What does SOB stand for?

The 2007 Statement of Basis and Purpose, which was issued by the FTC and provides useful commentary on the underlying rationale for the disclosure obligations contained in the new franchise rule, explains that the meaning of "material" is to be governed by the FTC's past policies and interpretations when considering whether an act or omission is deceptive.

Additionally, in the Statement of Basis and Purpose (SBP) accompanying the final Rule, the Commission explains its determination not to expand the definition of a "transactional or relationship message," or reduce the 10-business-day period for processing recipients' opt-out requests.

It also includes full text of the FTC's Statement of Basis and Purpose.

According to the Rule's Statement of Basis and Purpose, a web site operator possesses "actual knowledge" if it "learns of a child's age or grade from the child's registration or a concerned parent.

5 The Statement of Basis and Purpose and subsequent interpretive lore explain this limitation as precluding the investor from (1) nominating a candidate for the board of directors of the issuer, (2) proposing corporate action that requires shareholder approval, (3) soliciting any proxies, (4) having a controlling shareholder, officer, director or employee that simultaneously serves as an officer or director of the issuer,6 (5) being a competitor of the issuer, or (6) doing any of the above with respect to a parent or affiliate of the issuer.