FINRA Issues Social Media Guidance For Brokers
The Financial Industry Regulatory Authority (FINRA) issued guidance for brokers today on the use of social media.
The guidance in Regulatory Notice 10-06, which is presented in Q&A format, clarifies the responsibilities of firms to supervise the use of social networking sites to ensure that recommendations are suitable and their customers are not misled. The Notice also addresses the recordkeeping and other responsibilities of firms.
In issuing the guidance, FINRA cites the widespread use of social media:
According to a recent report by the Pew Internet and American Life Project, 46 percent of American adults who use the Internet logged onto a social networking site in 2009, which is up from8 percent in 2005. Other studies have shown that use of socialmedia sites by businesses to communicate with customers and the public has grown significantly in the past few years.