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Social Media Compliance for Financial Services 2013 by LIMRA


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Social Media Compliance for Financial Services 2013 by LIMRA

  1. 1. Social MediaCompliance forFinServ in 2013Stephen SelbyLIMRA ServicesDirector, Regulatory Services © LL Global Services Inc. 2013
  2. 2. Why Social Media
  3. 3. Why Social Media? How will your business use social media?
  4. 4. Three Kinds of Communications • Correspondence • Retail Communications • Institutional Communications
  5. 5. Filing Exemptions FINRA 2210(c)(7)(M) (M) Retail communications that are posted on an online interactive electronic forum.
  6. 6. What is an“Online Interactive Forum?” Static Interactive Online Interactive Profile Forum
  7. 7. Content Standards Still Apply • General Standards • Comparisons • Disclosure of Members Name • Tax Considerations • o Disclosure of: Fees o Expenses and o Standardized Performance • Testimonials • Recommendations • Prospectuses Filed with the SEC
  8. 8. 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.
  9. 9. Not so fast… Other regulators • SEC Books and Records Retention Rules • RIA Testimonial rules are unchanged • MSRB • CBOE • Department of Labor
  10. 10. Privacy and Social Media • State Laws • Personal vs. Business Profiles • How do we distinguish in a time of BYOD (bring your own device)?
  11. 11. 27 States! Arizona California Colorado Connecticut 27 States Georgia Hawaii Illinois Iowa have either enacted or have pending Kansas Maine Maryland Massachusetts laws intended to protect employees Minnesota Mississippi Missouri Montana personal use of social media! Nebraska New Hampshire New Jersey New Mexico What does this mean for supervision? New York North Dakota Rhode Island Texas Utah Vermont Washington
  12. 12. 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.
  13. 13. Why is the JOBs Act Scary?• Selling Away• Due Diligence• Conflict of Interest• Form BD
  14. 14. The Future of Social Media • Supervision • Content • New sites • Mobile • “C” clients and self service?
  15. 15. Practical Social Media • System of Supervision • Based on: • Business needs as defined by • Business use cases o Marketing o Connecting • Electronic surveillance • Auditing • Virtual • In person
  16. 16. 2013 Social Media Conference for Financial Services 8/21/2013 - 8/23/2013 • FacebookHyatt Regency, Boston, MA • Google • LinkedIn Now In Its 4th Year! • Twitter
  17. 17. Q&A Stephen Selby Director, Regulatory Services LIMRA Services, Inc. T. 860-285-7858 @limra_crs