At a recent event, Al Raymond, SVP, Head of U.S. Privacy & Social Media Compliance, TD Bank asked Amy Sochard, Senior Director, Advertising Regulation, Financial Industry Regulatory Authority (FINRA), how financial services firms could use social media and stay compliant with industry rules and regulations. This is an edited version of that conversation.
Raymond: What guidance has FINRA given the financial services industry on social media?
Sochard: Back in 2010, we provided our first guidance (Regulatory Notice 10-06) to empower compliance to provide safeguards and controls when using social media. We used a Q&A format in an effort to demystify it a bit. That was followed in 2011 with further guidance (Regulatory Notice 11-39). In 2013 we modified our Communications rules to blend in some of the guidance (Regulatory Notice 13-03) into the actual process.
Raymond: What are your thoughts on social media governance?
Sochard: It’s been fascinating to see the growth of social media. I’m seeing firms taking an integrated approach. Social media is a way to do business. It’s just another form of communications, such as the web was 15 years ago, and TV and radio were 20, 30 years ago.
Raymond: There are a couple of schools of thought when talking about compliance for social media. Some say, this is a new world and we’ve got to think about it differently. Others say, it’s just a different medium, and the same rules apply. How do you see it?
Sochard: I’m more in the “it’s a new medium, but the same rules apply” school of thought. Recordkeeping is essential. Supervision is essential. Those are the things that our examiners are going to look at when they come into the firms. Through FINRA’s spot-check program, we are asking firms to produce samples of their social media communications. Those conversations need to be archived and be retrievable in a timely manner. Firms are not going to get a free pass on social media.
This blog previously appeared on Forbes.com.
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