Getting to “YES” on social media: 8 tips for developing a social media policy

With new media and ways of communicating increasing and regulatory and compliance challenges abound, it’s worth looking to expand our understanding of the role social media plays beyond the narrow label of advertising.

Social Media Marketing StrategyDuring a recent webinar featuring panelists from Ropes & Gray, Boston Financial and Xerox, there was discussion of the current regulatory environment for social media use by financial services companies and how to experiment while keeping risks to a minimum.

There are many social media pitfalls, but perhaps the largest is the “provide and pray” practice. This is when a business provides access to the technology and then prays that a community forms or interactions occur among followers in a beneficial way. The panacea is adoption of a Social Media Policy, a practice encouraged by FINRA and the SEC.

Here are 8 tips for adopting and overseeing a social media policy:

  1. Tailor and adopt a social media policy or policies to fit your firm, its business purposes, and the specific facts and circumstances of social media use.
  2. Ensure the policy/policies address which specific social media sites are permissible and if the firm’s solicitors can also use these sites.
  3. Take care in drafting policy. Violations of your firm’s policies could arguably be construed as violations of Rule 38a-1 of the Investment Company Act of 1940 or Rule 206(4)-7 of the Investment Advisers Act of 1940.
  4. Regularly review your firm’s social media policies and procedures.
  5. Monitor social media use via methodologies such as sampling, spot-checking, or lexicon-based, or a combination of methods.
  6. Take into account other securities laws such as insider trading, when designing social media supervision procedures.
  7. Develop a clear policy on employee use of personal devices to access personal social media accounts for business-related communications, taking into account labor law on acceptable limitations on employee speech. Test compliance regularly.
  8. Keep records of all communications to satisfy regulatory record-keeping obligations, including third-party posts referring to your business and deleted posts. Consider using third-party software to help.

Social media platforms are constantly changing, so your firm’s social media policy will always be a work in progress. Compliance shouldn’t hinder experimentation, but it’s crucial to devote appropriate compliance support. By having specific business goals for social media and understanding how compliance rules impact those goals, your firm will be better equipped to understand the risks and how to best navigate them.

Does your firm have a social media policy or policies? What has worked or hasn’t worked for you?



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