FINRA Notice on Social Media


FINRA, the Financial Industry Regulatory Authority, is a private corporation which issues regulations for American securities firms. FINRA Regulatory Notice 10-06 provides guidance regarding the use of social media sites. It was issued in January 2010.

The notice makes reference to NASD Rule 3110, which imposes record retention requirements on securities firms, as noted in the Tip of the Night for September 24, 2017. The notice refers to processes by which social media posts can be retained.

"FINRA is aware that some technology providers are developing systems that are intended to enable firms to retain records of communications made through social media sites. Some systems might interface with a firm’s network to capture social media participation and feed it into existing systems for the review and retention of email. Other providers are developing technology that might permit a registered representative working off-site to elect to access social media through platforms that will retain the communications on behalf of the firm."

Lawyers representing securities firms should question their clients as to whether or not they have implemented software systems that automatically archive social media posts, and if they can be accessed for electronic discovery. The notice also refers to the fact that securities firms maintain databases for templates to be used for social media posts that they require their employees to adhere to. The collection of such templates (as well as tracking if they were departed from) can be an important part of the e-discovery process.

Registered principals must approve 'static content' on social media sites, but they do not have to make all 'interactive' communications on sites like Facebook and Twitter.


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