Re-tweets, Re-posts and Likes are Subject to FINRA’s Digital Communication Rules
FINRA recently released their third regulatory notice around social media and digital communications. The notice “provides guidance regarding the application of FINRA rules governing communications with the public to digital communications, in light of emerging technologies and communications innovations.”
A couple of the Q&A responses listed in the latest regulation notice are particularly interesting to me. The first two listed below explain that if an advisor shares or likes content from an independent third party, the advisor is in turn, subject to the same regulation as if the advisor had created the content themselves.
The last Q&A response I found noteworthy is in regards to native advertising. Not surprisingly, firms that engage in native advertising must make sure it is clear to the consumer that the native advertising is advertising material. Therefore, the advertising firm must make sure that their name is prominently displayed and that the relationship between the firm and other entities is evident.
Q&As from the latest regulatory notice:
“Q3: If a firm shares or links to specific content posted by an independent third-party such as an article or video, has the firm adopted the content?
A: By sharing or linking to specific content, the firm has adopted the content and would be responsible for ensuring that, when read in context with the statements in the originating post, the content complies with the same standards as communications created by, or on behalf of, the firm.
Q9: A third party may post unsolicited favorable comments about a registered representative on the representative’s business-use social media website. The representative may then like or share the comments. Under these circumstances, are the third-party comments deemed to be a communication of the representative and, therefore, subject to FINRA’s communications rules?
A: By liking or sharing the favorable comments, the representative has adopted them and they are subject to the communications rules, including the prohibition on misleading or incomplete statements or claims, the testimonial requirements noted above, and the supervision and recordkeeping rules.”
Q6: Native advertising has been defined as content that bears a similarity to the news, feature articles, product reviews, entertainment and other material that surrounds it online. For example, native advertising may be a video or article posted by an advertiser on an independent third party publisher’s site that is presented alongside, and in a manner similar to, content posted by the publisher. Is native advertising inherently misleading under FINRA’s communications rules?
A: Firms may use native advertising that complies with the applicable provisions of FINRA Rule 2210, including the requirements that firms’ communications be fair, balanced and not misleading. In particular, native advertising must prominently disclose the firm’s name, reflect accurately any relationship between the firm and any other entity or individual who is also named, and reflect whether mentioned products or services are offered by the firm as required by Rule 2210(d)(3).
 In Regulatory Notice 11-39, FINRA stated: “The fact that the firm has a policy of routinely blocking or deleting certain types of content in order to ensure the content is appropriate would not mean that the firm had adopted the content of the posts left on the site. For example, most firms using social media sites block or screen offensive material. Such a policy would not indicate that the firm has adopted the remaining third-party content.”
 See also guidance provided in the FTC’s Enforcement Policy Statement on Deceptively Formatted Statements