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found out today that the Financial Industry Regulatory Authority (“FINRA”) 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 broker-dealers
who used social media to interact with retail investors. In addition, firms are being asked to explain
how they monitor compliance.
FINRA is doing spot checks, it might not be long before regulators start doing
spot checks as well. If your institution
uses social media, you should make sure you have controls in place to monitor your
following is a request list from FINRA’s Advertising Regulation Department that
requests firms provide the following:
- An explanation of how
the firm is currently using social media (e.g., Facebook, Twitter, LinkedIn,
blogs) at the corporate level in the conduct of its business. Please be
specific as to the business purpose of each social media platform as it is used
by the firm.
- Please provide the
following with respect to the firm:The URL for each of the social media sites
used by the firm at the corporate level, the date the firm began using each of
the sites identified above, and the identity of all individuals who post and/or
update content of the sites identified above.
- An explanation of how
the firm’s registered representatives and associated persons generally use
social media in the conduct of the firm’s business, including the date(s) the
firm began allowing the use of each social media platform and whether such
- The portion of your
firm’s written supervisory procedures concerning the production, approval and
distribution of social media communications.
- An explanation of the
measures that your firm has adopted to monitor compliance with the firm’s
social media policies (e.g., training meetings, annual certification,
- A tabular list of
your firm’s top 20 producing registered representatives (based on commissioned
sales) who used social media for business purposes to interact with retail
investors as defined in FINRA Rule 2210(a)(6). Please identify the type of
social media used by each individual for business purposes during this time
period. Please include the individual’s full name and CRD number, as well as
the dollar amounts of sales made and commissions earned during the period.
thought this was interesting. While I
have not heard word of the OCC or FDIC performing spot checks, it doesn’t mean
they won’t start. It may be better to be
prepared ahead of time having performed your own due diligence and monitoring.