SEC Issues Social Media Guidelines For Investment Companies


The SEC had social media buzzing again.  In March, the agency issued updated social media guidelines for investment companies use of sites like LinkedIn, Twitter, and Facebook.  They specifically address the obligation to seek SEC review of materials posted on companies’ social media sites under the filing requirements of Section 24(b) of the Investment Company Act of 1940 and Rule 497 under the Securities Act of 1933.

Apparently, many mutual funds and other investment companies were filing materials posted on their social media sites with FINRA unnecessarily.   The new guidance provides examples of the kinds of communications that should be filed with FINRA as well as examples of communications that would not trigger a filing requirement. The bottom line is that most materials do not have to receive pre-clearance from FINRA.

Only posts specifically discussing fund performance or promoting a fund’s investment merits should be filed for review.  

 The SEC provides the following examples of communications that generally should be filed pursuant to Section 24(b) or Rule 497:

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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