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FINRA Requests Data on Member Firms’ Social Media Use

Posted in FINRA Compliance, SEC Compliance, Social Media

The Financial Industry Regulatory Authority announced that it sent targeted examination letters asking broker-dealer members about their social media use.  See http://www.finra.org/Industry/Regulation/Guidance/TargetedExaminationLetters/P282569.

In the letter, FINRA warned that each member firm’s written and electronic communications are subject to periodic spot checks.  Among other questions, FINRA asked the member firms to explain their use of social media, the social media platforms used to post their communications, and the identity of each individual, who posts or updates content on the sites.

FINRA also requested information about the firms’ written supervisory procedures in effect from earlier this year regarding social media communications, and the measures taken to monitor compliance with the policies.  Targeted exam letters — also known as “sweep” letters – assist FINRA and the United States Securities and Exchange Commission gather data that subsequently will be used to focus their exams and investigations.  FINRA is looking for ways to clarify regulations that touch on social media.

In sum, FINRA will likely issue new guidance soon.