FINRA has provided regulatory notice 10-06 regarding social media, but none of the guidance is earth shattering and in fact is quite underwhelming.

On January 25, 2010, FINRA released a ten page regulatory notice covering what sort of guidance firms should apply when communicating on social media sites, such as blogs and social networking site. The press release and corresponding document can be found at this link on FINRA’s site.

The following is my take on the FINRA notice:

• The regulatory notice is underwhelming in both content as well as viewpoints.
  Why did FINRA have to organize a task force to basically reiterate already standing rules? Why has the FINRA hosted webinar been rescheduled twice already, once to delay to March 2010 and now to accelerate the webinar to be conducted the week of February 1, 2010?
• Prior approval for posting new content.
  Any communications that recommends a specific investment product and a link to said recommendation should be previously approved by a registered principal.
• Static content = “advertisements”.
  Static content on blogs that is generally accessible by all site visitors is treated as “advertisements” by FINRA and also subject to previous approval by a registered principal.
• Unscripted participation in interactive electronic forums.
  Prior registered principal approval is not required for interactive electronic participation by a firm’s registered representative. However, a firm must have in place a reasonable process to supervise and review the interactive electronic content. Allowable processes can be both pre as well as post use reviews.
• Approval of third-party content is not required so long as two criteria is met.
  • Firm cannot have participated in third-party content preparation
  • Firm cannot explicitly or implicitly endorse or approve said content

Once the FINRA webinar is conducted this week, I will provide a follow-up to these key highlights.

In the meantime, what is your opinion on the FINRA regulatory notice?