Social media regulation in financial services

Following on from Duncan’s post on social media, I wondered how this new medium could or would be regulated when applied to the financial services space. I found 2 articles on this subject but would welcome any comments whether there is anything more recent.

FINRA on Social Media

The first article describes how FINRA has decided that social media will not be regulated – mainly because the existing rules have a post-use filing requirement which they deem to be too demanding. In their words:

If every member firm is required to monitor and review all of the online postings of all of its registered representatives, and every member firm is required to file those that trigger a filing requirement, the impact upon FINRA is potentially overwhelming.

I’m more than a little curious about this & guess that the concern isn’t the cost of storage but how a firm can collect posts from their employees where they have used non-work systems.

The SEC on Social Media

The second article describes the enforcement proceeding by the SEC against a US advisor promoting products via LinkedIn. As the article says:

“The action against Fields is part of a move by the SEC to step up oversight of how the investment industry uses social media, with the regulator taking the opportunity to publish alerts on the issue to investors and advisory firms.”

The notice to advisers warns that firms need to consider how to implement new compliance programs or revisit existing ones in the face of rapidly changing technology.

Given the growth of social media, I would guess that other regulators will be following the SEC’s lead.


Scott, forgive me directly contributing to your post, but a picture does paint a thousand words.

Yesterday’s Alex cartoon in the Daily Telegraph addressed the challenges banks will face in complying with FSA rules on use of mobile phones, and seemed very appropriate, so enjoy (link here)!





One Response

  1. […] Posted on March 5, 2012 by Paul Blank Following Scott Mcleod’s excellent post on Social media regulation in financial services, I noticed the following post (thanks to James Wimbury of GreySpark, for bringing this article to […]

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