The use of social media, such as Facebook, MySpace, LinkedIn, and so forth, is widespread for both work and personal purposes. While social media can foster connections between colleagues, employees, and friends, and allow the sharing of information quickly, the information posted to social media is in the public domain and may reflect on the business of investment advisers and the mutual funds that they manage. To ensure that the use of social media does not negatively affect the adviser and the funds, the adviser should adopt a social media policy.

While a social media policy must be tailored to each investment adviser and the mutual funds that it manages, there are some key items that any such policy should address:

  • The policy should provide that supervised persons of the investment adviser, as well as any supervised persons of the mutual funds, are not permitted to divulge the name of the adviser or the fund or their position on social media, except for professional networking sites (e.g., LinkedIn).
  • If a supervised person elects to use the name of the investment adviser or the mutual funds on LinkedIn and identifies himself or herself as an employee of the adviser or the funds, the policy should provide that they must refrain from (1) making any disclosures that may harm the adviser or the funds, (2) misrepresenting their job title or position, or (3) posting negative comments. This should include not permitting “online friends” to post comments or recommendations to a supervised person's social media, which may include the comments/recommendations of current and former employees of the adviser or the funds.
  • The policy should provide that supervised persons of the investment adviser and the funds are prohibited from providing a referral, reference, or endorsement for current or former employees of the adviser or the funds.
  • The policy should provide that supervised persons of the investment adviser or the mutual funds should not use the e-mail function on any social media site when communicating information that would be required to be retained under securities laws.
  • The policy should prohibit the posting of any privileged or non-public information on social media about both the advisers' business activities and clients or any business activities of the funds.

As an additional safeguard, the social media policy may provide that any information that a supervised person intends to place on social media about the investment adviser or the mutual funds must be pre-approved by the chief compliance officer or his or her designee. In any event, the chief compliance officer or his or her designee should regularly review any information that supervised persons are placing on social media about the adviser or the funds.