November 24, 2014 admin

Social Media Compliance For Financial Services

In January 2010 FINRA introduced Regulatory Notice 10-06 with the goal to ensure that investors are protected from false or misleading claims and representations, and firms are able to effectively and appropriately supervise participation in these sites. At the same time, FINRA is seeking to interpret its rules in a flexible manner to allow firms to communicate with clients and investors using this new technology.

Given the numerous ways in which information and personal thoughts can now be transmitted across web-based media; particularly via social networking sites such as Facebook, LinkedIn, and Twitter. FINRA Notice 10-06 holds that the use of Internet-based social media communications must be viewed and monitored in the very same way as are written communications and in-person conversations. Therefore, these regulations and suitability requirements also apply to any forms of advertisement, sales literature and correspondence when used in social media situations.

The obligations of a firm to keep records of communications made through social media depend on whether the content of the communication constitutes a business communication. The key to this statement is ensuring that every firm determines what is and isn’t a business communication, as well as implementing measures that require any business communication made by an associated firm member be retained, retrievable and supervised.

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