The document outlines the Financial Services Authority's (FSA) guidance on compliance for financial promotions through social media and new media communications. It emphasizes that firms must adhere to strict financial promotion rules, including ensuring that any content goes beyond mere image advertising and does not omit important risk information. The FSA continues to monitor compliance across all media types and will take action against firms that fail to meet these standards.

1. 2011
Social Advertising
Financial Promotions
When is a Non-Advert an Advert?
June 2011
th
30 June 2010
Lee Werrell FInstSMM Chartered MCSI Cert PFS
CEI Compliance Consultancy

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 2
The Rules 2 Solution 2
CEI 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. Summary need to comply with all of the relevant
The safest way of using the new media is financial promotions rules.
to ensure you apply the specific financial
promotions rules with the fundamental The treatment of image advertising varies
starting point of clear, fair and not depending on which sourcebook applies.
misleading.
So whatever medium you use to spread the
The FSA call this “stand-alone word you need to consider the financial
compliance”. This describes their promotions rules in most cases as they
expectation that every financial promotion apply to your discipline. The FSA are
must comply with all of the relevant continuing to review and assess adverts
financial promotions rules. It is not across all media types and categories.
acceptable, for example, for any firm or However the message is clear from the
individual to purposely omit important risk regulator that they will take action against
information just because they intend to any firms that fail to produce stand-alone
give it later in the specific sales process. compliant financial promotions picked up
through their monitoring or thematic
What you have to consider about your reviews.
financial promotion is COBS 4.2.2, which
states "in a way that is appropriate and For the FSA Publication, please click here.
proportionate taking into account the
means of communication and the For a description of “Stand Alone
information the communication is Compliance” please click here.
intended to convey".
CEI is a financial services
It is unclear if you were to state your compliance specialist consultancy
company name on a tweet in Twitter and helping all sizes of firm; from IFAs to
added a link to your company website Investment banks, with their
whether this would be image advertising regulatory requirements and
or a standalone financial promotion using compliance challenges.
all 140 characters of that medium. It is
unlikely that the FSA would be particularly For help with any of your compliance
stringent or prescriptive in that area. issues, please call
0800 689 9 689
So what is Image Advertising?
Firms cannot assume that because a
communication is made using new media, Or email
it is an image advertisement and exempt
from the financial promotion rules. An
image advertisement only consists of the enquiry@ceicompliance.co.uk
name of the firm, a logo or other image
associated with the firm, a contact point
and a reference to the types of regulated
activities provided by the firm or to its fees
or commissions. When a communication
goes beyond the definition of image
advertising, no matter how well
intentioned or innocent it may seem, it will