 

Rule 3230(c). 

31See 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. 

32See also FINRA Rule 3230(e). 

33See also FINRA Rule 3230(f). 

34The 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 626(n)(3). 

35The term ‘‘preacquired account information’’ 

means any information that enables a Member 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 626(n)(19). 

36The 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 626(n)(13). 

37See 16 CFR 310.4(a)(7); see also FINRA Rule 

3230(i). 

38See Federal Trade Commission, Telemarketing 

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

39Caller identification information includes the 

telephone number and, when made available by the 

Member’s telephone carrier, the name of the 

Member. 40See 16 CFR 310.4(a)(8); see also FINRA Rule 

3230(g). 

41See 47 CFR 64.1601 (e). 

42See 16 CFR 310.4(a)(6); see also FINRA Rule 

3230(h). 

43See Federal Trade Commission, Telemarketing 

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

44See id. at 4616. 

45An outbound telephone call is ‘‘abandoned’’ if 

the called person answers it and the call is not 

connected to a Member or associated person within 

two seconds of the called person’s completed 

greeting. 

person making outbound telephone 

calls will not be liable for violating 

proposed Rule 626(a)(3) if the Member 

or associated person demonstrates that 

the violation is the result of an error and 

that as part of the Member’s routine 

business practice: 

(l) The Member has established and 

implemented written procedures to 

comply with Rule 626(a) and (b); 

(2) The Member has trained its 

personnel, and any entity assisting in its 

compliance, in the procedures 

established pursuant to the preceding 

clause; 

(3) The Member has maintained and 

recorded a list of telephone numbers 

that it may not contact in compliance 

with Rule 626(c); and 

(4) The Member uses a process to 

prevent outbound telephone calls to any 

telephone number on the Member’s 

firm-specific do-not-call list or the 

national do-not-call 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.30

The FTC provided a discussion of the 

provision when it was adopted pursuant 

to the Prevention Act.31

Wireless Communications 

Proposed Rule 626(e) clarifies that the 

provisions set forth in Rule 626 are 

applicable to Members and associated 

persons making outbound telephone 

calls to wireless telephone numbers.32

Outsourcing Telemarketing 

Proposed Rule 626(f) states that if a 

Member uses another entity to perform 

telemarketing services on its behalf, the 

Member remains responsible for 

ensuring compliance with Rule 626. The 

proposed rule change also provides that 

an entity or person to which a Member 

outsources its telemarketing services 

must be appropriately registered or 

licensed, where required.33

Billing Information 

The proposed rule change reletters 

Rule 626(f) as Rule 626(g) and provides 

that, for any telemarketing transaction, 

no Member or associated person may 

submit billing information 34 for 

payment without the express informed 

consent of the customer. Proposed Rule 

626(g) requires that each Member 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 35 and a free-to-pay 

conversion 36 feature, the Member 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 Member 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.37 The FTC provided 

a discussion of the provision when it 

was adopted pursuant to the Prevention 

Act.38

Caller Identification Information 

Proposed Rule 626(h) provides that 

Members that engage in telemarketing 

must transmit caller identification 

information 39 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.40 Inclusion of these caller 

identification provisions in this 

proposed rule change will not create 

any new obligations on Members, as 

they are already subject to identical 

provisions under FCC telemarketing 

regulations.41

Unencrypted Consumer Account 

Numbers 

Proposed Rule 626(i) prohibits a 

Member 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.42 The FTC 

provided a discussion of the provision 

when it was adopted pursuant to the 

Prevention Act.43 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.44

Abandoned Calls 

Proposed Rule 626(j) prohibits a 

Member or associated person from 

abandoning 45any outbound telephone 

call. The abandoned calls prohibition is 

subject to a ‘‘safe harbor’’ under 

proposed Rule 626(j)(2) that requires a 

Member 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 


srobinson on DSK4SPTVN1PROD with NOTICES
16294 Federal Register / Vol. 77, No. 54 / Tuesday, March 20, 2012 / Notices 

46See 16 CFR 310.4(b)(1)(iv) and (b)(4); see also 

FINRA Rule 3230(j). 

47See Federal Trade Commission, Telemarketing 

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

48The 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 Member 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 willingness of the called 

person to receive calls that deliver prerecorded 

messages by or on behalf of the Member; and (d) 

include the person’s telephone number and 

signature (which may be obtained electronically 

under the E–Sign Act). 

49See 16 CFR 310.4(b)(1)(v); see also FINRA Rule 

3230(k). 

50See Federal Trade Commission, Telemarketing 

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

51The 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 626(n)(7), (8), and (10). 

52The 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 626(n)(6). 

53The term ‘‘credit card sales draft’’ means any 

record or evidence of a credit card transaction. See 

proposed Rule 626(n)(9). 

54The term ‘‘merchant’’ means a person who is 

authorized under 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. 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 626(n)(2) and (14). 

55The 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 

charitable contribution. See proposed Rule 

626(n)(15). 

56See 16 CFR 3 10.3(c); see also FINRA Rule 

3230(1). 

57See Federal Trade Commission, Telemarketing 

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

58See proposed Rule 626(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 626(n)(1), (4), (14) and (18) and 

FINRA Rule 3230(m)(1), (4), (14) and (18); see also 

47 CFR 64.1200(t)(14) (FCC’s definition of 

‘‘personal relationship’’). 

59See 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. 

60See also FINRA Rule 3230, Supplementary 

Material .01, Compliance with Other Requirements. 

61See 47 U.S.C. 227. 

62See 47 CFR 64.1200. 

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 Member 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 Member 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.46 The FTC 

provided a discussion of the provisions 

when they were adopted pursuant to the 

Prevention Act.47

Prerecorded Messages 

Proposed Rule 626(k) prohibits a 

Member or associated person from 

initiating any outbound telephone call 

that delivers a prerecorded message 

without a person’s express written 

agreement 48 to receive 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 626(j)(2). The proposed 

rule change is substantially similar to 

the FTC’s provisions regarding 

prerecorded messages.49 The FTC 

provided a discussion of the provisions 

when they were adopted pursuant to the 

Prevention Act.50

Credit Card Laundering 

Proposed Rule 626(m) prohibits credit 

card laundering, the practice of 

depositing into the credit card system 51

a sales draft that is not the result of a 

credit card transaction between the 

cardholder 52 and the Member. Except as 

expressly permitted, the proposed rule 

change prohibits a Member or 

associated person from: 

(1) Presenting to or depositing into the 

credit card system for payment, a credit 

card sales draft 53 generated by a 

telemarketing transaction that is not the 

result of a telemarketing credit card 

transaction between the cardholder and 

the Member; 

(2) Employing, soliciting, or otherwise 

causing a merchant,54 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 

Member; 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 55 or the applicable credit 

card system. 

The proposed rule change is 

substantially similar to the FTC’s 

provision regarding credit card 

laundering.56 The FTC provided a 

discussion of the provisions when they 

were adopted pursuant to the 

Prevention Act.57

Definitions 

Proposed Rule 626(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.58’’ 

The FTC provided a discussion of each 

definition when they were adopted 

pursuant to the Prevention Act.59

State and Federal Laws 

The proposed rule change amends 

Rule 626, Interpretation and Policy 

.01 60 to remind Members 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,61 and the 

rules of the FCC relating to 

telemarketing practices and the rights of 

telephone consumers.62

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 


srobinson on DSK4SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 54 / Tuesday, March 20, 2012 / Notices 16295 

63 15 U.S.C. 78f(b). 

64 15 U.S.C. 78f(b)(5). 

65 15 U.S.C. 78s(b)(3)(A). 

66 17 CFR 240.19b–4(f)(6). 

67 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

than 180 days following the effective 

date. 

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.63 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 64 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 Members 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. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

ISE 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 significantly affect the 

protection of investors or the public 

interest, does not impose any significant 

burden on competition, and, by its 

terms, does not 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) 65 of the Act and Rule 19b– 

4(f)(6) 66 thereunder. The Exchange 

provided the Commission with written 

notice of its intent to file the proposed 

rule change, along with a brief 

description and text of the proposed 

rule change, at least five business days 

prior to the date of filing the proposed 

rule change. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission 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 the proposed rule change, 

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 

No. SR–ISE–2012–11 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–ISE–2012–11. 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 

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–ISE–2012–11 and should be 

submitted on or before April 10, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.67

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–6619 Filed 3–19–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66597; File No. SR–ISE– 

2012–17] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change To Amend Certain Transaction 

Fees 

March 14, 2012. 

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

Securities Exchange Act of 1934 (the 

‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on March 1, 2012, the International 

Securities Exchange, LLC (the 

‘‘Exchange’’ or the ‘‘ISE’’) filed with the 

Securities and Exchange Commission 

(the ‘‘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 Substance of 

the Proposed Rule Change 

The ISE is proposing to amend certain 

transaction fees. The text of the 

proposed rule change is available on the 

Exchange’s Web site (http:// 

www.ise.com), at the principal office of 

the Exchange, and at the Commission’s 

Public Reference Room. 


srobinson on DSK4SPTVN1PROD with NOTICES