Belbey Blogs: Recent Guidance from the SEC on Filing Social Media

Today’s blog is from Joanna Belbey, Social Media and Compliance Specialist at Actiance.

This month, the Division of Investment Management of the Securities and Exchange Commission issued the first in a series of “IM Guidance Updates” to clarify its positions on emerging legal issues. The first topic was social media.

Financial services firms are cautious by nature, and its both our experience and no surprise, that firms are taking a very conservative approach and are filing a huge amount of social media content with FINRA. The SEC is calling out that this may be unnecessary in a number of cases.

First some background. To ensure that communications from financial institutions are suitable, fair and balanced, the FINRA Advertising Regulation Department reviews the content of more than 100,000 communications every year. Some communications are submitted as required by FINRA rules, others are submitted voluntarily. Some are filed in advance, others within 10 days of publication. However in FINRA Rule 2210(c)(7)(M), effective February 2013, retail communications posted on an “online interactive electronic forum that is contained on a social media website” are specifically excluded from these filing requirements.

However, as firms have other filing requirements aside from FINRA, such as Section 24(b) of the Investment Company Act of 1940 (“1940 Act”) or Rule 497 under the Securities Act of 1933 (“1933 Act”), SEC has seen fit to provide guidance on what should and should not be filed.

As the SEC states “Whether a communication need be filed depends on the content, context, and presentation of the particular communication”. So nothing changes there. This is simply reiteration. But now the SEC goes a little further. The more specific, the more likely it needs to be filed. And as an aside, whether the communications are filed or not, they still need to captured, supervised, archived, made e-discoverable like any other written communication for “business as such”.

The SEC provided some examples for clarity:

Do Not File

• Simple mention of a specific investment company or family of funds without discussion of merits
• Mention of word “performance” in connection with a specific investment company or family of funds without mention of returns
• Factual introductory statement / hyperlink to fund prospectus (ie, report available here)
• An introductory statement not related to investment merits of a fund that includes hyperlink to general information
• Response to an inquiry via social media that provides factual information and does not include merits of the fund

File (to meet requirements of Section 24(b) or Rule 482):

• Discussion of fund performance that provides specific mention of fund’s returns
• Issuer communications that discuss merits of an investment fund

The regulators continue to reinforce what we know to be best practices of social media. Pitching financial products, and discussing specific performance and returns is unwelcome on social media and may require pre-approval by a registered principal of the firm as well as filing requirements.

A better approach?

Provide compelling content, not sales pitches. Offer information that is informative, entertaining, and worth sharing. In a compliance-constrained industry like financial services, delivering compelling content can be challenging, but it’s by no means impossible.

The first step is to inventory your existing content to see what can be leveraged for social media. Start with pre-approved content that has been reviewed by the company’s compliance team for both corporate governance and regulatory compliance. Use this content to develop a library of interesting insights on investment strategies, wealth management, saving for college or retirement, and similar topics. These articles can provide a foundation for social media newcomers who are looking to start building their online networks.

This Spring is a great time to get started!

Other information you may find helpful:

Belbey Blogs: New FINRA Communications Rule 2210

http://blog.actiance.com/2013/02/13/belbey-blogs-new-finra-communications-rule-2210/

Division of Investment Management of the Securities and Exchange Commission Issues Guidance Update on Social Media Filings by Investment Companies

http://www.sec.gov/news/press/2013/2013-40.htm

IM Guidance Update March 2013

http://www.sec.gov/divisions/investment/guidance/im-guidance-update-filing-requirements-for-certain-electronic-communications.pdf

FINRA Rule 2210

http://finra.complinet.com/en/display/display_main.html?rbid=2403&element_id=10648

Regulatory Notice 12-29 Communications with the Public

http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p127014.pdf

Regulatory Notice 10-06, Social Media Web Sites: Guidance on Blogs and Social Networking Web Sites (January 2010)

http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p120779.pdf

Guide to the Web for Registered Repre­sentatives

http://www.finra.org/Industry/Issues/Advertising/p006118

FINRA: RCA – March 1999 – Ask the Analust – Electronic Communications

https://www.finra.org/Industry/Regulation/Guidance/RCA/p015326

 

 

 

What to do when social goes bad: The Lesson of HMV

It’s been a momentous day in the Twitterverse for HMV.  (For those of my US colleagues, who don’t know the brand, here’s a snapshot – from Wikipedia.. if you want more, click on the links).

HMV Group PLC is a British multinational entertainment retailing company with operations in the United Kingdom, Hong Kong and Singapore. It was listed on the London Stock Exchange and was a constituent of the FTSE Fledgling Index. The first HMV branded store was opened by the Gramophone Company on Oxford Street in 1921, and the HMV name was also used for television and radio sets manufactured from the 1930s onwards.

HMVSite Down

Now I had to go to Wikipedia to tell you more about HMV, because the company was put into administration on January 15^th, as you can see from this is all I get at www.HMV.com

As if that isn’t bad enough, what took place on Twitter earlier today should give any senior management team cause for social cold sweats.  Normally it’s great for the brand when you’re live tweeting an event (like we did recently at #IBMConnect)

But I’m not sure anyone has tweeted their own sacking before.  That’s right.  Just before 130pm local time, HMV’s official and verified Twitter account sent out the following: “We’re tweeting live from HR where we’re all being fired! Exciting!! #hmvXFactorFiring“.

This tweet went viral with over 1,300 retweets in 30 minutes.

This tweet was followed by 7 others, which told the social world what was going on.

Posts such as: “There are over 60 of us being fired at once! Mass execution, of loyal employees who love the brand. #hmvXFactorFiring” and, “Sorry we’ve been quiet for so long. Under contract, we’ve been unable to say a word, or -more importantly – tell the truth #hmvXFactorFiring.” Went out.  And a little bit like car crash TV, we all watched.

Here’s the one that really consolidated for me the difference between those who “get” social and those who don’t.  “Just overheard our Marketing Director (he’s staying, folks) ask “How do I shut down Twitter?” #hmvXFactorFiring.”

It gets worse.  Several hours later the offending tweets disappeared from the @HMVtweets feed.

Not, though before you could pick them up on places like Topsy – the news and screenshots of the offending tweets have been trending through the Huffington Post, CBS and Business Week here in the US, and the story continues.

You can see more write ups of the story at Holtz Communications, TwoFourSeven and I found the news out  through superstar @rhappe tweeting it (follow her, she’s great for breaking news like this)

So what can you do to make sure that #hmvXfactorFiring doesn’t end up at your door?

• Social has GOT to be part of any crisis management communications plan.  Period.
• Make sure ownership of your Corporate Social Network Accounts is with a group that is part of the planning.
• Transparency is key.  If you spin, lie or cheat, you will be found out.
• Deleting content, while it might be necessary sometimes (racist commentary, profanity and the like that you do NOT want on your Twitter feed have no place staying there in order to be transparent) should be undertaken with caution.
• If you do delete content, make sure you have a record of it.  You can be sure that the rest of the world already does.
• Engage, understand the mood and the sentiment of the audience and go with it.  Empower the team responding to do just that.  Respond.

What else would you add to how you can deal with social in a crisis?

Avoid the Social Ghost Town: Five Tips

I’m presenting one of Actiance’s regular education webinars this morning, my topic is personal brand and how you can use social to build and maintain it.  I’m checking my slides, working through my commentary and I get to my section on establishing a brand presence.  The final bullet point on this slide is “No Ghost Town Here” and that makes me think that that’s actually one of the most important points about building a brand on social.

You’ve got to be consistent.  What point is there in building a community, building a brand and then letting it fall fallow, go to waste and have no content?  Building a brand is HARD WORK.  It takes a heck of a lot of time, commitment and often a lot of money.  Building a brand that is engaged and engaging is harder. And it takes serious commitment to maintain.  If you’re not serious about that, then I question that you’re serious about the rest of your life/business.

By the time you read this, I’ll no doubt have delivered my webinar (its 0900 pacific and you can register here, if you do perchance read this in time), but fear not dear reader, we’ll be recording the session, and as with all our educational webinars, we run them live at a minimum every two weeks, so you can listen to the dulcet tones of one of the Subject Matter Experts here at Actiance, and ask us questions live on air!

However, I’m taking this opportunity to share some tips on how to avoid your brand becoming the social ghost town:

1. Commit.  You can’t be half committed to social.  you’re either in, or you’re not.  So either commit the time, or don’t.  Be realistic about your commitment.  If you’re only going to share content once a month, then, really, Twitter probably isn’t the place for you.  Actually if you’re not going to engage with your friends, followers and connections, then consider if social is the right space for your brand at all.. if you want to lurk, you can do that anonymously.
2. Have a plan.  I know I should start this with strategy, but lets assume you have that.  Now get tactical and look at what you’re going to share, how you’re going to engage and with what.
3. Sort your content out.  Content is hard work.  So you need to look up to bullet point one, and then build content into that.  And this isn’t as hard as it first looks.  Every business has content.  Fair enough it might not be in 140 characters of less, but you’ve definitely get content, and face it with 140 characters, you’re cutting it down, not adding to it!
4. Associate your brand.  You know the values that you want your brand to have (whether your brand is a personal or a corporate brand), so associate it with like brands – re tweet, re purpose, share blogs, follow news feeds.   If you ask yourself the question “should I retweet this?”, then the answer is NO.  Associate your brand ONLY with those that will reflect well on you.
5. Crowdsource:  Work through my list.  If you associate your brand effectively you will find other good content.  Facebook, LinkedIn, Twitter and the thousand other networks out there let you collectively share content, so look for what’s popular, what resonates with your network and your aspirations and work that crowd (baby).
6. Darn it, I said five in the subject right?  ok this is the bonus point.  And to my mind its often forgotten and missed in our desire to see our Klout score go up and our Kred extend… LISTEN.  (sorry, don’t mean to shout.. but sometimes, over all the noise, on social listening, and THEN engaging is the most important thing we can do.

What did I miss?  What’s your tip for ensuring your brand doesn’t become a social ghost town?

PS:  My graphic today comes from Bodie State Park, California – a ghost town apart from the park rangers, and well worth the trip, its a superb state park with some great stories!