On August 18, 2011, FINRA issued Regulatory Notice 11-39 to provide additional guidance on the application of FINRA rules governing communications with the public to social media sites. The notice was provided to address a number of questions that FINRA received regarding recordkeeping, supervision, third-party posts/links on firm websites and accessing social media sites from personal devices following Regulatory Notice 10-06, which provided initial guidance on member firms‟ use of blogs and social networking websites. Specifically, the Notice provides for the following:

  • A firm‟s responsibilities under NASD Rule 3010 require the registered principal to review, prior to use, any social media site that an associated person intends to employ for a business purpose. The registered principal may approve use of the site for a business purpose only if the principal has determined that the associated person can and will comply with all applicable FINRA rules, the federal securities laws and all recordkeeping requirements.
  • Firms may not establish a link to any third-party site that the firm knows or has reason to know contains false or misleading content. FINRA notes that a firm is responsible under NASD Rule 2210 for content on a linked third-party site if the firm has “adopted” or has become “entangled” with the content on the third-party site. In addition, firms may delete inappropriate third-party content without being considered to have adopted such content.
  • Firms must adopt procedures to manage data feeds that are incorporated into their own websites. At a minimum, these procedures should include being familiar with the proficiency of the vendor supplying the data and its ability to provide data that is accurate as of the time it is presented on the firm‟s website. Firms must also understand the criteria employed by such vendors in producing the data they provide in order to determine whether the vendor is producing information in a reasonable manner.
  • For purposes of recordkeeping, the fact that a communication is transmitted using a personal device or technology has no bearing on whether the firm must maintain a record of the communication. In determining whether a particular communication is subject to recordkeeping requirements, firms should only look to whether a communication relates to its “business as such,” not the manner in which the communication is disseminated.
  • Firms may not sponsor a social media site or use a communication device that includes technology that automatically erases or deletes content.
  • Firms must conduct appropriate training and education concerning their policies, including those relating to social media.