Financial Services & Social Media
Review of FINRA Regulations and a Suggested Framework for Providing Guidance to Member Firms
FREE 40-page white paper
The Financial Industry Regulatory Association (FINRA) has – since 2003 – been providing intermittent guidance on the use of social media for its more than 4,700 member firms. In September 2009, they set up a Social Networking Task Force to try and develop more comprehensive regulations. However, they have yet to provide enough guidance for many financial services companies to feel comfortable using social media as a means of marketing to prospects and communicating with existing clients.
This 40-page white paper provides an overview of:
- the rulings – to date – from FINRA that relate to social media,
- the input submitted to FINRA by several member firms on issues regarding the social media
and organizes that information into three categories:
- Interactive Electronic Communications
- Third-party Content
- Supervision of Employees’ Use of Social Media
This paper also provides an overview of all social media and related interactive venues, including detailed descriptions of all these categories.
It offers a way to assess each of these categories along key criteria to determine if it qualifies as Interactive Electronic Communications, plus addresses the phenomenon of Content Sharing so common in the social media.
It also provides thoughts on what venues should fall under the categories of Virtual Appearances and what technology should be added to the category of Electronic Correspondence.
Finally, it addresses the differences between social media programs that are managed and implemented by a small social media or marketing group within a financial services company and what guidance and safeguards need to be in place for registered reps’ use of the social media.
This paper is a must-read for any financial services firm who has a social media plan or would like to put a social media plan in place. It provides ideas and raises important issues for both marketing departments and for compliance officers.
Written by Catherine Sherwood who has 15+ year experience as a marketing executive at financial services companies such as Thomson Financial and Knight-Ridder Financial, and is a certified social media consultant, this white paper is the one document that brings together the perspectives of FINRA, its member firms and knowledgeable social media practitioners.
“Financial Services & Social Media” provides a thoughtful framework for how regulators can create guidelines that go beyond just retrofitting old rules to this new interactive environment and allow the financial services industry to safely get involved in social media.
