Once again, the regulator seems to have missed the point of social media. Policymakers are clearly worried the nation is made up of halfwits who will plunge all of their life savings into a dodgy investment no questions asked having glimpsed a positive tweet.
Insisting they did not want to restrict the use of social media, the FCA’s paper warns it thinks any Tweet or Facebook post “is capable of being a financial promotion, depending on whether it includes an invitation or inducement to engage in financial activity”.
So, let us pick through the high and low lights of the latest sets of rules.
1. All posts could be promotions.
After reading the latest FCA social media rules, I am still not 100 per cent sure any post you make can ever not be construed as a financial promotion.
The FCA insists that’s not the case, citing who a message is sent to (i.e. is it sent to clients or prospective clients) and whether or not it mentions products. In the latter case, even a retweet of a positive message mentioned a product might classify it as a promotion.
In terms of what do you do if a tweet intended for another authorised person is retweeted to a retail customer, the FCA rules firms should take steps in their labelling and targeting of communications to mitigate the risk of this happening.
To make sure you stay on the right side of the lines, sign-off of “digital communications” should be by a person of appropriate competence and seniority. Firms are also told that they need to keep records of “significant communications” outside of the social media platform.
That’s going to be a challenge for networks in particular to ensure compliance.
2. The ‘links’ effect.
Advisers hoping the regulator would recognise there is only so much you can say in a Tweet were disappointed.
Where promotions rules are triggered the FCA requires you to include risk warnings or other statements. The rules remain media-neutral and will not be adapted for certain types of social media.
When taken into account with the FCA’s supervisory approach to standalone compliance, the regulator does at least recognise “this poses particular challenges for the use of character-limited social media.”
As such, it has seemingly give a thumbs up to the use of infographics into communications such as tweets - before then going on to admit these alone will not ensure you don’t get a nasty telephone call from the FCA as not all users can see them.
Therefore, the FCA ruled where the financial promotion triggers a risk warning or other information required by our rules, this cannot appear solely in the image. One commenter has already suggested using short links to longer warnings, which is probably useful advice.
3. Re-publishing risk.
You can also get in trouble now for what our clients say about you on social media. As alluded to earlier, the FCA stated if a firm retweets a customer’s tweet, for example, whether or not it is a financial promotion will depend on the content.