There’s been a fair amount of discussion on Twitter recently regarding social media and the impact of the FSA’s Financial Promotions Industry Update No. 5 – June 2010, financial promotions using new media.
In simple terms, the same rules apply to “new” (not really that new any more!) media that apply to everything else. They apply to all communications issued by regulated firms. This includes social tools like Twitter, LinkedIn, FaceBook, forums and blogs.
Any digital communications we issue must be clear, fair and not-misleading. They fall into the same categories as anything else: promotional, non-promotional and financial promotions.
As an example we consider promotional tweets as financial promotions. They must comply with the FSA financial promotion rules, so we ensure that compliance approval is obtained prior to issue and create an adequate record of approval using our existing systems. Remember, a financial promotion is a communication which induces a person to engage in investment activity: there is an element of persuasion.
Our non-promotional tweets do not need a prior compliance approval but the fair, clear and not-misleading rule must still be adhered to.
Responses also count
It’s also worth pointing out that any responses or re-tweets count as well – so before replying or taking action you need to think if what you’re doing counts as a financial promotion.
Don’t forget data protection
The same data protection rules also still apply. By its very nature, social media is open and can be seen by loads of people. If there is a requirement to share personal information then you need to move the conversation out of the social space.
There is a silver lining….
The benefit to this is that the social environment isn’t littered with financial services promotions – it’s quite hard getting a past performance warning into 140 characters!
Please note that this is my opinion and not that of my employer.