Social Media Hot Topics

There have been a lot of discussions lately regarding the regulatory landscape in the financial services sector. I know everyone has Dodd-Frank on the mind these days; however another significant hot topic is Social Media. It is a topic of discussion at every conference I have attended this year.

Over the last couple of months the IIROC (Investment Industry Regulatory Organization of Canada) has issued their guidance on social media, FINRA announced their examination priorities for 2011 and the SEC sent our sweep letters regarding the use of social media. It’s clear with all the attention social networking has generated that it is not a fad that’s going away and the regulators are serious about making sure it’s done in a compliant manner.

So what does it mean when I say “in a compliant manner”? Well first and foremost it means that you have policies and procedures that are reasonably designed to supervise and train your representatives and staff about how to use or not use social media sites. One thing that has been made perfectly clear is that a policy that says you do not allow social networking and attestations from your representatives stating they do not use social media is not considered sufficient by the regulators.