The Financial Conduct Authority (FCA) has published their much anticipated guidance consultation on usage of social media by the financial industry. Â Specifically in regards to promotion of services and offerings. Â The publication is open for comments by interested parties until November 6, 2014. Â 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. Â 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. Â Some financial industry participants have been concerned the regulatory approach could become excessive and thus minimize knowledge transfer across interested parties. Â 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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