Regulatory news from the UK: The FCA proposes new social media rules
Investment marketers need to stay on top of changing compliance issues, especially in the social media sphere. Marketers in the U.K. are currently facing new social media rules proposed by the FCA.
The Financial Conduct Authority, the U.K. organization that regulates the financial industry in the country, has recently been eyeing social media more carefully. Earlier in August, FCA issued new guidance about the use of social media in financial services firms within the U.K., Marketing Week reported. The guidance has been issued as a result of financial services companies marketing specific products and services using social media that are often accompanied by lengthy terms and conditions.
The agency questioned whether platforms like Twitter that have character limits should really be used for certain types of messages. To maintain transparency, the organization has advised that marketers consider attaching pictures to Tweets to include more information than the 140 character limit allows and to analyze each tweet individually to make sure that nothing is overlooked.
The organization also suggested using the #ad hashtag to signify when messages were promoting a product and to ensure the firms are meeting regulatory requirements.
In a statement, Ian Twinn, director of public affairs at ISBA, the British advertiser body, said that responsible advertisers will always support transparency in advertising, particularly in financial services.
The Financial Industry Regulatory Authority also issues similar notices on occasion. In 2013, FINRA announced a “sweep,” in which it examined how brokerage firms were using social media and what measures were in place to oversee this use. The firm issued letters to spot check these firms’ electronic communications. When firms receive these letters, they need to look at their procedures for approval of social media messaging and determine whether everything is properly documented, Compliance Week reported.
Social media is a marketing and communication channel that can’t be ignored by asset managers, but it’s obvious that firms need to maintain thorough processes for ensuring compliance and keep on their toes for potential changes. It’s great to see the FCA’s acknowledgement of the importance of social media in online media and customer communication. In the FCA’s proposed guidance report, the regulator said, “We see positive benefits from using social media, but this has to be based on compliance.” The full report can be read here.
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