September 19, 1994
TO: COMPLIANCE COMMITTEE NO. 16-94
DIRECT MARKETING COMMITTEE NO. 28-94
SALES FORCE MARKETING COMMITTEE NO. 38-94
SEC RULES MEMBERS NO. 65-94
UNIT INVESTMENT TRUST MEMBERS NO. 37-94
RE: ADOPTION OF FEDERAL TELEMARKETING LEGISLATION
__________________________________________________________
President Clinton has signed into law the "Telemarketing and
Consumer Fraud and Abuse Prevention Act of 1994," which directs the
Federal Trade Commission to prescribe rules prohibiting deceptive
and other abusive telemarketing acts or practices. The Act
specifically exempts from those rules certain entities regulated by
the Securities and Exchange Commission including, among others, any
broker, dealer, investment company or investment adviser (as those
terms are defined in the federal securities laws). It provides,
however, that within six months after the effective date of rules
promulgated by the FTC, the SEC must promulgate substantially
similar rules that would apply to the entities it regulates.
The legislation specifies that the SEC need not act if: (1)
existing federal securities laws or rules provide protection from
abusive or other deceptive telemarketing practices substantially
similar to that provided by the FTC's rules; or (2) the SEC
determines that the promulgation of such rules is not necessary or
appropriate in the public interest, or for the protection of
investors, or would be inconsistent with the maintenance of fair
and orderly markets. If the SEC determines that one of the above
exceptions applies, it must publish that determination and the
reasons for it in the Federal Register.
A copy of the legislation is attached.
Frances M. Stadler
Associate Counsel
Attachment