The firm is no stranger to social media, having been on Twitter for eight years. But what marketing and disclosure considerations do firms have to think about before sharing online?
You can use social media for disclosure, but…
The US Securities and Exchange Commission guidance on firms’ use of social media says using it to announce key information complying with Regulation Fair Disclosure is permitted, as long as investors are told where the information will appear.
“Most social media are perfectly suitable methods for communicating with investors, but not if the access is restricted or if investors don’t know that’s where they need to turn to get the latest news,” George Canellos, acting director of the SEC’s division of enforcement, said in the guidance.
… be careful reposting praise
In a 2014 note, the regulator’s division of investment management advised that under the 1940 Investment Advisers Act, firms are forbidden to use client testimonials in their advertisements, and that the rule does extend to social media.
Independent client testimonials made on social media can be reproduced on a firm’s account without breaking the testimonial rule.
Write your social media handbook
The SEC’s 2012 risk alert on the subject lists highlights where firms should implement strict compliance procedures. These include considering prohibitions on professional information being shared on staff’s personal accounts, content standards for standards and approvals, monitoring usage of the official account and preventing breaches of advertising laws.
Showcase your expertise
Firms should not use social media as an extension of their website, but to share their knowledge with an online audience.
“Financial firms shouldn’t look to use social media to strictly sell their products and services. Instead, they should look at opportunities to showcase thought leadership, share advice with their target audience and develop a greater understanding of what people are saying about them and their industry,” said Harriet Chamberlain, head of digital at Citigate Dewe Rogerson, a global public relations firm.