The FCA has published guidance on financial promotions in social media after detailed consultation with the industry.
The guidance makes a number of points, including:
- any form of communication through social media is capable of being financial promotion if it includes an invitation or inducement to engage in financial activity;
- all communications (including financial promotions) must be fair, clear and not misleading; and
- firms should consider the wide ranging audience available through social media platforms and should ensure that the original communication remains fair, clear and not misleading, even if this is ultimately viewed by a non- intended recipient (through retweeting, for example).
The following may assist in determining whether communication is fair and not misleading:
- requirements for firms to include risk warnings or other statements in promotions for certain products/services also apply to promotions via social media. Firms should balance the manner in which financial products and services are promoted, highlighting potential risks as well as benefits to consumers;
- assessing the appropriateness of using character-limited media (when promoting complex features of financial products or services);
- each communication (an individual tweet, for example) needs to be considered individually and comply with the rules. Sharing or forwarding by a third party does not “cure” any original non-compliance on the part of a firm; and
- firms have an obligation to implement an adequate system to sign off digital media communications. This sign-off should be by a person of appropriate competence and seniority within the organisation.
The guidance also confirms that in some cases it may be appropriate to signpost a product or service with a link to more comprehensive information, provided that the promotion remains compliant in itself.