Maybe it doesn’t rank up there with the light bulb, but YouTube is a great invention, isn’t it?
All sorts of people are posting things on YouTube. Even the Financial Industry Regulatory Authority (FINRA), which just posted clips for the first time from their Annual Conference.
One, titled “Compliance Considerations for Social Media,” and another from four months ago, “Social Media Compliance Issues,” offer interesting insights from four compliance experts for broker-dealers and financial advisors.
Deborah Corej, Vice President, Compliance, Prudential
- For Prudential’s pilot to try out social media, ten registered reps were chosen along with their supervisors. Approval was required by a supervising principal.
- Each candidate’s disciplinary history, complaint history, and sales practice reports were examined. Risky candidates were barred. 
- Care was taken to ensure that reps and supervisors understood that all policies currently in place had to be adhered to when using social media. Supervisors had to understand the consequences of rule violations.
- Approved social media platforms had to be connected through company email to simplify monitoring by compliance.
- Reps had to thoroughly understand the functionality of each social network. (For example: what does it mean when a rep “likes” another person’s post or site on Facebook?)
Melissa Callison, Vice President, Compliance, Charles Schwab & Co., Inc.
- Companies adopting social media need to define what a business communication is.
- If the firm is being promoted through social media, the posts, tweets or status updates are subject to retention.
- For the most part, Schwab retains all social media communications and aligns social media with advertising.
- Schwab is still building out its social media programs to understand what regulations may or may not apply.
Alexander Gavis, Associate General Counsel, Fidelity Investments
- Further clarification by regulators is necessary because you have FINRA rules regarding communications with the public and SEC recordkeeping rules that overlap.
Amy Sochard, Director, Programs & Investigations, Advertising Regulation, FINRA
– The U.S. Securities & Exchange Commission (SEC) has not published much to define precisely what a business communications is.
- In May 2003, the SEC amended Rule 17-a 4 – the record retention rule for broker dealers. It said that each firm must keep original and copies sent and received relating to its business as a broker-dealer, including interoffice communications. The content and audience of the message determines whether it is related to business.
- FINRA proposes to revamp some definitions and provide further social media guidance later in 2011.
Posting conference clips to YouTube is new for FINRA.
Well, there were three 16 second public service announcements two years ago and two clips, including Deborah Corej of Prudential, from a Baltimore conference four months ago. But the Annual Conference—this is big! Maybe next year the clips will be longer than ten or 12 minutes. Maybe the Annual Conference will be posted in its entirety on YouTube.
(SCOTT PETERSON is co-founder of Relay Station Social Media LLC. We provide integrated Internet marketing, compliance solutions, training, and more to financial and other organizations.
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