Financial services social media

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  • Here is a great eBook which helps those in the financial services industry gain an understanding and get started with social media - 7 Steps to Social Media Success for Financial Advisors http://financialadvisorselfpromotion.com/
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Financial services social media

  1. 1. Financial Services & Social Media Review of FINRA Regulat Regulations and a Suggested Framework for Providing Guidance to Member Firms March 15, 2010
  2. 2. TABLE OF CONTENTS 1. Summary.....................................................................................................................................3 2. Introduction ................................................................................................................................4 3. Industry Perspective: Interactive Electronic Communications...................................................6 4. Industry Perspective: Responsibility for Third-Party Content ...................................................9 5. Industry Perspective: Supervision of Employees’ Social Media Use ........................................10 6. Social Media Perspective: Interactive Electronic Communications.........................................11 6.1. A Taxonomy of Social Media Venues................................................................................12 6.2. Characteristics of Interactive Electronic Communications...............................................13 6.2.1. Interactivity with Third Parties .................................................................................13 6.2.2. Real-time and Near-time Exchanges.........................................................................14 6.3. Virtual Appearances..........................................................................................................14 6.4. Electronic Communication................................................................................................15 7. Social Media Perspective: Responsibility for Third-Party Content...........................................16 7.1. Content Sharing ................................................................................................................17 8. Social Media Perspective: Supervision of Employees’ Social Media Use .................................18 9. Conclusion.................................................................................................................................20 Appendix A: Summaries of Social Media and Related Venues.........................................................22 About the Author..............................................................................................................................38 Endnotes ...........................................................................................................................................39 Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 2
  3. 3. 1. SUMMARY The Financial Industry Regulatory Association (FINRA) has – since 2003 – been providing intermittent guidance on the use of social media for its more than 4,700 member firms. In September 2009, they set up a Social Networking Task Force to try and develop more comprehensive regulations. However, they have yet to provide enough guidance for many financial services companies to feel comfortable using social media as a means of marketing to prospects and communicating with existing clients. This white paper provides an overview of:  the rulings, to date, from FINRA that relate to social media,  the input submitted to FINRA by several member firms on issues regarding social media and organizes that information into three categories:  Interactive Electronic Communications  Third-Party Content  Supervision of Employees’ Use of Social Media This paper also provides an overview of all social media and related interactive venues, including detailed descriptions of all these categories. It offers a way to assess each of these categories along key criteria to determine if it qualifies as Interactive Electronic Communications, plus addresses the phenomenon of Content Sharing so common in the social media. It also provides thoughts on what venues should fall under the categories of Virtual Appearances and what technology should be added to the category of Electronic Correspondence. Finally, it addresses the differences between social media programs that are managed and implemented by a small social media or marketing group within a financial services company and what guidance and safeguards need to be in place for registered reps’ use of the social media. Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 3
  4. 4. 2. INTRODUCTION Over the last few years, FINRA and its member organizations have been struggling with how to regulate communications in the social web; as a result, there has not been enough guidance to make most financial institutions comfortable in this new environment. While other companies that interact with consumers have been able to make social media a key part of their marketing and communications plans, financial services companies have had to tread lightly because of the sometimes stringent and, often, inconsistent regulations they have to work with. This creates a disadvantage since statistics show that not only do many consumers live in the social web, but a vast majority of them use social media to find recommendations before they buy products or services. SOCIAL MEDIA FACT SHEET  If Facebook were a country it would be the world’s 4th largest – between the United States and Indonesia.1  More than 1.5 million pieces of content (web links, news stories, blog posts, notes, photos, etc.) are shared on Facebook…daily.2  LinkedIn has 30.1 million users, with lowest average household income at $87,5003  78% of consumers trust peer recommendations 4  Only 14% trust advertisements5 At first glance, the regulatory challenges surrounding social media seem similar to the 1990’s when first, email communications, then the Internet needed to be addressed. However, the differences between print and these earlier versions of electronic communications were not so different. Email is similar to an electronic version of a letter – a one-way communication that can be pre-approved, if necessary, and easily stored for reference. The Web 1.0 world was, essentially, a one-way communication as well. It was “brochureware” that only interacted minimally with the consumer. 1 Source: Facebook 2 Source: Facebook 3 “2008 Social Media Statistics”, Austin’s New Media Lab 4 Source: July 2009 Nielsen Global Online Consumer Survey 5 Source: “Marketing to the Social Web,” Larry Weber, Wiley Publishing 2007 Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 4
  5. 5. However, neither of these modalities has the volatility of social media. The social web allows for multiple levels of contributions, the number and types of social venues are constantly evolving, and what constitutes the “web” is getting blurred by apps that bring web features to mobile devices. In addition, except for company-created blogs and private-label communities, the social web is controlled by others, making the pre-approval and record-keeping process much more difficult than it is on a company-controlled website. So far, FINRA has published some regulations that address social media by extending rules for the Internet and for traditional communications in a piecemeal fashion. In September 2009 FINRA formed a Social Networking Task Force comprised of both FINRA staff and industry representatives to find ways that “firms and their registered representatives could use social media sites for legitimate business purposes in a manner that ensures investor protection.”6 Soon after, FINRA put out a formal request for comments on the “Proposed New Rules Governing Communications with the Public” (FINRA Regulatory Notice No. 09-55)A and received three responses that addressed the issue of social media. Two responses were from industry organizations – the Investment Company InstituteB (ICI) and the Financial Services InstituteC; the third, and most extensive, was from Fidelity Investments. D What emerged from the responses was a request that a new category of communications be created to cover social media. ICI suggested that this new category be called “Interactive Retail Communications” and Fidelity Investments used the term “Interactive Electronic Communications,” but the prevailing opinion was that trying to fit social media under prior Internet or traditional communications rules would not work. Related concerns included Responsibility for Third-Party Content, Supervision of Employees’ Social Media Use, and Record Keeping. To date, the dialogue around social media has been dominated by the perspective of regulators and financial services industry members, not from those who have a broader view of social media in all of its iterations. This paper’s intent is to summarize the views of FINRA and those industry members who responded to Regulatory Notice 10-06 and to see how those views match up against the many real-world scenarios that can occur on the social web. This paper is not meant to give an interpretation of issues regarding compliance. 6 FINRA Regulatory Notice 10 -06, Social Media Web Sites: Guidance on Blogs and Social Networking Web Sites Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 5
  6. 6. 3. INDUSTRY PERSPECTIVE: INTERACTIVE ELECTRONIC COMMUNICATIONS Interactive Electronic Communications is the term that Fidelity Investments used when requesting that a new category of regulations be created. Their argument for this approach was based on prior communications and rules from FINRA that compared some types of electronic communications to real-time public appearances, and therefore not subject to prior approval and filing requirements.  1999 – FINRA stated that some types of electronic communications, specifically chat rooms, were considered real-time Public Appearances. They seemed to imply that bulletin boards could fall into the same category in a subsequent “Ask the Analysts” session.E  2003 – FINRA officially included Interactive Electronic Forums as Public Appearances.7  2009 – Guide to the Internet for Registered RepsF and related podcastsG, still put chat rooms under the guidance of Public Appearances, but considered blogs and bulletin boards to be Advertisements. They also addressed the issue of profiles created on social networking sites by firm members and designated the content of those profiles that are open to the public as Advertisements and those that have restricted access as Sales Literature.  2010 – Regulatory Notice 10-06, Social Media Web Sites: Guidance on Blogs and Social Networking Web Sites restated that “interactive electronic forums” do not require pre- use approval, but member firms still must supervise these communications and put policies and procedures in place. Interactive electronic communications were now defined as: - Chat rooms - Online seminars - Blogs that “engage in real-time interactive forums”8 - Interactive posts on sites such as Twitter and Facebook 9 The following venues were considered Advertisements: - Static blogs (those without reader comments) - Static portions of sites like Twitter and Facebook10 7 NASD Rule 2210(a)(5) 8 FINRA Regulatory Notice 10 - 06, Social Media Web Sites: Guidance on Blogs and Social Networking Web Sites (Endnote 11) “The key to this distinction between whether a blog is considered an advertisement versus an interactive electronic forum is whether it is used to engage in real-time interactive communications with third parties.” 9 FINRA Regulatory Notice 10 - 06, Social Media Web Sites: Guidance on Blogs and Social Networking Web Sites 10 Ibid Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 6
  7. 7. - Simple “bulletin boards”11 In its response, Fidelity asked that Interactive Electronic Communications be considered a “fourth”12 category of communications and defined it as “an electronic communication the purpose of which the member firm reasonably believes is to respond to, or interact with, Retail or Institutional Investors in real-time.”13 Fidelity then suggested that FINRA provide guidance on what types of communications could be included in this category. Fidelity gave the following types of communication as examples of real-time communications:  Micro- blogs (such as tweets)  Chats  Immediate bulletin boards  Text messages Fidelity then went on to suggest that this new category be covered under the supervision requirements that apply to Correspondence. This would, according to Fidelity, lift the need for prior approval but still keep risk-based surveillance procedures in effect. They cited FINRA’s February 2009 inclusion of Market Letters under the rules of Correspondence as a precedent for putting additional categories of communications under the Correspondence rules.H They also stated that “firms would continue to be required to file Interactive Electronic Communications that are covered under the current filing requirements.”14 One issue that arises from Fidelity’s suggested approach is that Correspondence, including Market Letters, require pre-approval if they go to 25 or more customers. With the exception of text messages, the electronic communications that they mention are likely to reach the 25-customer threshold and, therefore, would not lift the prior approvals rule, as Fidelity claimed. A second issue is that Fidelity is proposing to move chat rooms and “immediate bulletin boards” out of the Public Appearance category, creating more restrictions. This may have been their intent, but it seems to be in conflict with their statement that “firms would continue to be 11 FINRA Guide to the Internet for Registered Reps 12 Note: FINRA refers, at times, to four categories of communication (Advertisements, Sales Literature, Correspondence, and Public Appearances); they also include two additional categories in Rule 2210 – Independently Prepared Reprints and Institutional Sales Materials. It is not clear why Fidelity referred to their suggested new category as the “fourth” category. 13 Fidelity Investment Response to FINRA Regulatory Notice 09-55 14 Ibid Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 7
  8. 8. required to file Interactive Electronic Communications that are covered under the current filing requirements.”15 Finally, there is another issue concerning the definition of terms and what is considered real-time versus non real-time. For example:  Chats and chat rooms are different so the terms need to be used precisely. A chat is a one-on-one communication, while chat rooms have multiple people interacting with others.  FINRA uses the term “interactive electronic forums” and Fidelity uses the term “immediate bulletin board,” but the difference between these terms is unclear and neither term is part of the general lexicon used by those familiar with social media.  FINRA should be clearer about what criteria they are using to define blogs “that engage in real-time interactive forums.”16 The natural assumption is that they are referring to the common inclusion of a “comments” section on blogs, which are sometimes near-time, not real-time. If so, it should be stated. ICI did not try to tie their “Interactive Retail Communications” category into pre-existing communications categories. They simply stated that Interactive Retail Communications should be “subject to pre-use principal approval,” except “to the extent that a firm determines that particular communications instead should be subject to post-use principal approval because of the time-sensitive nature of the information or other circumstances that warrant its prompt dissemination.” They cited the Market Letter ruling as an example of not needing pre-use approval. Like Fidelity, they did not take into account the fact that pre-use approval applies if recipients of a Market Letter number 25 or more. 15 Ibid 16 Ibid Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 8
  9. 9. 4. INDUSTRY PERSPECTIVE: RESPONSIBILITY FOR THIRD-PARTY CONTENT Fidelity, in its Response to FINRA Regulatory Notice 09-55, cited the SEC’s stance on third-party contentI and urged FINRA to develop guidance that addresses issues such as the adoption of third-party content and entanglement in the content’s creation. Soon after, in its January 2010 Regulatory Notice 10-06, FINRA did address these issues in detail, citing the SEC on the adoption and entanglement issues, but taking its guidance much further. FINRA also explicitly addressed the category of third-party posts. FINRA described “entanglement” as follows: Entanglement occurs when content is either paid for by the firm or its personnel were “otherwise involved with the preparation of the content prior to posting.” 17 This is fairly straightforward. According to FINRA adoption occurs “…if, after the content is posted the firm or its personnel explicitly or implicitly endorses or approves the post.”18 Within the same document, they also stated that “As a general matter, FINRA does not treat posts by customers or other third parties as the firm’s communications with the public subject to Rule 2210.” Therefore, prior principal approval, and content and filing requirements do not apply. Finally, since most blogs, as well as forums, groups, bulletin boards, etc. allow administrators to either block or approve a comment, it is not clear if that constitutes “approval” from FINRA’s perspective. However, they did state that disclaimers on blogs and other venues would help FINRA determine whether a firm has adopted or become entangled with a posting on sites that are “monitored.” Fidelity also asked that FINRA “clarify that third-party content such as banner or other advertisements that may appear on a member firm’s social media page and that are not controlled by the member firm, should not be the responsibility of the firm as long as there is no adoption of entanglement.”19 This is a fair request and acknowledges that social media venues are not under the control of any member firm. 17 FINRA Regulatory Notice 10 - 06, Social Media Web Sites: Guidance on Blogs and Social Networking Web Sites 18 Ibid 19 Fidelity Investment Response to FINRA Regulatory Notice 09-55 Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 9
  10. 10. 5. INDUSTRY PERSPECTIVE: SUPERVISION OF EMPLOYEES’ SOCIAL MEDIA USE Fidelity addressed one of the key issues inherent in social media sites: The prevailing social media sites are not under the control of the financial services companies. They stated that “This means that in order to conduct any of the required FINRA functions for communications, including review, approval, supervision and record keeping, firms are dependent upon the functionality of these sites.”20 As a solution, they asked FINRA to:  Encourage firms to create technical solutions to aid in supervision and record keeping on social media sites.  Provide guidance “regarding supervision of registered employees’ use of these sites.”21 The emphasis, by Fidelity, on the supervision of registered employees to the exclusion of marketing or other non-registered personnel who might participate in firm-sponsored social media interactions, creates an exposure for the firms. What the firm does through designated employees, and how that is supervised, is a separate, but equally important, issue from supervising the actions of registered reps. In its January 2010 Regulatory Notice 10-06, FINRA reviewed existing supervisory procedures for communications including electronic communications. In addition, they directly addressed what kind of policies and procedure should be in place, and what restrictions should be put on personnel who want to set up social media accounts.  “Firms must adopt policies and procedures reasonably designed to ensure that their associated persons who participate in social media sites for business purposes are appropriately supervised, have the necessary training and background to engage in such activities, and do not present undue risks to investors.  “Firms must have a general policy prohibiting any associated person from engaging in business communications in a social media site that is not subject to the firm’s supervision.  “Firms must also require that only those associated persons who have received appropriate training on the firm’s policies and procedures regarding interactive electronic communications may engage in such communications.”22 20 Ibid 21 Ibid 22 FINRA Regulatory Notice 10-06, Social Media Web Sites: Guidance on Blogs and Social Networking Sites Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 10
  11. 11. 6. SOCIAL MEDIA PERSPECTIVE: INTERACTIVE ELECTRONIC COMMUNICATIONS Although not commonly used by the general public, a phrase like “Interactive Electronic Communications” is good enough to describe social media and other interactive venues. The openness of the term should also make it possible to subsume the evolving methods of communications offered both by the web and mobile devices under this category. In addition, creating a distinct category of communications called Interactive Electronic Communications and developing associated rules and regulations, will ultimately be more effective than comparing certain interactive venues or situations to previously established categories like Correspondence, Advertisements, etc. Even if the rules surrounding some Interactive Electronic Communications are similar to other categories, at some point, there will need to be clarification to those rules that apply only to this new category, creating a potential for confusion. However, a prerequisite to establishing effective rules and regulations in this complex category is fully understanding all of the venues that fall under this category, the nature of the interactions available, and what tools or features can affect the dissemination of information. Even within the social media community, there are several ways that individuals have tried to categorize and define various social media venues but, although the taxonomies vary, they have organized the venues in a fairly similar manner. Also, although some of the communications addressed by FINRA – such as chat rooms – are not specifically social media, they will be addressed in this section. Finally, the true nature of social media needs to be understood. Traditional marketing and sales communications is a non-interactive, one-to-many stream; there is only talking and no listening. Social media is about having a conversation, and good conversations include active listening. Because of this, not only does the level of interaction increase, but expectations about how quickly a conversation turns around vary among different social media venues. Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 11
  12. 12. 6.1. A TAXONOMY OF SOCIAL MEDIA VENUES SOCIAL MEDIA DESCRIPTION Social networking sites Personal / professional networking sites (e.g. Facebook, LinkedIn) that allow people to create their own networks. Blogs Posts (textual and multimedia) are usually initiated by an Video sites organization or an individual, with comments provided by Photo sites the readers. Presentation sites Event sites have form-based responses only. Event calendars Bulletin boards 23 All community members are able to initiate posts and comment on posts. Q&A Many can post questions and many or one (if sponsored by an organization) can answer. Micro-blogs Similar to blogs, but readers cannot comment directly. They can forward the post of another micro-blogger to their personal group. Social bookmarking & Readers can publicly bookmark or recommend the posts recommendations or articles of others, and add comments. Related “Share This” functions also allow readers to add comments and send links to their Facebook account or “retweet” through Twitter. Wikis Static information, but multiple people can contribute to the content creation. Chat rooms Real-time, many-to-many conversations that replicate real-life exchanges. Online seminars Online presentations, with the potential for real-time voice and text exchanges. Electronic Email, instant messaging, chat, SMS messages, and direct correspondence messaging available within various social media venues. Definitions and examples of various social media and related venues are available in Appendix A. 23 Bulletin Boards are functionally the same as Internet Forums, Message Boards, and Groups. Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 12
  13. 13. 6.2. CHARACTERISTICS OF INTERACTIVE ELECTRONIC COMMUNICATIONS FINRA has focused on two key c cused criteria when determining if a venue can be put under the hen classification of Interactive Electronic Forums – their equivalent to the term “Interactive Electronic Communications,” coined by Fidelity Fidelity: 1. Interactivity with third-par parties 2. Real-time exchanges However, these criteria alone are not complete enough to evaluate the full range of social media e venues and the types of activities that can occur Amending the classification of “real-time” to occur: f include “near-time” would more acc time” accurately reflect the realities of social media. In addition, media separating out those venues that are truly virtual Public Appearances would help create realistic rules for these environments. Finally, there are some newer forms of electronic communications . communicatio such as SMS and social media site specific messaging that should be explicitly categorized under site-specific Electronic Correspondence. Interactive Electronic Communications 6.2.1. INTERACTIVITY WITH THIRD PARTIES Within social media venues that allow for “interactivity with third parties,” there are differences between who is allowed to post and who is allowed to comment that affects the locus of control. comment, control  Blogs typically have one or several authors that initiate posts, who all belong to the same organization Copyright 2010, Catherine Sherwood | Real Communications All rights reserved. herine Communications. 13
  14. 14.  Readers can then comment on the blogs and the bloggers, in turn, can respond to those blogs, comments directly  Video sites (YouTube), p photo sites (Flickr) and presentation sites (SlideShare) also allow resentation for comments  With bulletin boards, any member of the community can start a discussion thread, and community thread anyone in the community can post an entry and carry on the discussion 6.2.2. REAL-TIME AND NEAR-TIME EXCHANGES Truly real-time interactive exchanges do not always occur, even in cases where there is a lot of time interactivity with third parties. Many blogs approve comments in advance of actually posting them, so there is a necessary delay between when the comment has been written and when it is actually posted. It would be useful to introduce the concept of “ “near-time,” so that interactivity ” tha with third parties that has a short delay could be included. 6.3. VIRTUAL APPEARANCES FINRA has stated that chat rooms and online seminars (webinars) are analogous to Public Appearances, but FINRA has also labeled chat rooms and online seminar as Interactive Electronic Forums, a term seminars they also use for what they call “interactive blogs.” However, FINRA has not explicitly stated that interactive blogs and similar venues should be considered as Public Appearances. These inconsistent statements create confusion atements confusion. It seems that the characteristics of “interactivity with a third-party” plus a “real-time or near-time time near exchange of information” are what led FINRA to mix in chat rooms and online seminars with “interactive blogs,” but it is not clear what made them stop short of stating that the entire Interactive Electronic Forums category w similar to a Public Appearance. Chat rooms and online was hat seminars are a many-to-many form of communication that most closely mirrors similar real-life many situations and, in that way, they differ from other online social venues. The concept of Virtual Appearances might be an apt category in which to include these types of venues that offer a real- real time give-and-take among many individuals and, therefore would logically be subject to the same take therefore, gically rules as Public Appearances. Copyright 2010, Catherine Sherwood | Real Communications All rights reserved. herine Communications. 14
  15. 15. 6.4. ELECTRONIC COMMUNICATION FINRA has already ruled that email and instant messages are Correspondence24. This Electronic Correspondence category is characterized by communications that are eith one- either -to-one or one- to-many, and are directed at a very defined recipient or recipient list. many, list The following should be put in th same category: this  One-to-one chat, available on Facebook and other social media venues  Direct messaging capabilities, available on sites such as Twitter, Facebook and LinkedIn  SMS (text) messages 24 FINRA Guide to the Internet for Registered Reps “An email or instant message is considered Reps: An correspondence if it is sent to i) a single customer (prospective or existing) ii) to an unlimited number of existing retail customers and/or less than 25 prospect retail customers (firm-wide) within a 30 day prospective wide) period.” Copyright 2010, Catherine Sherwood | Real Communications All rights reserved. herine Communications. 15
  16. 16. 7. SOCIAL MEDIA PERSPECTIVE: RESPONSIBILITY FOR THIRD-PARTY CONTENT Third-party, social media content typically consists of guest bloggers, those who contribute photos and videos, and comments that respond to blog posts or other content (videos, photos, presentations, etc.). It can also include content-sharing activities that are common in the social web.  Guest bloggers are invited to post and their blogs are, typically, not edited by the host blog. However, the common perception by most readers is that there is, at least, an implicit approval of the content since the guest blogger was invited to contribute.  It is not uncommon for those who have a Facebook Fan Page or who host a website to invite readers to post their own videos or pictures, as a way of engaging those people. These postings are viewed as personal contributions and – in that way – are similar to comments.  Comments from third parties are not viewed as representing the host site. It is commonly understood that the process of “approval” is simply to remove offensive, inflammatory, or potentially libelous content, and does not create an endorsement of that content in the eyes of the reader. FINRA has come close to providing clear guidance on third-party comments, but a more straightforward statement of what is considered adoption, and the explicit inclusion of non- textual forms of content would better reflect the world of social media. To imply that simple monitoring and approving could constitute “adoption” seems to be stretching the definition of that term. FINRA’s suggestions that  “establishing appropriate usage guidelines for customers and other third parties that are permitted to post on firm-sponsored Web sites;  “establishing processes for screening third-party content based on the expected usage and frequency of third-party posts; and  “disclosing firm policies regarding its responsibility for third-party posts.’25 25 Ibid Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 16
  17. 17. are all good advice. However, the inclusion of the term “firm “firm-sponsored blogs,” in conjunction ” with the term “Web sites,” would be more precise. In addition, sites such as Facebook have the ” capability of including additional content on firm sponsored Fan Pages, and member firms should ity firm-sponsored also be encouraged to include usage guidelines and policies there.J Also, establishing processes for screening third third-party content on firm-sponsored websites and sponsored blogs should be extended to reviewing and responding to comments on firm sponsored Facebook firm-sponsored Fan Pages, YouTube Channels and any other firm sponsored content hosted on external social firm-sponsored media sites. Although textual comments may not be able to be removed, the mem member firm can explicitly state that they do not support a comment. If the content is non-textual, and offensive or inappropriate, they can usually remove it. 7.1. CONTENT SHARING Content sharing is a key part of the “social” aspect of social media and a good way to allow others to promote member firms. In many way instances comments are added at the time that the content is instances, shared, but – unlike comments on blogs – these comments either appear on the sites of the social bookmarking and recommendation sites or, in the case of Twitter and Facebook, are appended to the “forwarded” content forwarded” content.  Social bookmarking site (Delicious) and recommendation sites (Digg, StumbleUpon) sites allow readers to share blogs, video and other content they like with others.  “Share This” icons allow readers to easily connect to Delicious, Digg and StumbleUpon, ow and also to “retweet” content through their Twitter accounts, post it on their Facebook ” accounts, Wall, email it to friends, etc. Addressing the category of “content sharing” would help provide direction about these features direction and services to member firms. Copyright 2010, Catherine Sherwood | Real Communications All rights reserved. herine Communications. 17
  18. 18. 8. SOCIAL MEDIA PERSPECTIVE: SUPERVISION OF EMPLOYEES’ SOCIAL MEDIA USE There are two, broad classes of individuals associated with member firms who might engage with clients or prospects in the social web:  A select group of individuals who work within or under the auspices of a social media or marketing department, and  registered reps that interface directly with clients. FINRA has emphasized the need for having only those employees who are “appropriately supervised, have the necessary training and background to engage in such activities, and do not present undue risks to investors,”26 engage in social media. This provides good direction, but – given the frequent changes to features of existing social media sites and the constant introduction of new sites – training will need to happen not just on a scheduled basis; it will need to happen as conditions change. Facebook and LinkedIn regularly create enhancements for their sites (not only new features, but also changes to privacy settings) that are only made known on the day of their release. In addition, the unpredictable nature of comments will not only need processes in terms of what to approve and not approve (if a member firm is monitoring their blog), but also escalation procedures to handle some of the comments on their site as well as comments received on places like their Facebook Fan Page. These escalation procedures do not have to be at the level of supervisory review, but are recommended for those difficult or hostile comments that need a careful reply. Finally, training on good social media practices for member firms is recommended to maintain good relationships with their customers and prospects. Supervision is easiest with a small group of member firm employees who work within or under the auspices of a social media or marketing department, however, supervision is clearly more difficult with a large group of registered reps. Both training and surveillance could become hard to manage and would, therefore, increase exposure. Having tighter restrictions on what registered reps can do would help, but so would providing structured ways for them to engage in the social web that support their desire to engage with clients and prospects in this new environment. FINRA only touched on addressing regulations that relate directly to registered reps when it said that profiles created by firm members on social networking sites that are open to the public are 26 FINRA Regulatory Notice 10 - 06, Social Media Web Sites: Guidance on Blogs and Social Networking Web Sites Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 18
  19. 19. considered Advertisements, and those that have restricted access are considered Sales Literature.27 Developing some use-case scenarios 28 based on the use of social media by registered reps, and providing guidance on what rules need to be employed to be in compliance, would help the member firms. Some sample use case scenarios are provided below: SOCIAL MEDIA VENUE SAMPLE USE-CASE SCENARIOS LinkedIn Public profile and private profile should be reviewed by member firm. Guidance for what is included in public profile should be provided. Reps can use content provided by member firm to populate these features and apps:  Blog  SlideShare or Google Docs presentations  Events calendar  LinkedIn polls Reps should not provide any financial advice in Groups nor answer any questions related to investment advice. Blogs The member firm’s blog can be integrated into the rep’s approved website. If the firm’s blog monitors comments, then the rep’s comments to his client’s comments could also be reviewed. The rep could also create his or her blog posts, if using software run by the member firm. The member firm would then approve the rep’s posts before they go live. 27 FINRA Podcast: Electronic Communications: Social Networking Websites 28 A use-case scenario systematically breaks down user action so that product requirements can be built that meet their needs. It is usually used by software designers, but could also be a useful way to formulate regulatory guidance. Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 19
  20. 20. 9. CONCLUSION In order to create an environment where member firms can comfortably create social media strategies for their organizations, FINRA needs to take a top-down look at the full range of social media and related venues, and provide guidance that addresses as many scenarios as possible. In order to achieve this, creating a separate category of communications called “Interactive Electronic Communications,” and creating rules associated specifically with this category, would be a good first step. Even if the rules are very similar to those of existing categories, this new class of media is complex enough that it should be treated separately. Within this new category, all venues can be evaluated on key criteria – such as interactivity and how close to real-time or near-time that interactivity occurs – and guidance on supervision, polices and processes given that relates specifically to these venues. Employing the terms most commonly used in the social media will also make sure that FINRA rules are easily understood. Furthermore, since many of these social media venues are also available through mobile apps that allow for most, if not all, of the same functionality, the delivery mechanism should not affect the guidance given for these venues. The term “Virtual Appearances” was introduced for those interactive electronic communications that are both real-time and also have the interactive style found in real-world situations. In addition, a recommendation was made to include SMS text messages, one-to-one chat, and some new forms of direct messages under the sub-category of “Electronic Correspondence.” Guidance on third-party content and what specifically constitutes “adoption” in cases where a member firm is monitoring comments would be of value, as well as an acknowledgement that third-party content could also include videos, images or other non-textual content. Also, disclaimers and usage guidelines for readers should be extended to third-party sites such as Facebook. The act of “Content Sharing” is also a form of engagement by readers and guidance from FINRA on this functionality would let member firms know if they can encourage these activities with the “Share This “ buttons found on may blogs and site. Finally, the FINRA guidelines, to date, seem focused on social media activities that would emanate from the member firms’ social media or marketing department, not from their registered reps. This group is more difficult to train and supervise, so most member firms will not want them setting up professional Facebook Fan Pages or their own Twitter accounts. However, there are scenarios where registered reps can be involved in the social media, and where member firms can Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 20
  21. 21. aid them by supplying them with pre-created content. Developing some “use-case scenarios” of how registered reps can engage in social media and providing guidance on those use-cases was suggested as a way that FINRA could support member firms. Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 21
  22. 22. APPENDIX A: SUMMARIES OF SOCIAL MEDIA AND RELATED VENUES This section includes one-page summaries of types of social media and related venues. Each overview includes a description, examples of sites that fall under the described category, some features (or characteristics) of these sites, and comments that address issues that would be of interest to FINRA and member firms. SUMMARIES OF SOCIAL MEDIA AND RELATED VENUES  Social networking sites - Facebook - LinkedIn  Blogs  Video sites  Photo sites  Presentation sites  Event calendar  Bulletin Boards  Q&A  Micro-blogs  Social bookmarking & recommendations  Wikis  Chat rooms  Online seminars  Electronic correspondence Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 22
  23. 23. PERSONAL SOCIAL NETWORKING SITES | FACEBOOK Description: Facebook is the leading social networking site. Although people “friend” those in their personal and professional networks, the nature of the communications is primarily social. Companies also have Facebook accounts, but these accounts are called Fan Pages and people who run Fan Pages cannot make Friend requests. However, they can ask those who become their fans to invite their friends to also become fans. Facebook Groups were the precursors to Fan Pages, but are not typically used by corporations. Other Examples: Orkut (owned by Google, popular in Brazil and India), Bebo (popular in Europe and Australia), MySpace (younger demographics than Facebook) Fan Page Features Comments  Wall  The Fan Page Wall is an interactive venue. - Company posts Some companies only allow themselves to - Fan posts (optional) post and their “fans” to comment. Most,  Discussion however, allow their fans to post as well –  Photos and other fans as well as the company can  Videos comment.  Notes  The Discussion area is similar to a bulletin  Events board and is interactive  Boxes (custom pages)  Photos, Videos and Notes all allow for  Info comments and therefore are interactive  Chat  Events allow fans to RSVP and in that sense  Private messages could be considered interactive ______________________________________  Boxes or custom pages are created by the company that set up the Fan Page and have Privacy features are available for normal the potential to be interactive Facebook pages (information can be public,  Info (typically a company descriptor) is viewed by friends of friends or just by friends) static. but Fan Pages typically are just public. Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 23
  24. 24. PROFESSIONAL SOCIAL NETWORKING SITES | LINKEDIN Description: LinkedIn is primarily a business networking site, although they have added some more “social” features. Other Examples: Plaxo (a site similar to LinkedIn that has not really been able to gain traction against its rival. Xing is similar to LinkedIn and very popular in Europe. Features Profile page basic elements:  LinkedIn members have the ability to set up a public profile that anyone can see, and  Picture another profile that is only for their  Headline connections. They can opt that no profile be  Summary shown or include any of the basic profile  Specialties elements (with the exception of Contacts  Current & past positions Setting which are never shown). This kind of  Education flexibility makes it possible for member firms  Websites to limit what is in a public profile.  Interests  The additional profile page applications are  Groups less static than the profile page basic  Honors and Awards elements. However, some of these  Interests applications can be populated with pre-  Contact Settings approved materials from the member firms – Additional profile page applications: blog postings, SlideShare or Google Docs  Blog integration (TypePad & WordPress) presentations, events calendar, and LinkedIn  SlideShare and Google Docs presentations Polls – and can create a way for registered integration employees to connect in a more compelling  Events calendar fashion with their clients and prospects.  LinkedIn Polls  Groups are places where LinkedIn users can  Tripit for sharing upcoming trips start discussions or comment on the  Reading List from Amazon discussion threads of others. Groups can also  Twitter account integration be founded by LinkedIn members. Interactive LinkedIn capabilities:  Answers is an open area where LinkedIn  Groups members post questions and other members  Answers answer them. Other:  InMail private messages Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 24
  25. 25. BLOGS Description: Blogs are a means of communications from one individual or a pre-set group of individuals to their readers, not a community. Readers of blogs can comment and the blog author and other readers will comment on various comments, but readers cannot initiate a blog themselves. It is not unusual for blogs to review comments before they are approved to appear online, and readers accept this, but expect a quick turnaround between when they post a comment and when it appears. It is also not uncommon for blogs to have policies about what they will accept and not accept as comments. It is also customary that readers be told that there will be a delay while their comment is approved. Much of the mainstream media is online and also allows readers to comment on articles, which is starting to blur the line between blogs and traditional content. However, with traditional online sites, the writers do not typically respond to the readers, comments and the tone of the article is more formal and less personal than blogs. Examples: Vanguard Blog K Characteristics Comments  New blogs tend to appear  Blogs are not real-time, but – at least – daily updates of new daily blogs and intraday turnaround for approving comments is  Comments allowed by expected. readers  A member company can create internal guidelines for topics  Readers are often allowed to that acceptable to be covered and, when necessary, a share or recommend blog disclosure statement can be appended at the end of the posts blog post.  Bloggers can comment on  Pre-approving comments can protect against misleading or comments inappropriate comments from readers, especially if good  Approval of comments is guidelines are put in place for the reviewers. accepted if there is a quick  Furthermore, guidelines for readers, in terms of what is turnaround time acceptable or not acceptable in a comment, would decrease  Commenting policies are not the frequency of inappropriate comments. uncommon  Disclosures about the member firm’s policies regarding its responsibility for comments would decrease liability of the member firm.  “Share This” buttons can be added to blogs, allowing readers to share a blog with friends or submit to a social bookmarking or recommendation site. Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 25
  26. 26. VIDEO SITES Description: YouTube is the most well-known and the largest video site. Users can post videos that they tag with keywords and viewers can submit comments, rate the videos, and share them. Some create YouTube Channels to which viewers can subscribe at no cost. Facebook also allows members to upload videos on their home pages. Examples: YouTubeL, Facebook Characteristics Comments  Most companies submit videos of TV ads to YouTube and  On YouTube viewers can Facebook. Although this would be easy for member firms to comment on videos, rate do since it is content that has already been approved, it is them, and share them with not that compelling for viewers. others.  Videos of short presentations or video blogs (vlogs) from  Those who submit videos can interesting senior employees create more compelling create channels that viewers content. subscribe to for free  Comments posted on YouTube are not typically responded  Facebook videos will be to by those who created the video. disseminated to all fans Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 26
  27. 27. PHOTO SITES Description: Sharing photos is a common activity on the social web. Sites like Flickr are used by individuals to share their images with friends; they can also join in one of the thousands of Flickr groups and share photos among like-minded individuals. Facebook users often share photos that they “tag” with the names of their friends. Examples: FlickrM, Facebook Characteristics Comments  Photos of public events and even some internal company  Sharing photos is a simple events make a company more approachable. process of posting images to  It is not clear if photos with tags are considered “content” as a site defined under FINRA regulations.  Tagging photos on a public site like Flickr will make them searchable by Google  Uploading photos on Facebook will make them viewable to your fans; if a fan is in the photo and that person’s name is in the tag, they will be notified and can remove the tag Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 27
  28. 28. PRESENTATION SITES Description: SlideShare is the leading site for sharing presentations and other documents with others The person or company that submits the presentation or document can ensure that the files are not able to be edited, so that the integrity of the presentation or document can be maintained. Viewers can share what they see, offer feedback, and “favorite” presentations. LinkedIn and Facebook allow users to integrate SlideShare share presentations or documents into a user profile or personal home page, respectively. Examples: SlideShare,N Google Docs Characteristics Comments  SlideShare and other presentation sites are a good way to  Presentation sites are repurpose presentations and documents, especially for primarily a way to share those who could not attend an event content with others  SlideShare and other presentation sites are also a good way  Sharing functions allow to disseminate presentation materials for those who viewers to disseminate attended an event. presentations to others  Conversion to PDF ensures the integrity of the information  Files can be converted to PDF before uploading to ensure the integrity of the content Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 28
  29. 29. EVENT CALENDARS Description: Event calendars are often defined as “social media,” because many of the social and entertainment event sites have some kind of interactive features. Venues like Meetup facilitate the creation of real-life communities and the two most prominent social networking sites – Facebook and LinkedIn – have event features. Private-label event calendar software can also be added to a company website or blog using one of the many products available. Event calendars typically allow users to accept an invitation to an event and the more sophisticated private-label software allows for full registration. Examples: Social / entertainment events (Upcoming, Eventful); local group meetings (Meetup), Facebook, and LinkedIn events to share with connections; event calendar software for company websites and blogs. O Characteristics Comments  Content controlled by event  Member firms could easily integrate event calendar software organizer onto their websites and organize geographic area for in-  Users simply sign-up for person events or by topic for online events. events  Facebook could be used to announce events to fans  LinkedIn could be used by member firm employees to promote firm-authorized events Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 29
  30. 30. BULLETIN BOARDS, INTERNET FORUMS, MESSAGE BOARDS, GROUPS Description: Bulletin boards, internet forums, message boards, and groups are all essentially synonymous. They are online discussion sites that are sometimes referred to as “communities.” They are created by one individual or a set of individuals that are responsible for the conception of the site, the technical maintenance, and the creation of and enforcement of policies. Typically an explanation of the purpose of the community and a set of guidelines for community members is posted. Any member can start a discussion (often called a “thread”) to which other community members then respond. Examples: Morningstar has 31 groups with a total of almost 1.9M posts.P LinkedIn has more than 467,000 English-speaking groups. Facebook has “groups” but they function more like fan pages. Their Discussion functionality is more analogous to this category. Yahoo and Google have 20,000+ groups on Investing, though many are small and not of high quality.Q Characteristics Comments  All community members can  Initiating a response in a bulletin board run by another initiate posts organization could be done if handled within specific  Goals and rules are normally guidelines by a designated employee of a member firm. set by the moderator For example:  Content can be deleted - John Brown, Manager Corporate Marketing and  Offending users can be Communications, Vanguard, could identify himself in a banned response to a discussion thread on Morningstar’s  The vast majority of these Bogleheads Unite. venues are near-time, not - He could then provide a comment in a pre-approved real-time format that basically says “I would like to respond to this __________________________ post but my company requires me to communicate on Note: Within this category there our company blog. Please follow the link below to see is no concept of a bulletin board my comment.” that is not interactive.  Member firms could create private-labeled bulletin boards. Interactivity is at the heart of the However, even with content controls and guidelines, definition of this category allowing users to initiate discussions would create more exposure and could result in “locking” entire threads of discussions, if the subject matter or responses became problematic. Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 30
  31. 31. Q&A Description: Q & A (Question & Answer) sites are not as common as blogs or bulletin boards, but people often use them for specific questions. Answers can either come from generous readers on public or semi-public sites, but companies can include Q & A sections on sites that they host, or sponsor a section on a public Q & A site. Examples: Yahoo AnswersR; Charles Schwab-sponsored section of Yahoo AnswersS; LinkedIn has an Answers section on their site where members can ask questions. Characteristics Comments  Individuals post questions  For member firms, engaging in Q & A sites, whether public or that others answer private, disclaimers would be advisable.  Answers can come from the  There would need to be internal policies on what questions general public or a specific could be answered and which ones could not be answered company on a sponsored and training on how to politely decline to answer some public site or a private questions. hosted site. Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 31
  32. 32. MICRO-BLOGS Description: Micro-Blogs are 140-character communications sent out by individuals (or employees of a company) to a pre-defined group of recipients who have opted-in to receive the communication. Although it has some characteristics of opting-in to receive an email newsletter, communications are typically daily or intraday, and the recipient goes to the micro- blog site to view the information. There is no ability to comment publically in the same way as with a regular blog. With Twitter –the leading micro-blog – readers can send a private “direct message” to the Twitterer or they can “retweet” the posting to their group of followers. A direct message is like a short email communication and the Twitterer can answer back privately. Retweeting, however, can get a message that was intended for a closed audience out to a much larger, undefined audience. Twitter also allows for a “public reply” by including a follower’s Twitter account name in a tweet that all of his or her other followers can see. Examples: TwitterT, TumblrU Characteristics Comments  140-character posts that  There is no way to stop others from “retweeting,” so those typically happen daily or that post on a micro-blog like Twitter need to assume that intraday what they communicate will go to an audience beyond  Original posts can go to a those they have accepted as their followers. closed group of “followers.”  A frequent use of Twitter is to provide a brief phrase, but the ability for followers to followed by a shortened URL to another location such as a “retweet” posts opens up web site, blog, YouTube, etc. To provide safeguards, communications to an disclaimers and other safeguards can be put in place on the uncontrolled audience. destination site.  Twitter supports direct  Fidelity Investments has a Twitter account where they have messages – communications done the following: directly to and from followers. - Referrals back to their website:  Twitterers have the ability to “Which #Market #Sectors performed the best and why in Q4 drop a follower 2009? Take a look back with our Sector Snapshot (pdf) http://go.fidelity.com/Q409 - Public replies to followers: “@apurva212 Opening a Roth is a great step - for reasons to choose us, see http://go.fidelity.com/whyFidelity Let us know if you have ?s” “@natodod Very interesting question, but sorry we aren’t able to provide investment guidance (including individual securities) on Twitter” Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 32
  33. 33. SOCIAL BOOKMARKING & RECOMMENDATION SITES Description: Delicious is the leading social bookmarking site. It allows users to organize and tag website links both for their own use and to share with others on the Delicious site. Digg and StumbleUpon are the leading sites where people can recommend blogs, article, videos, etc. Examples: Delicious, Digg, StumbleUpon V igg, Characteristics Comments  User tools to share blog  Providing a “Share This” button on a blog will help move the ” posts, articles and videos content to a wider audience with others  YouTube has a built-in share button for Facebook Twitter and hare StumbleUpon Copyright 2010, Catherine Sherwood | Real Communications All rights reserved. herine Communications. 33
  34. 34. WIKIS Description: Wikis are websites where people can collaborate by submitting and editing information via web browser. The largest and most famous wiki is Wikipedia, an online encyclopedia. Companies also create internal wikis as a way to share knowledge internally, and some companies create public wikis as well. For example, some high tech companies create a wiki to provide technical support information to their customers. Examples: WikipediaW, corporate wikisX Characteristics Comments  Collaboratively-created  Wikis could be a good way for member firms to organize website typically used as a educational resource information and make it accessible to knowledge base clients or prospective clients.  Access controls make it  Wikis could also be used by a member firm to organize possible to limit who can product information, procedures, policies, etc. for registered generate content reps.  Access controls make it  All member firms should check out Wikipedia to see if there possible to limit who can see is an entry about their companyY and make corrections to content any misinformation. While there, they should also check out  Content is typically the Discussion tab and the History tab (to see who created “evergreen”, meaning that it the entries) is not timely information ,  If a member firm does not have an entry that has been but more resource material submitted by a third party, they might consider creating their own entry. However, Wikipedia expects that people maintain neutrality with company and product entries, and not treat them as sales literature. Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 34
  35. 35. CHAT ROOMS Description: Chat rooms are virtual areas where people can communicate with each other in real time. Most chat rooms are text-based but some include images such as avatars. They are typically unmonitored and used primarily for social exchanges or – at times – for games. Examples: Sites such as YahooZ and AOL’s AIMAA have multiple chat rooms available based on socializing or similar interests. Characteristics Comments  Real-time discussions, usually  Since there is no match between most of the people who go using quick phrases and into chat rooms (and the discussions they want to have), Internet slang and the communications goals of member firms, this is not a  Unmoderated useful place to be in the social media.  Identity of participants is  Member firms could create chat rooms for their clients, but usually not known the real-time nature of chat rooms and the lack of control make it problematic. Online seminars are a better forum to have a real-time conversation with a group of clients. Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 35
  36. 36. ONLINE SEMINARS, WEBINARS Description: Online seminars are frequently referred to as “webinars.” They are not technically social media but a virtual meetings hosted by an individual or a company. Typically, the host has a prepared presentation, but is also able to open up the webinar for discussion. All participants are viewing the content residing on the host’s computer, and are listening in via telephone or an Internet audio connection. Participants can raise their hands to get permission to speak and the host can see the names of these participants. The major suppliers of online seminar software also provide the ability to create an audio recording of the proceedings. Examples: GotoMeeting, WebEx Characteristics Comments  Real-time  Similar to a public appearance, but with a virtual audience.  Virtual “public appearance”  Audio recording of the presenter and participants can be  Record keeping is aided by done with built-in features of the software suppliers. making an audio transcript of what was said by the presenter and the participants. Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 36
  37. 37. ELECTRONIC CORRESPONDENCE Description: “Electronic” Correspondence encompasses new forms of correspondence that closely mimic traditional correspondence. It already includes email and instant messaging (IM), but SMS text, one-to-one chat and the various “direct message” options available on social media sites have the same characteristics as email and instant messaging. Examples: SMS text is available from virtually every cell phone service provider; chat functions are available on Facebook and could be a form of communication between a service agent and a customer; Twitter has Direct Message (DM), LinkedIn has InMail and Facebook has a Message capability. Characteristics Comments  Mimics email  Identifying those types of electronic correspondence that correspondence or text- are sometimes embedded in social media sites, and based, one-one-one categorizing them under Electronic Correspondence, will help conversations member firms create good social media policies Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 37
  38. 38. ABOUT THE AUTHOR Catherine Sherwood | Real Communications Phone: 505-292-4433 Cell: 505-550-6106 Email: Catherine@CatherineSherwood.com Web/blog: http://CatherineSherwood.com For links to all social media connections: www.XeeSM.com/CatherineSherwood Catherine Sherwood is a consultant specializing in social media and strategic marketing. Her marketing insights and expertise in social media are backed by 20+ years of business experience at the ial senior executive level. She is a strong proponent of using social media to transform how businesses approach marketing, and is committed to helping her clients navigate this rapidly- rapidly growing and evolving world. She integrates the new social media paradigm with her solid executive experience to help her clients acquire and retain customers, improve their support and , delivery systems, and grow their brands. Catherine has worked in the financial se services industry for most of her career. Companies include: EMPLOYEE CONSULTANT  Pinnacor (sold to CBS MarketWatch)  Equity Strategies Group  Inlumen (formerly NewsAlert) (division of Lincoln Financial)  Thomson Financial  Stockgroup Media  IDD Information Services  Terra Nova Financial  Knight-Ridder Financial  SmartMoney.com Copyright 2010, Catherine Sherwood | Real Communications All rights reserved. herine Communications. 38
  39. 39. ENDNOTES A FINRA Regulatory Notice No. 09-55: Communications with the Public: FINRA Requests Comments on Proposed New Rules Governing Communications with the Public http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p120005.pdf B ICI Response to FINRA Regulatory Notice 09-55 www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/noticecomments/p120410.pdf C FSI Response to FINRA Regulatory Notice 09-55 www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/noticecomments/p120432.pdf D Fidelity Investment Response to FINRA Regulatory Notice 09-55 www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/noticecomments/p120426.pdf E NASD Ask the Analyst – Electronic Communications www.finra.org/Industry/Regulation/Guidance/RCA/p015326 F FINRA Guide to the Internet for Registered Reps www.finra.org/Industry/Issues/Advertising/p006118 G Podcasts – Electronic Communications: Web Sites; Electronic Communications: Blog, Bulletin Boards and Chat Rooms; Electronic Communications: Social Networking Websites www.finra.org/Industry/Issues/Advertising/p006118 H Market Letters, Regulatory Notice 09-10 http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p117804.pdf I SEC Interpretation, Release Nos. 34-58288 www.sec.gov/rules/interp/2007/34-58288fr.pdf J Vanguard’s Commenting Guidelines and Disclaimer displayed on their Facebook Fan Page: Commenting guidelines: We love reading your feedback on our videos, status updates, and other posts. Since we're still getting adjusted to this new medium, Vanguard can't respond to your comments at this time. Also, we reserve the right to delete comments that we, in our sole discretion, believe may be unlawful, abusive, offensive, or inappropriate. See more. Finally, please don’t use Facebook to request transactions or submit questions about your investments or customer-service issues. Instead, contact Vanguard directly. Disclaimer: Vanguard is independent of this site. Any opinions expressed by our Facebook fans are those of the persons submitting the comments, and don't necessarily represent the views of Vanguard or its management. Vanguard is not responsible for and does not endorse any advertisements that Facebook.com may place on this page. Vanguard is not responsible for and does not endorse the content, advertising, products, advice, opinions, recommendations or other materials on or available from other pages on Facebook.com or any website owned or operated by a third party. Vanguard is not responsible for the terms of use or privacy or security policies at this site or other third party sites that may be linked to by this page or other Facebook.com pages. You will use any third party sites and materials at your own risk. Vanguard Marketing Corporation is the distributor of the Vanguard Funds. K Vanguard Blog www.vanguardblog.com Vanguard has six senior employees that are contributors to their blog. Although they initially did not allow comments, they do now. They have a very clear commenting policy for their readers http://www.vanguardblog.com/about#comments.They do not directly comment on the comments of their Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 39
  40. 40. readers. However, some cases where a blog has generated a lot of comments, they create a new blog that readers. However, in some cases, where a blog has generated a lot of comments, they have created a new blog entry that addresses the issues raised by readers. For example: http://www.vanguardblog.com/2010.02.02/another-take-on-a-tale-of-two-investors.html#more-293 L YouTube You Tube served up more than 12 Billion views of videos in November 2009 alone. http://www.strangelove.com/blog/2010/01/youtube-growth-chart/ M Photo sharing sites: www.flickr.com is owned by Yahoo. N Presentation sites: SlideShare can be found at www.slideshare.net O Event Calendars: Social / entertainment calendars (http://upcoming.yahoo.com;http://eventful.com); community-based events (www.meetup.com); and dozens of private label software that can be integrated on a website or blog (e.g. Trumba) P Morningstar’s discussion groups: http://socialize.morningstar.com/NewSocialize/forums/default.aspx Q Yahoo Groups: http://groups.yahoo.com. Google Groups: Http://groups.google.com/grphp?hl=en&tab=wg R Yahoo Answers: http://answers.yahoo.com S Charles Schwab-sponsored section of Yahoo Answers: http://answers.yahoo.com/my/profile?show=YEmi3VFsaa Includes the following disclaimer: The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment or tax advice. Any investments and strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. T Twitter www.twitter.com The leading micro-blogging site. Although they do not release the number of accounts, in December 2009, Quantcast estimated the number of U.S. Twitter accounts at around 23 – 24 million. (www.quantcast.com/twitter.com) U Tumblr www.tumblr.com Secondary micro-blogging site. Smaller than Twitter, and features easy integration of video, images, and audio. V Social bookmarking and recommendation sites: http://delicious.com; www.stumbleupon.com; http://digg.com W Wikipedia The largest Wiki by far. It is a user-contributed “encyclopedia” with more than 3.1 million English-language entries. (www.wikipedia.org) X Wiki software Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 40
  41. 41. Wiki software is available from several software companies: Wikipedia has a chart that compares multiple wiki software companies. (http://en.wikipedia.org/wiki/Comparison_of_wiki_software) Y Wikipedia has an entry on Fidelity Investments created by a third party. http://en.wikipedia.org/wiki/Fidelity_Investments Z Yahoo Chat Rooms: http://chat.yahoo.com/ AA AIM Chat Rooms: http://chat.aim.com/ Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 41

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