On the matter, Clive Adamson, Director of Supervision at the FCA said: “The FCA sees positive benefits from using social media but there has to be an element of compliance. Primarily, what firms do on social media must ensure customers are at the heart of their business.
After extensive discussions with industry firms the regulator has published a consultation on its approved approach to social media.
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div>After extensive discussions with industry firms the regulator has published a consultation on its approved approach to social media.
On the matter, Clive Adamson, Director of Supervision at the FCA said: “The FCA sees positive benefits from using social media but there has to be an element of compliance. Primarily, what firms do on social media must ensure customers are at the heart of their business.
On the matter, Clive Adamson, Director of Supervision at the FCA said: “The FCA sees positive benefits from using social media but there has to be an element of compliance. Primarily, what firms do on social media must ensure customers are at the heart of their business.
“Our overall approach is that financial promotions, whether on social media or traditional media, should be fair, clear and not misleading. We have had extensive industry engagement on this issue and we believe our guidance is a sensible approach that doesn’t affect industry’s ability to innovate using new forms of media. We recognise social media are constantly evolving. We, therefore, welcome feedback to today’s consultation and look forward to continuing the discussion with industry.”
The body states that firms should consider the appropriateness of character-limited media, such as Twitter, as a means of promoting complex features of financial products or services.
The consultation paper sets out in further detail specific areas that firms need to consider, and provides some solutions and illustrative examples.
These include:
These include:
· Promotions for investment products - There is a specific requirement that financial promotions for investment products are identifiable as such. The FCA’s view is that – for social media in particular – it is important that, in all cases, it is clear that a promotion is a promotion. One generally accepted way to do this, for character-limited media, is the use of #ad in online posts.
· Stand-alone compliance - Each communication (e.g. a tweet, a Facebook insertion or page, or web page) needs to be considered individually and comply with the relevant rules.
· Risk warnings and other required statements - Firms are reminded that there are requirements to include risk warnings or other statements in promotions for certain products/services.
These rules are media-neutral and therefore apply to social media as they would to any other medium. When taken into account with the supervisory approach to standalone compliance, this poses particular challenges for the use of character-limited social media.
One solution to the problem of character limitation is to insert images, such as infographics into tweets, which allows relatively unrestricted information to be conveyed. However, where the financial promotion triggers a risk warning or other information required by our rules this cannot appear solely in the image.
These rules are media-neutral and therefore apply to social media as they would to any other medium. When taken into account with the supervisory approach to standalone compliance, this poses particular challenges for the use of character-limited social media.
One solution to the problem of character limitation is to insert images, such as infographics into tweets, which allows relatively unrestricted information to be conveyed. However, where the financial promotion triggers a risk warning or other information required by our rules this cannot appear solely in the image.
· Image advertising – The FCA reminds firms that it remains possible to advertise their presence in the market through ‘image advertising’ in a way which is unlikely to present difficulties with character limits.
The FCA developed this proposed guidance following engagement with other regulators both in the UK and overseas and other interested stakeholders. The FCA has also had significant contact with industry over the course of the last year to better understand their concerns around the use of social media.
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