Social advertisements

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Advertising in Social Media requires specific rules applied to any FSA authorised firm - even micro-blogs!

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Social advertisements

  1. 1. 2011 Social Advertising Financial Promotions When is a Non-Advert an Advert? June 2011 th30 June 2010 Lee Werrell FInstSMM Chartered MCSI Cert PFS CEI Compliance Consultancy
  2. 2. Introduction The FSA have warned that Financial services firms should pay particular attention to their various social networking and other internet communications including iPhone apps to make sure that they stay up to date and compliant with the FSA handbooks Problem The FSA has studied the way that financial services companies communicate to the public and has found that some of communication through new media channels lacks compliance with its safeguards. The Rules Financial Promotions rules are clearly provided in Conduct of Business Sourcebook (COBS) Chapter 4 and firms must apply all the strict advertising rules their formal communications are subject to, strangely enough, use of Twitter, Facebook, networking sites or message boards. CEI Solutions Solution 1 Contents Ensure that whenever you advertise on any other “new media” communication channel,Introduction 2 make sure that you do not include anything other than “image” advertising content.Problem 2The Rules 2 Solution 2CEI Solutions 2 If you are going to post anything on a message board or Networking Site page,Summary 3 ensure that it fulfills the requirements of the FSA. See COBS 4, MCOBS 3 and don’t forget ICOBS contains no exceptions for image advertising. Solution 3 If in doubt call us to look into your campaign and the impact of the regulations.
  3. 3. Summary need to comply with all of the relevantThe safest way of using the new media is financial promotions rules.to ensure you apply the specific financialpromotions rules with the fundamental The treatment of image advertising variesstarting point of clear, fair and not depending on which sourcebook applies.misleading. So whatever medium you use to spread theThe FSA call this “stand-alone word you need to consider the financialcompliance”. This describes their promotions rules in most cases as theyexpectation that every financial promotion apply to your discipline. The FSA aremust comply with all of the relevant continuing to review and assess advertsfinancial promotions rules. It is not across all media types and categories.acceptable, for example, for any firm or However the message is clear from theindividual to purposely omit important risk regulator that they will take action againstinformation just because they intend to any firms that fail to produce stand-alonegive it later in the specific sales process. compliant financial promotions picked up through their monitoring or thematicWhat you have to consider about your reviews.financial promotion is COBS 4.2.2, whichstates "in a way that is appropriate and For the FSA Publication, please click here.proportionate taking into account themeans of communication and the For a description of “Stand Aloneinformation the communication is Compliance” please click here.intended to convey". CEI is a financial servicesIt is unclear if you were to state your compliance specialist consultancycompany name on a tweet in Twitter and helping all sizes of firm; from IFAs toadded a link to your company website Investment banks, with theirwhether this would be image advertising regulatory requirements andor a standalone financial promotion using compliance challenges.all 140 characters of that medium. It isunlikely that the FSA would be particularly For help with any of your compliancestringent or prescriptive in that area. issues, please call 0800 689 9 689So what is Image Advertising?Firms cannot assume that because acommunication is made using new media, Or emailit is an image advertisement and exemptfrom the financial promotion rules. Animage advertisement only consists of the enquiry@ceicompliance.co.ukname of the firm, a logo or other imageassociated with the firm, a contact pointand a reference to the types of regulatedactivities provided by the firm or to its feesor commissions. When a communicationgoes beyond the definition of imageadvertising, no matter how wellintentioned or innocent it may seem, it will

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