Earlier this month, the FCA issued its final guidance on the use of social media by financial firms, but the revised rules do not seem to have made the situation much clearer.
The bulk of the revisions centre around the FCA's decision to drop the requirement for financial firms to use #ad in financial promotions. The regulator fears clicking a hashtag will take a reader to a list of potentially unrelated topics which all use the same tag.
This seems like a fair assessment, but the use of #ad was hardly the most crippling of all the suggestions made by the FCA in relation to social media, so abolishing it is unlikely to make a meaningful difference to a firm’s social media policy.
Meanwhile, the majority of the requirements remain the same, and clarification is still lacking. The FCA says promotions on social media should be “clear, fair, and not misleading”, but what this actually means in practice seems to have been left largely for providers to decide on a case-by-case basis.
Aiming tweets at journalists rather than consumers could be one way to avoid falling foul of the regulator
The regulator also does not clarify exactly what kind of record groups should keep of their social media activity, saying this only applies to “significant communications”, which could be interpreted in many ways.
If anything, the clarifications have put even more pressure on compliance departments; not only do they have to worry about their company’s own tweets, but even retweeting anything that is not compliant will be considered an offence.
Importantly, the problem still remains that groups will not have much space left for content in each individual tweet, considering they will still be required to include a raft of risk warnings, even if these are already present on the page to which the tweet links.
When firms’ social media policy was first addressed, regulatory consultancy Bovill pointed out groups will only have 40 characters to play with after all the necessary risk warnings are included, and removing one hashtag will not have much impact.
The FCA’s response is firms should “consider the appropriateness” of using character limited media to promote complex features of financial products or services, which sounds almost like discouraging them from using Twitter altogether.
Aiming tweets at journalists rather than consumers could be one way to avoid falling foul of the regulator – for example, BlackRock launched a Twitter account specifically for UK journalists in January: @BlackRockUKNews. So there is hope yet the rules will not spell the end of social media for financial firms, but their strategy in this area certainly requires a lot more consideration than may have been necessary in the past.
