By James Watson, President and CEO
August 16, 2010 - 5:39 PM
Last week I left you with some good information about the types of rules that that the Financial Industry Regulatory Authority (FINRA) has issued to securities firms as guidance on the use of social media; see FINRA - Regulatory Notice 10-06. And if you were really paying attention, you realize that this guidance makes a good starting point for drafting social media policies and procedures, no matter what industry you’re in.
This week, I want to take up the section of the FINRA guidance that deals with static vs. interactive content and functionality. It’s a distinction worth making, and – once again – it applies to what many businesses are thinking about doing with social media, particularly corporate blogs.
A corporate blog can help to extend the company image; it’s also a way of opening up communication internally (with employees) and externally (with customers, suppliers, and partners). But it’s exactly this function of “public communication” that opens up certain risks. Organizations must make sure the content posted to their blogs complies with all applicable regulations – regulations which, in the financial services industry, are stringent, given they’re intended to protect investors from false or misleading claims and representations.
It’s this idea of investor protection that’s at the heart of FINRA’s distinction between static and interactive content and functionality.
Staticcontent includes profile, background, or “wall” information. Static blog postings on a firm’s sponsored blog are considered “advertisements,” and as such, they require approval by a principal of the firm, prior to posting. (Firms may use an electronic system to document these approvals.)Static content is generally accessible to all site visitors.
Interactivecontent includes real-time interactive communications, such as Twitter and Facebook posts; on a corporate blog, this would likely be content generated in real-time interaction with customers or prospective customers. The interactive part of the post constitutes what FINRA calls an “interactive electronic forum”; firms are not required to have a registered principal approve these communications prior to use. But once again, in the interest of protecting the investor, firms must supervise these interactive electronic communications; they’re considered analogous to unscripted participation in, say, a chat room or online seminar, under NASD Rule 2210. To this end, supervisory procedures must be in place for interactive content – e.g. procedures that require principal review of some or all interactive electronic communications prior to use, or a post-use review, based on sampling and lexicon-based search. Once again, the idea is to protect the customer from being given false or misleading information in a blog post.
All of this is by way of saying that as you begin to outline your organization’s social media strategy, your legal and compliance people need to have a seat at the table. (And a good seat, too – from Day One.) What do you envision as the mix of static versus interactive content on your corporate blog? What supervisory procedures does your organization need to have in place before the first blog post goes up on your site? And (getting back to last week’s topic) how do you craft social media policies and procedures, and make sure that content from social media sites is subjected to proper retention and disposition?
If you’re just now doing a thermometer dip on social media, I recommend putting together a long-term strategy to map out your go-forward approach to social computing technologies – and to make sure you nail down all these other considerations as part of the roll-out.
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