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Every day there is an article like this one in a local newspaper sympathizing with someone who was fired because of something they posed online. Thankfully for registered representatives, FINRA is catching up with the digital age and addressed the issue of regulation and social media, fittingly, on its blog. In early January 2010 it released Regulatory Notice 10-06 which is intended to serve as guidance for Registered Representatives. Though short by FINRA standards at only ten pages, it is as monotonous as other FINRA publications. But true to form it does spell out some key things to keep in mind when using social tools:

Record Keeping

Because Twitter, Facebook and any of the other numerous social networking tools are written communication, the correspondences must be retained if they relate to “business as such.” The content of the particular post governs if it falls under the record keeping regulation or not. There are tools from Arkovi and Socialware that help address this.

Suitability

The same FINRA rules apply to social media as every other communication with customers. FINRA suggests going in two different directions with maintaining Suitability compliance. You may either a) make recommendations but only let suitable customers see them or b) don’t make recommendations. Make sure that either your settings or comments are restrained enough to not allow a recommendation to be seen by the wrong person.

Static

Blogs, being a static environment, are considered advertising and must be approved by a regulatory principal. This means that both Suitability and Record Keeping regulations apply.

Interactive

Unlike other the social communications mentioned above, posting on Forums is considered a public appearance and is regulated by the same Rule (2210) that would govern any event you were at in person. The same standard applies to the comment areas of blogs, Facebook walls and other areas with interactive ability.

Facebook

Facebook content falls under both of the two categories listed above. The Profile, pictures, banner ads and any content that users can’t interact with is considered static and must be approved by an appropriate regulatory principal. The wall, comments and any other content that non-firm employees can comment on, poke or engage in some activity is considered interactive. This means that a regulatory principal does not need to approve communications before posting. Due to an employee posting, well, anything on their employer’s wall could be construed as advertising it is not advisable to post non-approved principal approved comments.

As illuminating as this publication was, it is still merely guidance which FINRA offered to shed some light on these key issues. With social media and all other communication tools – Hello, Reply All button – common sense will protect will protect you more often and fully than any compliance officer ever can.

Stay tuned for more articles addressing platform specific concerns.

I gave up Facebook for Lent. The funny thing is, I’m Buddhist. Well, raised Buddhist. Anyways, as I was trying to get my kids to eat their dinner, I was on Facebook reading about what my friends were feeding their kids. It suddenly occurred to me that I had been spending too much time there and needed to prioritize. So, I instantly deactivated my account.

I felt completely liberated the first day without Facebook. I was free of the need to come up with witty status updates, free of the ‘obligation’ to share good information, free of the curiosity of what my friends were up to.

The second day, I still didn’t miss my friends. I missed the information I get from the pages I “like.” I never realized that Facebook had been my primary source for the news and topics I cared about. Right after I deactivated my account, I read an article that Facebook was now the biggest news organization in the world. Great. I gave up Facebook for Lent and won’t be signing in again until Easter. What was I to do?

I turned to my Twitter account. It had been a while, since Facebook was all I “had time for.”

Immediately, I was overwhelmed by the many 140 character bits of information from the 89 people, companies, groups that I had initially started following. Was I following too many or were too many Tweeting too much? I cared about all of them, but who do I stop following?

John Stone wrote, “think quality versus quantity” when it comes to blogs. Truly, the same applies to Twitter, Facebook, and other social media sites. Especially for business and organizations, the quality of the posts and the information shared needs to be thoughtful and valuable to maintain the interest and keep the trust of their followers. Too much information creates follower fatigue. That’s what happened to me on Facebook. In one day, I was beginning to happen with Twitter.

I like my news. I like getting them via social sites. We advise our clients to value an editorial perspective and a careful selection of relevant posts. I hope the companies and groups I follow on Facebook and Twitter do the same.