FINRA and the SEC’s Office of Compliance Inspections and Examinations (OCIE) have issued detailed guidelines in the past year that are open to some interpretation, according to two moderators who spoke about FINRA’s New Communication Rules Web Seminar. But the grey area is getting thin as more firms allow their registered reps and investment advisors to use social media.
When a firm gives the OK to social media, it’s strongly encouraged to add the social media policies and procedures to its code of ethics, according to the two moderators. Firms also are encouraged to train personnel who are using social media.
From FMG’s perspective, the most compelling points of discussion revolved around social posts and attitudes toward blogging.
To control content, many firms continue to allow only one-way posting of social material. More firms are considering static blogs, which should be treated as retail communication and must be preapproved by a registered principal.
FMG’s methodology of pushing FINRA-reviewed content to social sites on behalf of financial professionals falls within the guidelines issued by both FINRA and OCIE. In addition, FMG’s approach of allowing visitors to click an embedded link that takes them to a financial professional’s website also falls within established guidelines – if the website has been approved by a registered principal.
The moderators spent the final part of the webinar reminding attendees that the recordkeeping requirement for social media is the same as the rules that govern hard copy or electronic communications. Firms must consider a wide range of factors with social monitoring, including whether social sites have private sections, the frequency of monitoring, and whether the monitoring tool detects if material has been deleted from social sites.
The moderators also reminded attendees that “like” buttons are often considered testimonials and should be approached with caution.
Overall, the 60-minute webinar provided terrific insight into FINRA’s new communication rules, which fully go into effect on February 13, 2013. FINRA’s effort, which has been rolled out over the past three years, was designed to simplify and clarify the rules for both the retail and institutional communication.
Craig Faulkner is CEO of FMGSuite, a company dedicated to creating digital marketing tools for today's financial professional. For more ways to make the most of your marketing efforts, check out his free online video course, TheArtofDigitalMarketing. You can also follow him @fmgsuite on Twitter.