The UK Financial Conduct Authority (“FCA”) has recently released a finalized guidance addressing the promotion of financial products through social media channels and customer communications.
Recognizing social media (e.g. blogs, microblogs, social and professional networks, forums, image and video-sharing platforms) as a powerful channel of digital communication, the guidance addresses the core principles that apply to financial activities which are made in the course of business:
- The promotion should be identifiable as such (this can be done by labeling the promotion, or it may be clear from the context); the FCA clarified, in this regard, that hashtags are not an appropriate way to identify promotional content (e.g. #Ad);
- The promotion should be clear, fair and not misleading, disclosing adequate performance information and any relevant risks in a prominent manner; it is recommended, in this regard, to signpost a product or service with a link to more comprehensive information, provided that the promotion remains compliant in itself, or through the use of images which satisfy the character limitation;
- The guidance summarize the core business rules concerning image advertisingapplicable for different sectors;
- Firms should take steps in labeling and targeting of communications to mitigate the risks associated with forwarding or sharing (e.g. retweeting) a promotion to a non-intended audience; The FCA clarified that under certain circumstances, sharing and forwarding may be perceived as a financial promotion;
- Firms should adhere to the applicable rules for making unsolicited promotions;
- Firms should adhere to the applicable rules concerning record keeping, and adopt a risk management approach;