Posted by Michael Heaton on 07/17/2017

The Financial Industry Regulatory Authority (“FINRA”) recently released additional guidance on the supervision of interactive social media posts by member firms. In Regulatory Notice, 17-18 “Guidance on Social Networking Websites and Business Communications” (“the Notice”), FINRA provides comments in a Q&A format concerning the application of Rule 2210 to certain items it did not address in related, previous notices. FINRA writes that their comments do not replace previous interpretive guidance. Below are highlights from the Notice in no order of importance.

Review what you link and share

If you link to an article, or share a video or other specific, web-based content from an independent third party, you have “adopted” the content and are responsible for ensuring that the content complies with the same standards as communications of the firm when someone reads it in context with the statements in the originating post.

Review links from your website

If you include a link from your Firm’s website to a section of an independent third-party website, you have not “adopted” the content if the link meets the following criteria:

  • It is always available to investors who visit the firm's website, regardless of what it says about your firm; and
  • The third party can update it without investors losing access.

However, if you assist in developing content on the third part site, or have any influence or control over its content, then you have adopted the content and must ensure that it meets the Firm’s standards for communications.

Unsolicited Comments on social media

If one of your friends or connections on social media offers an opinion of your capabilities, FINRA does not regard unsolicited third-party opinions or comments that individuals may post on a social media platform to be communications of Firm or its supervised persons for the purposes of Rule 2210.

However, if someone posts an unsolicited favorable comment, and you then like or share the comment, then you have adopted them and are subject to provisions under Rule.

You must archive text messages

If you communicate with clients via text message, Securities and Exchange Commission (“SEC”) and FINRA rules require that you retain the communication for record retention purposes.

Using social media “influencers”

If you arrange for comments or posts on social media platforms by an individual that promotes your or your Firm, products or services, then FINRA considers you “entangled” with those communications. Therefore, you should clearly identify any communications in the form of comments or posts by influencers as advertisements and include the Firm’s name and any other information, as appropriate, for compliance with Rule 2210.

BrokerCheck link in Apps

FINRA Requires that member firms include a clear reference and hyperlink to BrokerCheck on its website’s homepage and on any other page that includes a profile of an individual registered representative. However, the requirement for a BrokerCheck link does not apply to an app that the Firm creates because the Rule specifically references websites only. There is no requirement to include a reference and hyperlink to BrokerCheck in an app.