Financial Promotions – Social Media

The use by firms of ‘social media’ e.g. Facebook, Twitter etc. has come under the FCA microscope with the publication of Finalised Guidance FG15/4  (“Social media and customer communications“).

From the outset the Guidance makes it clear that whilst the FCA does not want to prevent their use – and indeed acknowledges that they can be powerful channels of communication – it does want firms to remember that although they may be in a digital format they can be ‘customer communications’ and, potentially, ‘financial promotions’.  The Guidance emphasises that “a promotion is a promotion”. This is not the first time that the Regulator has raised the issue of ‘digital media’ e.g.  a speech in 2012 (see Regulatory Roundup 45) reminded us that the financial promotion rules are media-neutral i.e. the rules focus on the content regardless of the medium used to communicate that content.

For those firms considering using social media the Guidance provides several illustrated examples of compliant and non-compliant tweets and banners and suggests the use of image insertion to overcome any problems that might be associated with character limitation. It also provides guidance when such communications are forwarded, for instance a tweet intended for another authorised person which is retweeted to a retail customer.

However, despite its title, firms that have no immediate plans to use such media will find the Guidance a useful addition to their reference material.  By way of example, the discussion on the use of (compliant) links to websites within a tweet (para 1.13) can be equally relevant to a firm’s website which contains links to other pages of the site.  Elsewhere the Guidance provides commentary on the meaning of, and the relevance of, “in the course of business“; the benefits of image advertising (e.g. it is exempt from most of COBS 4) and the importance of balance in terms of risk and reward.