On April 25, 2017, the Financial Industry Regulatory Authority, Inc. (“FINRA”) released a Regulatory Notice titled Social Media and Digital Communications: Guidance on Social Networking Websites and Business Communications  (the “Notice”) that is intended to provide further guidance regarding the application of the FINRA rules governing communications with the public to FINRA member firms’ use of social media sites.
In discussing its reasons for issuing the Notice, FINRA notes that in connection with its retrospective review of the communications rules,  industry participants had suggested additional guidance was necessary with respect to the application of the communications rules to social media sites. Moreover, FINRA also comments on the general increased use among adults of social media sites and the frequency of social media and other sites to facilitate the use of native advertising,  which has resulted in member firms increasingly raising questions regarding the application of FINRA rules to the use of social media and other forms of digital communications.
The Notice summarizes previously existing FINRA guidance related to member firms’ social media usage in the following areas:
In a question and answer format, the Notice then provides guidance on a number of topics. We have summarized the guidance on certain topics below:
The Notice also clarifies that a member firm may use native advertising under certain conditions as long as it complies with FINRA Rule 2210. It also provides guidance regarding correcting third-party content without adopting the content and the requirements for BrokerCheck references and links when using social media.
In conclusion, the Notice highlights FINRA’s interest in addressing industry concerns related to the increased use of social media sites and other digital communications by its member firms. We note, however, that uncertainties remain and we hope to see additional guidance on this topic in the future. FINRA member firms should consider reviewing their policies and procedures in light of the guidance contained in the Notice.
 FINRA, Regulatory Notice 17-18, Social Media and Digital Communications: Guidance on Social Networking Websites and Business Communications (April 2017), http://www.finra.org/sites/default/files/notice_doc_file_ref/Regulatory-Notice-17-18.pdf.
 FINRA, Retrospective Rule Review Report (December 2014), https://www.finra.org/file/retrospective-rule-review-report-communications-public.
 The Notice defines “native advertising” as advertising content that matches the form and function of the platform on which it appears.
 FINRA Regulatory Notice 10-06, Social Media Web Sites: Guidance on Blogs and Social Networking Web Sites (January 2006), http://www.finra.org/sites/default/files/NoticeDocument/p120779.pdf.
 FINRA Regulatory Notice 11-39, Social Media Websites and the Use of Personal Devices for Business Communications: Guidance on Social Networking Websites and Business Communications (August 2011), http://www.finra.org/sites/default/files/NoticeDocument/p124186.pdf.
 FINRA Rule 2210 is the primary advertising regulation which governs broker dealers' communications with the public, including communications with retail and institutional investors. Rule 2210 outlines standards for the content, approval, recordkeeping, and filing of communications with FINRA, http://finra.complinet.com/en/display/display_main.html?rbid=2403&element_id=10648.
 The Notice defines “ongoing” as (1) the link is continuously available to investors who visit the member firm’s site; (2) investors have access to the linked site whether or not it contains favorable material about the member firm; and (3) the linked site could be updated or changed by the independent third party and investors would nonetheless be able to use the link.