Tweet this: Finra spot-checking firms for social media compliance

Regulator asking for list of top 20 producing reps at the targeted B-Ds who use social media

Jun 19, 2013 @ 12:51 pm

By Dan Jamieson

social media, twitter, facebook, linkedin, finra, registered reps
+ Zoom
(Photo: Bloomberg News)

The Financial Industry Regulatory Authority Inc. is doing social-media compliance spot checks on some of its member firms.

In a notice posted Monday on Finra's website, the regulator said it wants broker-dealers to identify the sites used by a firm, as well as all individuals who post or update the firm's content on social-media sites.

Finra is also asking for a list of the top 20 producing registered representatives at the targeted B-Ds who used social media to interact with retail investors from Feb. 4 through May 4.

In addition, firms are being asked to explain how they monitor compliance.

The notice went out to “selected” member firms this month, Finra spokesman George Smaragdis wrote in an e-mail. He declined to name the firms and said Finra is not disclosing how many firms are being asked for the information.

No due date for a response was provided in the notice, and Mr. Smaragdis had no further information about timing.

“The initial social-media Regulatory Notice (10-06) came out over three years ago, and so it makes sense to incorporate social-media reviews into our routine surveillance,” he wrote.

Finra's rules covering communications with the public specify that the regulator can perform spot checks to ensure compliance.

Member firms and Finra have both been struggling with how to supervise the use of social media without impeding spontaneous conversations.

In August 2011, Finra provided further guidance in Regulatory Notice 11-39.

Later that year, the regulator backed off a proposal that would have required broker-dealers to file social-media postings with Finra.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

Consuelo Mack WealthTrack

Robert Kleinschmidt: How the markets have changed in the age of Trump

When Donald J. Trump was elected president, it changed investors' outlook and generated new market momentum, according to Robert Kleinschmidt, president and CEO of Tocqueville Asset Management. But can the market continue to go up?

Video Spotlight

Are Your Clients Prepared For Market Downturns?

Sponsored by Prudential

Recommended Video

Path to growth

Latest news & opinion

Jerry Schlichter's fee lawsuits have left an indelible mark on the 401(k) industry

After a decade of litigation, fees are lower and retirement plans are more transparent. But have the lawsuits gone too far?

10 best financial adviser jokes

How many financial advisers does it take to screw in a lightbulb?

With margins crashing, broker-dealers look to merge: report

Increased regulation is straining profit margins among broker-dealers, sending many of them into the arms of their bigger brethren.

Hackers may have profited from SEC breach

The hack of the agency's Edgar filing system occurred in 2016, but the regulator didn't conclude until last month that the cybercriminals may have used their bounty to make illicit trades.

Top 10 financial firms ranked by investor satisfaction

Find out which firm took the top slot for overall investor satisfaction for the second year in a row.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print