FINRA Opens Door for Social Media with New Rules

http://ow.ly/8FJFc

An article by Tim Walker appearing on the socialware blog site.

This article discusses FINRA amendments to rules governing social media use.  The article states, "....FINRA is amending proposed FINRA Rule 2210(c)(7) to add a filing exclusion for retail communications that are posted on online interactive electronic forums. Nevertheless, members should be aware that this exemption does not apply to any filing requirement that may arise under either federal law or SEC Rules."

The article further advises, "We can think of firms and advisors as having two compliance “checkpoints” for any message they put out:

• Checkpoint 1: the medium. FINRA and other regulatory bodies have always treated different mediums differently. For instance, they don’t expect an advisor to digitally record an in-person conversation the same way they would archive an e-mail. Over the past few years, social media has presented a host of new challenges to regulators, since it often does not fit neatly with existing regulations that address other mediums. The new FINRA approach changes things up—a lot.
• Checkpoint 2: the message. A prospectus is a prospectus and must be treated like one. Some types of content will always require pre-review; some will always require post-review. The new FINRA approach doesn’t change that at all."

The article warns that this new regulation does not provide a "hall-pass" to freely post content on social media networks without considering other applicable FINRA rules.