FINRA Issues Guidance for Brokerages on Social Media Use

Lora Bentley

We knew it was coming because the Financial Industry Regulatory Authority put together a task force to draft social media guidelines for broker-dealers some time ago. As of Wednesday, according to Compliance Week's Melissa Klein Aguilar, those guidelines (or at least the first iteration thereof) are available.


The guidance, which can be found in Regulatory Notice 10-06 , was compiled from the experiences of FINRA personnel in applying the authority's rules to social and other electronic communication, from interviews with social media experts, and from the insights brought to light by task force members representing 14 companies.


Essentially, Aguilar says, the guidance requires firms to supervise employees' use of social-networking tools to make sure clients are not misled, and they include comments on advertising and "books and records requirements." According to the guidelines themselves, "Every firm should consider the guidance provided by this notice in the context of its own business and its compliance and supervisory programs."


FINRA CEO Rick Ketchum says:

Social networking sites and blogs raise new regulatory challenges, particularly in the areas of supervision, advertising, and books and records requirements. Our goal in issuing this Notice is to ensure that firms and brokers use social networking sites in an appropriate manner.

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