One of your employees has just tweeted: “I love ‘ABC Co.’ and I think it will double in value over the next two years!”

  • Have you ever set out (in writing) your firm’s expectations on what an employee can and cannot say on social media?
  • Do you have policies and procedures to oversee social media communication?

If you do not have good answers to the above questions, you may be exposed, particularly during a compliance audit.  

Your employees are likely using social media every day. Some employees may use social media for personal reasons while some may also use it to speak with clients. If the communication constitutes registrable activity, or if a reasonable person could interpret that communication as coming from a registrant firm, then regulators may take the view that the communication is subject to securities laws. More specifically, regulators may expect each communication to be “compliant” with CSA Staff Notice 31-325 Marketing Practices of Portfolio Managers

Keep in mind that an oversight program may be different from registrant to registrant depending on how a firm decides to leverage social media.