FINRA Notice 11-39 Highlights - Social Media Usage Regulations

http://ow.ly/68EI5

Article by Chad Bockius on socialware blog.

Earlier in the month FINRA submitted proposed changes to NASD 2210 to simplify the guidelines around communications with the public.  The article touches on FINRA's regulations and advisory comments regarding the use of social media. 


As the author points out, with respect to use of social media, "It is clear from 10-06, this notice and 2210 that aspects of the site, like profiles, must be approved by a registered principal prior to use. Much has been made of the notion of having to pre-review the first post on a rep’s social media site. While FINRA mentions that some firms require this, it does not say that it is required – an important distinction. If you are a firm taking this approach, remember you can always provide a handful of pre-approved first posts to the field to get started."


In addition, the author further goes on to state, "FINRA goes on to reinforce this point by saying “unscripted participation in an interactive electronic forum comes within the definition of public appearance.” And remember public appearances DO NOT require prior approval by a registered principal."


Of great interest is the following:  "FINRA points out that firms can choose to treat all content created on these devices as business communications. However, another approach is to flag content as personal vs business such that firms have flexibility in how they supervise the material. In this scenario firms would have the ability to supervise 100% of the business-related social media communications while only conducting spot audits on the personal information."


As far as messages and electronic information that auto-deletes, "This type of technology typically applies for SMS (i.e., text messages). Regardless of if a solution exists to automatically delete content, if it is related to “business as such” it still must be retained (emphasis added) and supervised."