In the UK, the Financial Conduct Authority (FCA) has released a guidance consultation paper outlining its supervisory approach to financial promotions in social media. This guidance contains no rules or record keeping requirements but is a useful summary of relevant rules and an indication of FCA’s supervisory expectations. The paper is intended to help firms understand how they can use social media and meet the FCA’s financial promotion and record-keeping rules. The five main tenets of the guidance include:
- Follow the basic rule: Be fair, clear and not misleading.
- Under the FCA definition, any form of communication, including social media, has the potential to be considered a financial promotion—if it includes an invitation or incentive to engage in financial activity.
- Firms should make consumers aware of the potential benefits and risks of a financial product.
- Each tweet, Facebook post, web page or other social communication needs to be considered individually, and must comply with the relevant rules.
- Firms are responsible for their own communication, but not for messages included in a social media share or forward of their communication. If a consumer re-tweets a firm’s tweet, responsibility lies with the communicator, not the firm.