This month (April 2017), FINRA issued Regulatory Notice 17-18, “Social Media and Digital Communications.” In the Notice, the FINRA staff reminds broker-dealer firms and associated persons of prior staff guidance on compliance with the communications with the public rules in connection with use of social media sites and use of personal device for business communication purposes. In this Notice, the staff provides guidance via a Q&A method.
In the Q&As, FINRA staff again states that text messaging communications with investors requires compliance with record retentions requirements just like other forms of communication, and that the content of the communication is the determining factor for whether the communication must be retained. The staff also discusses, in several questions, the use of hyperlinks to third-party sites and the concept of adoption of such content, which would then require the firm, in the staff’s view, to ensure that the content of the third-party site comply with the communications with the public rules as if the firm was responsible for the third-party material. The staff also discusses native advertising, use of social media influencers and testimonials and endorsements.
We recommend that compliance staff and firm management with responsibility for advertising. digital marketing staff, and other key staff at broker-dealers review this notice, and the other materials identified in it as prior staff guidance.