Unit 27 Communications with the Public

Requirements of the TCPA of 1991

- have written policies and procedures for the National Do Not Call Registry. - record the names and numbers of those who request to be put on the National Do Not Call Registry. - train representative on use of the National Do Not Call Registry.

All of the following are true regarding customer account statements except

Any activity in an account—transactions, dividends and interest, stock splits or dividends—will trigger the requirement to send a monthly statement. In addition, in any month an account contains penny stocks, a statement is required to be sent. If there is no activity, statements are only required quarterly. All statements sent require notice that inaccurate information be reported promptly.

All of the following are exempt from the do-not-call provisions of the Telephone Consumer Protection Act (TPCA) except

Call made to make the customer aware of new products that are available to the customer are solicitation calls and are what this act is all about. The others are specifically exempted from the act.

communication with the public

FINRA has three classifications of communication with the public. Correspondence is communication to 25 or fewer retail investors in a 30-day period. Retail communications is to more than 25 retail investors in a 30-day period. Institutional communication is going to banks, insurance companies, mutual funds, et cetera.

An individual is solicited with a cold call made by a registered representative. He tells the representative he is not interested in this investment or in making any future investments. Which of the following actions is required by the Telephone Consumer Protection Act of 1991 (TCPA)?

First the prospect's name must be placed on the firm's do-not-call list, and then no one at the firm may call.

There are two types of do not call list. What are they and how long do names stay on the list?

For both the broker-dealer list and the national Do-Not-Call list, names are not to be called unless the customers request that their name be removed from the list. There was a prior law that only required the broker-dealer list to hold names for five years, but that has changed and names remain on the list indefinitely.

Financial Industry Regulatory Authority (FINRA) and the other self-regulatory organization (SRO)s place extreme importance on knowing your customer. That involves knowing both financial and non- financial considerations. All of the following are nonfinancial considerations except

Nonfinancial considerations are those for which there is no monetary relationship. Clearly, the client's salary is one of the most important of the financial considerations.

Broker/dealers who reserve the right to disclose nonpublic private information about their customers to unaffiliated third parties must

Regulation S-P requires that if a broker/dealer reserves the right to disclose nonpublic personal information to third nonaffiliated parties, it must notify the customer at the time of the account opening and annually thereafter. Means to opt out of the disclosures must be reasonable and easy. Requiring a written request to opt out would not be considered reasonable means under the regulation.

In an effort to safeguard customer information which regulation specifies securing desktop and laptop computers and encrypting email?

Safeguard requirements such as securing desktop and laptop computers and encrypting email to protect customer information is an obligation of financial institutions under Regulation S-P.

S-P Personal Info

The Securities and Exchange Commission (SEC) in Regulation S-P notes examples of nonpublic personal information to include a customer's Social Security number, account balances, transaction history, and any information collected through an internet cookie. A home address would not be considered nonpublic personal informatio

All of the following are provisions of Regulation S-P except

The firm is required to give the opportunity to opt out annually, not semiannually; the firm must give the customer the opportunity to opt out at the opening of the account; the firm must initially when opening the account and annually thereafter provide the customer with a privacy notice; the firm has an obligation to protect the privacy of customer information

NOT required by the Telephone Consumer Protection Act of 1991

There is no requirement to call customers in advance to ask if they want to be on the National Do Not Call Registry; the other options are required.

Anyone making call cold calls for the firm must disclose all of the following information except

There is no requirement to disclose the rep's address or phone number. The others are required by the Telephone Consumer Protection Act.

Solicitations may only occur between

These are the times established by the Telephone Consumer Protection Act.

When making unsolicited cold calls to prospects, a registered representative must disclose all of the following to the individual called except

When making cold calls, the caller must disclose his name and the name of the member broker-dealer, the telephone number or address at which the caller may be contacted, and that the purpose of the call is to solicit the purchase of securities. When securities of any issuer are mentioned in such a call, there is no requirement to disclose the address of the issuer.

Under the Telephone Consumer Protection Act of 1991 (TCPA), administered by the Federal Communications Commission (FCC), a telephone solicitation is defined as a telephone call

the TCPA defines a telephone solicitation as any telephone call initiated for the purpose of encouraging the purchase of, or investment in property, goods, or services. This would include products and services offered in the securities industry by broker-dealers.

During a discussion with a customer about a potential investment opportunity involving securities, standing alone, all of the following would likely be permissible except

the registered representative points out only that a tech firm has a brilliant product idea and the CEO has advanced degrees in science. - The CEO may have advanced degrees, and the product idea may be brilliant, but the registered representative has failed to mention that these two things do not guarantee success nor the relevancy of the degree to the product or idea being discussed.