• SEC Approves FINRA Rule Changes

    The SEC recently issued a release that approves rule revisions submitted last year by FINRA. This will require action from your firm to update its compliance policies and procedures, especially around social media, so we wanted to be sure to bring it to your attention.

    The SEC’s release validates the proposed rule changes that we talked about at the beginning of 2012 in two posts:

    Before the end of June, FINRA should announce the specific date for implementing the new rules. It has already indicated that the implementation date come before the end of March, 2013 — so your firm must be ready to take action.

    FINRA Simplifies Rules Affecting Social Media Communications

    As the SEC release [PDF] explains, the new rules streamline the categories of communications from firms. Instead of six categories, there will now be only three:

    • Retail communication — including most social media messages. (This takes the place of most messages currently classified as advertisements or sales literature.)
    • Correspondence — including either printed or electronic mail to 25 or fewer retail investors, whether clients or prospects of your firm.
    • Institutional communication — aimed at institutional investors.

    FINRA has also clarified its rules for “online interactive electronic forums,” including social networks. One key point here is that firms will still not need to file these messages unless they meet some other filing requirement — for example, if they offer a security for sale. See our earlier posts linked above for more details.

    FINRA Annual Conference Addresses Social Media Issues

    Last week several members of the Socialware staff attended FINRA’s annual conference, which drew more than 1,000 compliance and legal professionals from the financial services industry.

    Social media was a very hot topic at the conference. Of the 30 breakout sessions, three were solely dedicated to social media topics. As it happens, we had customers on all three of those panels, and we were also able to talk with people from many firms about the latest developments in social media compliance.

    We had covered many of the same topics from the FINRA conference during our user group meeting held in Chicago earlier this month, and we will continue to keep you informed of the latest developments as the compliance picture for social media in financial services continues to come into sharper focus.

    Category: Compliance, FINRA/SEC | Tags: , , , , , , , .


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