The Financial Industry Regulatory Authority proposed new rules to exempt its members from having to obtain approvals prior to posting communication on their social media networks. In the proposal submitted to the Securities and Exchange Commission, FINRA said the exemptions are granted to members provided that they are watching the communication materials in the same manner as other correspondence as outlined in NASD rule 3010(d).
The agency listed two supervisory exemptions for social media communication. The first exemption applies to retail communication on social media networks and another exemption addresses retail communication that precludes financial forecasts and promotion of products or services.
The new rules NASD 2210 and NASD 2211 were proposed following comments received from nine organizations asking the agency to address and to revise the supervision requirements for social networking sites. Given the new definition, it will clarify the confusion caused by the previously published Notice 10-06 that did not spell out the requirements.
In the same announcement, FINRA also proposed to change its communication categories from six to three. The new categories are
- Institutional - Written communication available to institutional investors only
- Retail - Written communication distributed to more than 25 retail investors within a 30-day period
- Correspondence - Written communication distributed to less than 25 retail investors within a 30-day period
All public comments to the proposed rules must be received by August 24, 2011.