Since FINRA first released rules regarding these issues back in 2010, many in the finance industry have raised questions and concerns over their abilities to comply with these rules while keeping up with explosion of social media. Last week, FINRA responded to these concerns by releasing several guidelines clarifying rules surrounding use of social media websites and personal devices for business purposes. For example, some of the guidelines included the following:
- If an individual posts a statement on Twitter on behalf of the firm, that will likely constitute an interactive statement and not require prior approval by a firm’s registered principal. However, if that statement is then posted on a blog, becoming a static statement (and therefore an advertisement), prior approval is necessary.
- Whether a statement is interactive or static, recordkeeping rules still apply. This means that individuals and/or firms may not use social media sites or devices that automatically delete any posts.
- Individuals may respond to third-party business-related posts on their personal social media site without violating FINRA guidelines. However, responses must conform to firms’ individual policies regarding these types of posts.
- As long as firms are able to keep records and supervise activity, individuals may use their own personal devices (e.g. a smart phone or a tablet) to conduct business and access business applications. Something to keep in mind when using a personal device to conduct business: firms are allowed to supervise all communications made on personal devices, including personal communications, if the device is ever used for business purposes.
These are just a sampling of issues the recent FINRA Regulatory Notice addressed. Please click here to review the full notice.