[11672]
February 24, 2000
TO: ADVERTISING COMPLIANCE ADVISORY COMMITTEE No. 7-00
SEC RULES COMMITTEE No. 25-00
RE: ICI LETTER CONCERNING APPLICATION OF NASD RULES TO
"INVERSE HYPERLINKS"
_____________________________________________________________________________
A working group of the Advertising Compliance Advisory Committee was formed recently to
address whether NASD Regulation, Inc. should treat third-party information that is imported into a
member’s Internet site (“inverse hyperlinks”) as hyperlinks for the purposes of the safe harbor from the
content and filing requirements under the NASD advertising rules. The Institute filed the attached letter
with NASDR today to request clarification on this issue.
The Institute’s letter requests that NASDR extend its existing position on the treatment of
hyperlinks to accommodate new developments in linking information on the Internet. Specifically, the
letter recommends that NASDR clarify that, as with the “ongoing hyperlinks” to third-party Internet
sites described in the 1997 Hyperlink Letter, an NASD member will not be responsible under the
NASD’s rules for the content and filing of
third-party information provided to users through an “inverse” or any other type of hyperlink if:
` The third-party information is clearly identified as such;
` Investors are put on notice that the member is not responsible for the content of the
third-party information;
and the conditions in the Hyperlink Letter, set forth below, are also met:
` The third-party information provided through the hyperlink is continuously available
to investors who visit the member’s site;
` The member has no discretion to alter the third-party information;
` Investors have access to the third-party information through the hyperlink whether or
not it contains favorable material about the member;
` The linked information could be updated or changed by the third party and investors
nonetheless would be able to access the third-party information through the
hyperlink; and
` A member may not establish any form of hyperlink to third-party information if the
member knows or has reason to know that the third-party material contains false or
misleading information about the member’s products or services.
Doretha VanSlyke Zornada
Assistant Counsel
Attachment