Section 1 Purpose
This Rule sets forth standards to protect consumers from
misleading and fraudulent marketing practices with respect to the use of
senior-specific certifications and professional designations in the offer,
sale, or purchase of securities or insurance, or in the providing of investment
advice regarding securities or insurance.
Section 2 Authority
This Rule is adopted under the authority of
8 V.S.A. §
15 and 9 V.S.A. § 5605. The commissioner
finds that this Rule is necessary and appropriate in the public interest and
for the protection of senior investors consistent with the purposes intended by
the Senior Investor Protection Act,
8 V.S.A. §
24.
Section 3 Definitions
As used in this Rule:
(1) "Commissioner" means the commissioner of
the Vermont Department of Banking, Insurance, Securities and Health Care
Administration.
(2) "Department"
means the Vermont Department of Banking, Insurance, Securities and Health Care
Administration.
(3) "Rule" means
the administrative rule adopted herein.
Section 4 Applicability
This Rule shall apply to the offer, sale, or purchase of any
securities or insurance, or in the providing of investment advice regarding any
securities or insurance.
Section
5 Prohibited Practices
(a) The
use of a senior-specific certification or designation by any person, directly
or indirectly or through publications or writings, or by issuing or
promulgating analyses or reports relating to securities or insurance that
indicate or imply that the user has special certification or training in
advising senior citizens or retirees, made in such a way as to mislead any
person in connection with the offer, sale, or purchase of securities or
insurance or the provision of advice as to the value of or the advisability of
investing in, purchasing, or selling securities or insurance, shall be a
dishonest and unethical practice in the securities, commodities, investment,
franchise, banking, finance or insurance business under the meaning of
9
V.S.A. §
5412(d)(13),
or an unfair and deceptive act or practice under Title 8, Chapter 129. The
prohibited use includes, but is not limited to:
(1) use of a certification or professional
designation by a person who has not actually earned or is otherwise ineligible
to use such certification or designation;
(2) use of a nonexistent or self-conferred
certification or professional designation;
(3) use of a certification or professional
designation that indicates or implies a level of occupational qualifications
obtained through education, training, or experience that the person using the
certification or professional designation does not have; or
(4) use of a certification or professional
designation that was obtained from a designating or certifying organization
that:
(A) is primarily engaged in the
business of instruction in sales or marketing; or
(B) does not have reasonable standards or
procedures for assuring the competency of its designees or persons certified;
or
(C) does not have reasonable
standards or procedures for monitoring and disciplining its designees or
persons certified for improper or unethical conduct; or
(D) does not have reasonable continuing
education requirements for its designees or persons certified in order to
maintain the designation or certificate.
(b) In determining whether the use of a
professional certification or designation is prohibited, the commissioner may
consider if the certifying or designating organization has been accredited by:
(1) The American National Standards
Institute; or
(2) The National
Commission for Certifying Agencies; or
(3) an organization that is on the United
States Department of Education's list entitled "Accrediting Agencies Recognized
for Title IV Purposes" and the designation or credential issued therefrom does
not primarily apply to sales or marketing.
(c) In determining whether a combination of
words (or an acronym standing for a combination of words) directly or
indirectly indicates or implies that a person has special certification or
training in advising or servicing senior citizens or retirees, factors to be
considered shall include:
(1) use of
"senior," "retirement," "elder," or similar word or words, combined with
"certified," "registered," "chartered," "adviser," "specialist," "consultant,"
"planner," or similar word or words, in the name of the certification or
professional designation; and
(2)
the manner in which those words are combined.
(d) For purposes of this Rule, a
certification or professional designation does not include a job title within
an organization that is licensed or registered by a state or federal financial
services regulatory agency, when that job title:
(1) indicates seniority or standing within
the organization; or
(2) specifies
an individual's area of specialization within the organization.
(e) Nothing in this Rule shall
limit the commissioner's authority to enforce existing provisions of
law.
