The Financial Conduct Authority (FCA) has published their much anticipated guidance consultation on usage of social media by the financial industry. Specifically in regards to promotion of services and offerings. The publication is open for comments by interested parties until November 6, 2014. The regulatory agency is attempting to manage the fast growing communication space of social media where frequently major news announcements are published using 140 characters or less. The evolution of social media and the speed of communication has challenged regulators around the world as they attempt to balance realities of modern communication, transparency and practical investor protection. Some financial industry participants have been concerned the regulatory approach could become excessive and thus minimize knowledge transfer across interested parties. Many examples of social media “going viral” exist – an occurrence that may be both beneficial and at times detrimental for information sharing.
The FCA has defined their objective with the consultation as follows:
- clarify and confirm our approach to the supervision of financial promotions (as defined in the legislation) in social media
- help firms understand how they can use these media and comply with our rules
- remind firms that our rules are intended to be media-neutral to ensure that consumers are presented with certain minimum information, in a fair and balanced way, at the outset of firms’ interaction with them
- set out specific areas that firms need to consider, and provide some solutions and illustrative examples
The consultation provides visual examples of acceptable and non-acceptable types of communication.
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