social media compliance for financial services 2013 by limra
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Social Media Compliance for FinServ in 2013Stephen SelbyLIMRA ServicesDirector, Regulatory Services
© LL Global Services Inc. 2013
Why Social Media
Why Social Media?
How will your business use social media?
Three Kinds of Communications
• Correspondence
• Retail Communications
• Institutional Communications
Filing ExemptionsFINRA 2210(c)(7)(M)
(M) Retail communications that are posted on an online interactive electronic forum.
What is an “Online Interactive Forum?”
Static Interactive
ProfileOnline Interactive
Forum
Content Standards Still Apply• General Standards
• Comparisons
• Disclosure of Members Name
• Tax Considerations
• Disclosure of:o Feeso Expenses and o Standardized Performance
• Testimonials
• Recommendations
• Prospectuses Filed with the SEC
Not so fast… Research Reports(D) The requirements of paragraph (b)(1)(A) shall not apply with regard to the following retail communications, provided that the member supervises and reviews such communications in the same manner as required for supervising and reviewing correspondence pursuant to NASD Rule 3010(d):
(i) any retail communication that is excepted from the definition of “research report” pursuant to NASD Rule 2711(a)(9)(A), unless the communication makes any financial or investment recommendation;
(ii) any retail communication that is posted on an online interactive electronic forum; and
(iii) any retail communication that does not make any financial or investment recommendation or otherwise promote a product or service of the member.
Not so fast… Other regulators• SEC Books and Records Retention Rules
• RIA Testimonial rules are unchanged
• MSRB
• CBOE
• Department of Labor
Privacy and Social Media
• State Laws
• Personal vs. Business Profiles
• How do we distinguish in a time of BYOD (bring your own device)?
27 States!Arizona California Colorado Connecticut
Georgia Hawaii Illinois Iowa
Kansas Maine Maryland Massachusetts
Minnesota Mississippi Missouri Montana
Nebraska New Hampshire New Jersey New Mexico
New York North Dakota Rhode Island Texas
Utah Vermont Washington
http://www.ncsl.org/issues-research/telecom/employer-access-to-social-media-passwords-2013.aspx
27 States have either enacted or
have pending laws intended
to protect employees'
personal use of social media!
What does this mean for supervision?
JOBS Act• FINRA Regulatory Notice 12-34• Jumpstart Our Business Startups Act
The crowdfunding provisions of the JOBS Act provide an exemption from registration under the Securities Act of 1933 (Securities Act) for securities offered by issuers in amounts of up to $1 million over a 12-month period provided that the amount raised from any single investor adheres to strict limits (ranging from $2,000 to $100,000) based on the investor’s annual income or net worth.The crowdfunding exemption establishes specific eligibility and sales practice standards for issuers and intermediaries that engage in crowdfunding. Intermediaries that seek to engage in crowdfunding must be registered as a broker or a funding portal, a newly created entity.
Why is the JOBs Act Scary?
• Selling Away
• Due Diligence
• Conflict of Interest
• Form BD
The Future of Social Media• Supervision
• Content
• New sites
• Mobile
• “C” clients and self service?
Practical Social Media• System of Supervision
• Based on:• Business needs as defined by• Business use cases
o Marketingo Connecting
• Electronic surveillance
• Auditing• Virtual• In person
2013 Social Media Conference for Financial Services
8/21/2013 - 8/23/2013
Hyatt Regency, Boston, MA
Now In Its 4th Year!
Q & A
Stephen SelbyDirector, Regulatory Services
LIMRA Services, Inc.
T. 860-285-7858
sselby@limra.com
@limra_crs
http://www.facebook.com/llsmc
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