Posts Tagged finra
Last month, I was asked by a new client:
“How are companies with technology solutions in place to monitor/moderate/archive posts treating Registered Reps’ and captive agents’ ability to share updates and links on social media sites? Are they allowing them to do this? Are they pre-reviewing activity in advance or sampling post-review?”
The answer? It depends.
There is no one approach. And every firm takes a different approach. However, in general, we are seeing three general approaches:
Posting Corporate Messages: At the most conservative end of the spectrum, some firms create centralized libraries of pre-approved content, including a series of introductory statements (updates, tweets, etc) and even craft responses to updates. Because social media never “goes away”, these firms interpret all social media communications to be “static” advertising and hence they pre-approve everything. Although not strictly required by FINRA, as Joe Price of FINRA recently told the audience at the FINRA Advertising Regulation Conference, “Each firm bases its social media use policies its risk tolerance. And that’s fine”.
Personalization: The majority of firms also create centralized, preapproved content libraries with a series of introductory statements. However, they interpret the interactive portion of social media to be akin to a public appearance and hence allow their registered persons to interact on social media in real time without pre-approving each post. However, they put controls in place to block certain “trigger” words (such as stock symbols, “guarantee” “buy”, “sell”) and post review a pre-defined percentage interactive communications to demonstrate supervision.
Authentic Voice: A smaller group of firms take the personalization approach a step further. These firms create centralized, preapproved content libraries, with introductory statements, and block certain “trigger” words (as above) to allow for interactive communications. However, these firms also encourage their registered persons to craft their own introductory statements to preapproved content as well as to post their own content with controls in place to block inappropriate “trigger” words. And like above, firms post review a pre-defined percentage interactive communications to demonstrate supervision.
Do firms use a phased approach?
We have found that firms tend to pilot social media with tight controls in place and typically don’t allow registered persons much latitude. However, once they begin to trust technology to safeguard their firms’ reputation and stay compliant, firms often begin to allow their reps to personalize content to varying degrees.
Different Use Policies- It’s also effective to create and enforce different use policies for different categories of users. For example, financial advisors with clean compliance track records and who have demonstrated appropriate use of social media, may be allowed a bit more freedom than those who are new to social media or have problematic compliance histories.
What works best?
We have found that reps achieve the most engagement when their firms facilitate allowing the reps’ “Authentic Voice” to shine through. After all, don’t we prefer to do business with people who share our common interest and passions? However, although this approach requires training in best practices, and perhaps a bit of hand holding, it yields better long term results.
As human beings, our behavior hasn’t changed for centuries. We naturally socialize. Socializing our buying decisions is something that we have done for centuries. Social media simply allows us to connect with those wider social groups—geographically—making our social groups more potent as our social interactions become public through social media.
As social media continues to evolve, so too does its usage and the regulations surrounding those professions adhering to compliance requirements. Starting in 2010, the Financial Industry Regulatory Authority (FINRA) issued regulatory notices to provide guidance regarding the use of social media in the financial services profession, specifically Notice 10-06 and then in 2011, Notice 11-39.
Why haven’t more financial services firms embraced social media as part of their sales and marketing programs?
Some of the key reasons are regulatory.
FINRA, the Securities and Exchange Commission (SEC), and several other regulatory bodies outside the U.S., each impose strict guidelines and rules on the use of all electronic communications, including social media. This demands careful oversight of online communications and activities to ensure that financial advisors aren’t using social media channels inappropriately or without retaining records of all communications.
A sampling of Social Media-Related Notices and Rules
- FINRA Regulatory Notice 10-06: Summary: Static content on social media sites and blogs are considered advertisements and need to be pre-approved. However, interactive content, like chat rooms, is considered non-static and does not require pre-approval by a registered principal prior to use.
- FINRA Regulatory Notice 11-39: Summary: To answer some of the questions raised by Notice 10-06, this notice clarifies that it’s the content of the communication rather than the channel that is being reviewed. Firms are also subject to the “adoption” and “entanglement” theories regarding third-party posts, and that business communication through personal devices must be supervised and recorded.
- NASD Rule 3010: Summary: Members must establish, maintain, and enforce written procedures for communications of registered representatives
- IRS Circular 230: Summary: Tax professionals could be subject to penalties regarding written advice, including their use of social media such as blogs, and Facebook, LinkedIn, and Twitter comments.
- New FINRA Rule 2210 (effective February 2013): describes various communications categories (institutional, retails, correspondence), and approval, review and record keeping requirements for each
- SEC Rules 17a-3 and 17a-4: require written, enforceable retention policies, searchable index, viewable and readily retrievable, offsite storage, and storage of data on WORM (write once, read many) optical media
In addition to making sure they adhere to the rules and regulations, firms are also concerned about the risks of data leakage, malware, and viruses. However, as new technologies have emerged to address regulatory and security challenges, financial service firms are demonstrating to their senior management that the risks of using social media may be mitigated.
What it all boils down to is this. Before engaging in any social media activity for your firm, be aware of the regulations surrounding social media in a professional services firm. Take them into consideration and demonstrate that you have taken a thoughtful approach. Put the review process into place. And most importantly, identify an influential principal of the firm who will champion the effort. It’s worth the effort. As firms slowly adopt social media within their distributed teams as a means to reach out to clients and customers, they are beginning to see increases in new customers and revenues that more than offset their initial concerns about the risks.
I just got back from a quick trip to the Great White North. NHL teams are still locked out, which might explain the forlorn look on folks I met or walked by. Luckily, the absence of hockey didn’t put a damper on IIROC’s Compliance and Legal Section (CLS) annual conference. Sessions were lively and informative, especially the social media one, and people seemed generally optimistic that the NHL season could still be salvaged. It was optimism all around.
Much like its FINRA brethren, IIROC has its own social media-specific guidelines in the form of Notice 11-0349. I swear, looking at FINRA’s 10-06/11-39 and IIROC’s 11-0349 side-by-side, you’d think you were seeing double. Even the session topics looked similar to what you’d see at the FINRA events. Just like in the States, the social media session was packed.
At the IIROC one, the panel consisted of an attorney, a compliance officer, and a marketing executive – the exact same key stakeholders you see involved in social media enablement efforts south of the border. In fact, as a whole, I got the impression Canada is not so far behind the US in terms of adoption of social in the financial services industry.
I heard repeatedly that Canadian firms were slowly opening up access to social and getting the ball rollin’ on pilot programs. So, the trend seems to be that, if you’re a financial institution, you should at least be considering social or else you’re gonna be left behind. That was the consensus of nearly everyone I spoke with.
2013 is just around the corner, and I’m expecting big things out of our friends up north. They’ve had a year to take notes from their US counterparts, guidelines are in place, social media policies are being drawn up, and there’s a still chance for an NHL season.
We just need Rush to belt out “O Canada” and all will be good.
In an effort to distract myself from the heartbreaking impact of Hurricane Sandy across the New York and New Jersey area, I thought I’d do a bit of research on how regulators of the retail banking industry are handling social media.
As a former FINRA employee and an avid attendee of compliance conferences and events, I’m familiar with guidance from FINRA and the SEC for the securities industry. However, retail banking is governed by a whole other alphabet soup of federal authorities. Regulators include the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the Consumer Financial Protection Bureau (CFPB).
However, like the securities industry, banks are interested in using social media to provide a personal touch to their customers. Even the Office of the Comptroller of the Currency recently ceased paper distribution of news and issuances in favor of email, Facebook and Twitter.
In response to the retail banking industry’s request, the Federal Financial Institutions Examinations Council (FFIEC) is coordinating the activities of these multiple federal banking regulators to craft social media guidance. FFIEC plans on publishing these guidelines in the Federal Register before the year’s end. If you are not familiar with the FFIEC, the Council was established in 1979 to promote uniformity in the supervision of financial institutions.
A source at the Office of the Comptroller of the Currency (OCC), says that once guidance is published in the Federal Register, the FFIEC expects substantial feedback from the industry and will accept comments for sixty days. From what I hear, the guidance will describe how existing rules and regulations impact social media. And as the members of FFIEC recognize the rapidly shifting nature of social media, they are trying to avoid specific recommendations. Their intent is to offer principal-based guidance that may be useful over time. Guidance may include, but, not be limited to interpretations of rules regarding Deposit Accounts, Consumer Lending, Payment Systems, Truth in Savings, Disclosures and more.
Don’t want to wait until possibly Spring of 2013 to get started? Those who wish to proceed with social media now, may want to begin to interpret how existing rules may impact the use of social media at retail banks. For example:
- individuals need to be verified as customers for advice to be provided
- liking or retweeting certain articles may be seen as “providing investment advice” and subject to review
- marketers to comply with advertising guidelines to avoid misleading or inaccurate communications
- disclosures need to be considered
- records of electronic communications require retention
- and privacy, confidentiality and customers’ data needs to be protected.
Additionally, there are also wider regulatory concerns such as Gramm-Leach-Bliley Act (GLBA) , Red Flag Rules and Privacy of Consumer Financial Information to work through.
While you wait for Federal Financial Institutions Examinations Council (FFIEC)’s guidance, you might also find it helpful to read what regulators within the securities industry are saying. We’ve found that guidance from regulators (FINRA, SEC, IIROC, FSA, SEBI) tends to fall along similar lines: social media is considered as just another form electronic communications and should be treated as such.
FINRA Regulatory Notices:
- 10-06 – Social Media Websites Guidance on Blogs and Social Networking Web Sites
- 11-39 – Social Media Websites and the Use of Personal Devices for Business Communications
- 12-29 – Communications with the Public
- FINRA’s Guide for the Web for Registered Representatives
Securities and Exchange Commission-
Although this seems like a lot to wade though, you’ll see it’s worth the effort. Financial institutions that deploy social media are reaping the rewards of enhanced customer service at lower costs, broader brand recognition and an increase in new accounts and revenues.
On a personal note, as compliance in retail banking is a new area for me, I particularly welcome your insights. I would also welcome suggestions for additional resources for me to read or conference or webinars to attend. And finally, here at Actiance, we’ll be drafting a White Paper on regulations for the Retail Banking Industry. Look for that soon.
After last month’s annual FINRA conference wrapped up, the Actiance team decided to stick around for an extra day to stop by FINRA headquarters and meet up with some key folks in the Advertising Regulation division to talk about social media and technology. Judging by how many social media-related sessions there were at the conference (that would be 3), social is definitely a hot topic these days for FINRA, the SEC, and their regulated entities.
This is a marked change from the last annual conference when only Regulatory Notice 10-06 was in play. Now, there’s also Regulatory Notice 11-39, a FINRA social media sanction (Jenny Ta), an SEC risk alert on social media, and an SEC enforcement action (Anthony Fields) to gnaw on. What all this points to is continued interest in social media by the regulatory bodies and the firms they oversee. As technology chugs along to keep pace with the social media train, so too is the need for regulators to “stay in touch” with what’s going on out there, hence, our visit to Rockville, MD.
And just as FINRA looks at social media to see how the latter is used by member firms for marketing and advertising, the regulator is also curious as to how technology is aiding firms in their marketing initiatives while also remaining compliant with FINRA guidelines. In many ways, it’s a symbiotic relationship: regulatory guidelines create a business driver for firms like Actiance, while technology helps member firms stay compliant.
Actiance maintains ongoing dialogues with all the key regulatory bodies, which paves the way for the ideal mix of features and training that helps our customers achieve their marketing and compliance objectives. Because we understand what the regulators are looking for, their mindset, and the direction they’re headed, we’re able to design our platform and training programs accordingly. Case in point: Actiance was instrumental in persuading the SEC to incorporate social media into Rules 17a-3 and 17a-4. Because we cut our teeth in the IM world, we have the expertise and credibility to regularly engage with regulators and educate them on the technology trends that they need to be wary of when thinking about future guidelines.
Certainly, in an industry known for its strict guidelines and regular audits, a technology partner that understands these rules is vital indeed for ensuring that all FINRA-regulated firms can confidently deploy these technology solutions to remain compliant. Actiance in particular has ex-FINRA members, attorneys, and financial industry pros on its staff to eliminate any confusion or doubts customers might have on what is necessary to ensure compliance in a world of dynamic communication channels.
We confidently believe that social media won’t go away any time soon, so we envision the symbiotic relationship continuing, evolving, and flourishing.
At a meeting last week with a prospective client, while we were diving into freshly baked cookies (yes, that’s right, warm cookies, I love meetings in the Midwest), a compliance professional turned to me and asked me a question about “PAC files”. Really?
At that moment, I realized that it’s time to change the conversation.
For more than 2 years, we have been discussing how to use social media while complying with the financial services rules and regulations. After all, Financial Industry Regulatory Authority (FINRA) issued its first Regulatory Notice 10-06 in January of 2010, followed by the Financial Services Authority (FSA), Financial Promotions Using Social Media, and then came Cir/ISD/1/2011 from the Securities and Exchange Board of India (SEBI), then more guidance from FINRA with Regulatory Notice 11-39 followed by Investment Industry Regulatory Organization of Canada (IIROC) issuing 11-0349, and the Securities Exchange Commission (SEC) alerts early this year, that included Investor Adviser Use of Social Media. In addition, the National Association of Insurance Commissioners is drafting The Use of Social Media in Insurance. We have even seen the Massachusetts Securities Division issue a letter to Registered Investment Advisers on the use of social media.
Fundamentally, we are reminded by all these regulators that social media is just another form of written communications, and needs to be treated as such. Existing rules around recordkeeping, suitability, advertising, and supervision are media-neutral and all apply. Content, not the device is determinative. And the regulators are only interested in business communications. With the release of each new set of guidance, there are lively conversations about how to interpret and apply some of the rules to specific features across the social networking sites, however, at this point, the message is clear, spirit of the guidance is to protect the investor.
As none of the native social networking sites have ability to support these compliance requirements, project managers, IT and Security have been having their own discussions. Third party vendors have been identified, requirements outlined, demo after demo watched, pilots launched, RFPs written and evaluated, matrixes comparing vendors developed and analyzed, budgets submitted, resources assigned and contacts negotiated. In some cases, upward of 30 people from within the enterprise have been involved in all these conversations. No wonder the compliance professional had heard about “PAC files”.
In the meantime, the lines of business, marketing departments, investor relations, human resources, research, customer service, and savvy financial advisors are chomping at the bit to start using social media to nurture existing relationships, attract new clients, build brand awareness, share information, do recruiting and conduct research. Maybe they have heard the statistics: more than 47% of Boomers use social media in some form (Forrester Research, June 2011) and the heaviest users of social media, Gen Y (ages 18-30) hold more than $2.4 trillion in personal income and by 2025 will control more than 46% of the personal wealth in the United State (Javelin Research). They want to speak to the language of their clients and prospects. Or maybe, they have heard the stories about how financial advisors are beginning to generate business. Like the advisor at a large broker-dealer who captured a new $2 million dollar account after noticing that a LinkedIn connection had retired. Or the advisor who attracted a $1 million prospect after only 96 tweets and with only 51 followers.
So now that you ensured that your firm will be in compliance with the rules and regulations and you have decided which technology solution to use, let’s change the conversation. Let’s talk about training, integrated marketing, content strategy and measurement. And how you will begin to support your Financial Advisers’ use of social media to build their business.
At the SIFMA Compliance and Legal Monthly Luncheon held at the Harvard Club in New York on January 17, Richard Ketchum, Chairman and Chief Executive Officer of FINRA outlined exam priorities for 2012.
Mr. Ketchum acknowledged that these difficult markets, the search for yield, and the changing regulatory landscape due to the implementation of Dodd Frank can place “tremendous pressures” on firms, clients, and Compliance departments. But, at the end of the day, the mission of FINRA is to protect investors. He stated that he hoped that his remarks before the group of mostly attorneys and other compliance professionals would “ get your blood running, if not running cold,” as he encouraged everyone to “step up” to meet compliance challenges and respond in an honest way to the lessons we’ve learned over the last few years.
In the next few weeks, FINRA will release its Annual Exam Priority Letter. The following are a few advance highlights:
Complex Products – Heightened supervision is required with enhanced compliance procedures to ensure that reps, supervisors, and retail investors understand complex products. See Regulatory Notice 12-03 for details.
Supervision – Firms must demonstrate responsibility for all business lines they engage in, in spite of increased difficulty, complexity, and customer frustrations with return on investments. Firms must demonstrate proper supervision.
Suitability – Changes to FINRA “Know your customer” Suitability are rules going into effect July 9th. Examiners will review the steps firms are taking to prepare for changes and implementation once rules are in effect. See Regulatory Notice 11-25 for details.
Data Security – In light of sophisticated attacks against firms, FINRA is looking for equally significant defenses, including attention to emerging markets.
Social Media – FINRA has issued two notices, Regulatory Notice 10-06 Guidance on Blogs and Social Networking Web Sites and Regulatory Notice 11-39 Guidance on Social Networking Websites and Business Communications. Examiners will focus on the supervision and recordkeeping of all business communications, regardless of device; the pre-approval of static content; supervision of interactive content on a risk basis; and the adoption and entanglement of third-party content resulting in a firm being responsible for that content. Furthermore, FINRA examiners will check whether a registered principal of the firm has reviewed social media sites before they are launched; if there are links to third-party sites with false or misleading content; that firms have established policies to ensure the accuracy of third-party data feeds; and when firms allow the use of personal devices, they must demonstrate the ability to supervise and keep records of those business communications.
Mr. Ketchum noted that FINRA welcomes continued feedback from the industry on any and all issues and is looking forward to a three-way conversation - specifically about social media and FINRA, the industry, and the SEC — that sets so much of the record-keeping requirements in the industry.
So, watch for FINRA’s Annual Exam Priority Letter soon and continue to take a careful look at how your firm is complying with FINRA rules, including following FINRA’s guidance on social media. And consider writing a letter to Mr. Ketchum and FINRA to share your key learnings as you begin to deploy social media within your enterprise.
In recent weeks, there has been some confusion about FINRA’s stance on social media. Between one source and another, it seems as if there’s a general feeling that FINRA is “backing off” from social media. We don’t agree. We’re going to attempt to clarify FINRA’s position, but first, some context.
Since the consolidation of NASD and the regulatory function of NYSE in 2007, the newly established entity, FINRA, has worked towards creating a new, consolidated FINRA Rulebook. The goal is to harmonize and streamline existing rules (from NYSE and NASD), adapt to the changes in the securities industry, and create a set of rules that are flexible enough to be used across different types of firms regulated by FINRA.
As FINRA has clearly stated that social media is just another form of electronic communications and should be treated as such, firms are closely watching FINRA’s progress on the consolidation of rules that impact social media, such as supervision, bookkeeping, and communications.
In July 2011, FINRA filed proposed changes to Communications with the Public rules with the Securities Exchange Commission. Since then, there have been two rounds of comments from the industry with FINRA submitting the final proposal for changes on December 22, 2011, to the SEC. The SEC is accepting comments from the industry until January 18, 2012, and will comment on the proposed rule sometime after that.
The issue that has everyone talking within social media circles begins on page 10 of the December 22nd letter. The current NASD Rule 2210 specifies six types of communications, with different regulatory requirements for each. One category, “Public Appearance,” used for “participation in a seminar, forum (including an electronic forum), radio or television interview” was where FINRA originally classified interactive posts on social media. That meant that firms were responsible for supervising such activities to ensure compliance with content standards and maintain appropriate records but were not required to file these posts with the FINRA Advertising Department. (A sidenote for those of you unfamiliar with the regulatory process: depending on how they are categorized, certain advertising and sales literature materials need to be both pre-approved by a registered principal of a firm and then sent to FINRA for review and approval.)
Under the new rule, however, FINRA Rule 2210 would be streamlined to have only three categories of communications and “Public appearance” would no longer be a separate category under communications. Instead, FINRA has proposed categorizing social media as “Retail Communications,” which has a different set of regulatory requirements. When the industry expressed concern that this would make using social media overly complicated for firms, FINRA specifically excluded posts on online interactive electronic forums from filing requirements.
However, it’s important to note that although social media may not be subject to filing requirements with the proposed rule, firms still need to ensure compliance with content standards and bookkeeping requirements like any other written communications. That means that social media communications need to be captured, supervised, archived, and made available upon request. Filing is not archiving after all, and a number of folks appear to have been confusing the two terms.
Backing off social media? We don’t think so, especially when the SEC issues two alerts and charges a firm with the fraudulent use on LinkedIn in one day. In fact, we think that the regulators will pay close attention to the use of social media in the coming year to demonstrate their commitment to protecting investors.
Are you ready? We’re certainly standing by. In fact, we’re planning on putting on a webinar once FINRA 2210 is finalized, so watch this space for details. And feel free to contact us if you’d like to chat about your specific social media concerns in the meantime.
As a potential harbinger of things to come, the state of Massachusetts’ upcoming new guidelines and best practices on social media usage (they take effect in 2012) by investment advisors could usher in a fresh wave of social media-specific guidelines from state regulators. This comes on the heels of FINRA’s announcement that, effective July 28, 2011, FINRA will oversee those firms with more than $100 million in assets under management (old figure was $25 million) with firms below that threshold overseen by the individual state regulators. Translation: state regulators will now have more oversight of smaller advisory firms.
Given that the financial services industry has been at the forefront of regulating social media activities relative to other industries (e.g., FINRA 10-06 and 11-39), it’s no surprise to see similar guidelines being planned at the state level. Already, the states of Oregon, North Carolina, and Florida have issued social media-specific guidelines for the state and local government agencies that fall within their purview, but Massachusetts is the first to issue guidelines targeted at financial advisory firms within its borders.
Massachusetts’ initiative is noteworthy for several reasons. First, it acknowledges that social media is booming and is actively being used in firms. According to this article, 44% of investment advisors in Massachusetts use social media to communicate with clients, yet only 30% of firms have recordkeeping policies in place for social media content. Secondly, because the threshold between state and FINRA regulators’ oversight areas was raised, many states will likely adopt their own social media guidelines for advisory firms and will look to Massachusetts’ language for guidance.
Whether it’s FINRA’s or an individual state regulator’s domain, the requirements will be similar. Having written policies on supervision and recordkeeping will be consistent between the two. Regulators, whether federal or state, are keen to ensure that firms have the requisite policies and procedures in place to properly monitor and document their advisors’ social media activities. Additionally, regulators will also look to see that the technology solutions firms have deployed are themselves up to snuff.
There are plenty of technology vendors purporting to do social media archiving, but that list gets whittled down dramatically when you also consider real-time monitoring, pre-review capabilities, and coverage for all forms of electronic communications, not just social media. Social media may receive all the glamour and headlines, but firms need to pay attention to other forms of electronic communications that are popular among advisors, namely, instant messaging and peer-to-peer applications like Skype.
So, at the end of the day, state regulators will have to draft their guidelines with not just social media in mind, but also, the array of other Web 2.0 communication channels in wide use today. If Massachusetts doesn’t carefully articulate its guidelines, it could create more problems and confusion than doing nothing at all – a veritable 2012 version of the Boston Tea Party looms.
What say you?
This fall, I attended the FINRA AdReg Conference in Washington, DC, and I’m feeling inspired enough to share some of my observations, following the news that IIROC has now issued its latest guidelines on social media. Not surprisingly, at the FINRA event, social media took center stage as questions were flying around the watchdog’s latest guidelines on social: Regulatory Notice 11-39. FINRA shed some light on what’s considered “static” (very first update or tweet), what’s considered “interactive” (subsequent updates or tweets), what firms need to be wary of when linking to third-party sites (adoption and entanglement), and what to do about personal devices (record all business-related communications). Although it’s great FINRA clarified those items, of course, there remain some gray areas.
The industry as a whole is still treading cautiously in the social media waters. The majority of folks that stopped by our booth still didn’t allow their reps to use social media for business purposes. Others allowed only limited access to the Big 3 (Facebook, LinkedIn, and Twitter). In fact, not one single firm permitted completely unfettered access. It’s obvious to me that the industry still needs some educating on the potential of social media and the potential of technology to effect change, thus creating a foundation on which to build additional revenues for the firm.
Compared to last year’s event, the industry is taking baby steps toward realizing the full potential of social and its power as a marketing tool. My gut feeling is that everyone at the event sensed the inevitable. They just wondered what the best way to go about it was. Similarly, they all agreed that social is an effective medium to reach lots of eyeballs, but because the event was heavily dominated by compliance and legal folks, conservatism ruled the day.
That sentiment was unequivocally reflected in the comments by Mitch Bompey of Morgan Stanley Smith Barney (MSSB). MSSB takes the approach of pre-reviewing ALL tweets, not just the initial one sent by the rep after s/he sets up her/his profile. FINRA’s position is that not every single tweet is considered “static,” just the very first one when the rep sets up her/his profile. FINRA leaves it up to the individual firm and its risk-based principles to decide how they want to treat subsequent tweets and updates.
I also heard several conversations regarding negative commentary. Best practice suggests that it’s up to the firms themselves how they want to handle it, so long as they retain records of the negative commentary and potential customer complaints. To many FINRA folks, leaving only positive comments up is a form of “recommendation,” i.e., by choosing to leave only positive comments up on a firm’s site is an implicit recommendation.
Finally, the explosion in smartphone usage was cited several times. Per 11-39, business communications done through smartphones, tablets, and other similar devices need to be retained, even if they are personal devices. The blending of personal and professional communications is no more evident than in the use of these devices, and this remains one of those gray areas I alluded to earlier.
As usual, much was learned at the show as well as other events I’ve been at this fall, and I’m looking forward to see how firms, reps, and technology vendors react to this latest set of guidelines.
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