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FINRA Issues Additional Guidance on Mobile Communications, Social Media and Text Messaging

FINRA Fines for Text Messages - TeleMessage

Many financial service firms struggle to fully understand and embrace mobile communication and social media. FINRA published Regulatory Notice 17-18, Social media and Digital Communications, to provide additional guidance on the FINRA rules governing text messaging and social media communications. This was in response to the new technologies and communications. The updated guidance by FINRA clarifies the rules governing communication with the public via social networks and personal devices for business communications. This Notice reminds companies about content, supervision, and record-keeping requirements.

Here are some key takeaways: 

Recordkeeping. Reminder to firms that they are required by SEA Rule 17a-4(b),(4) to maintain business communications records. Firms must also train and educate advisors about business and personal communications and how to keep, supervise, and produce business communications.

Text messaging. Text messaging. Firms that allow advisors to use chat services or text messaging for business purposes must keep records of these communications by SEC and FINRA rules. You must ensure that compliance chat in text messaging apps is followed. LeapXpert offers a range of business communication tools to help your company secure all your external and internal messages.

Personal communication. Advisors are allowed to share information about their firm that isn’t related to its products or services without being subject to FINRA Rule 22010. An advisor might share a post from their company about a charity event they sponsor. However, if the communication is related to the firm’s products or services, the content will be subject to FINRA Rule 210.

Third-party content. Regulatory Notice 10-06 says customer posts and third-party content on a firm’s social media accounts do not count as ‘communications to the public’. This is contrary to FINRA Rule 2210. This is reiterated in Regulatory Notice 17-18. This rule is not applicable to situations where a company controls, monitors, endorses or pays for third-party content. These are covered under FINRA Rule 2210.

Hyperlinks to third-party websites. FINRA reminds companies that Regulatory Notice 11-339 states that firms can’t link to third-party websites that contain misleading or false content. Further, the Notice clarifies that firms can ‘adopt’ third-party content by sharing or linking to it. This means that they must ensure that the content conforms to communication rules.

Endorsements or testimonials. Unsolicited comments and opinions from third parties posted to a firm’s social networks are not considered firm communications or testimonials as per FINRA Rule 2210. If a firm or advisor shares or likes a comment/testimonial, it is considered an adoption of that content and is subject to the communications rules.

Notice: Registered Investment Advisors must still adhere to SEC Rule 206(4), which prohibits the promotion of testimonials or endorsements from clients.

Native advertising. Native advertising is allowed by firms if it complies with FINRA Rule 2210. Native advertising must include the firm’s name, the relationship between the firm, any entity, or person, as well as the names and details of the products and services the firm offers.

For more information about FINRA and SEC rules and regulations regarding social media and text messages, to know that you are properly executing your WeChat compliance to FINRA, you can visit the official website of LeapXpert at