A targeted examination letter from the
The letter, which went out to an undisclosed number of firms this month, makes six requests ranging in scope from a general explanation of social media use to the names and
“They’re basically saying that firms at this point who are practicing with social media have had plenty of time to work out their policy and get the technology in place to enforce those policies, and they should be adhering to what they said they were going to at this point,” Douglas said. “The technology has matured to a point where responsible adoption is a reasonable expectation of firms.”
The letter also requests information such as the URL for each social media site used by the firm at the corporate level, the portion of the firm’s supervisory procedures that concern social media use, and an explanation of measures that the firm has in place to monitor compliance, including training, certification and technology.
FINRA and the
A FINRA spokesperson was not available for comment on how many firms received the letter or how the results of the inquiry would be used. Generally examinations, which are issued a few times each year on timely topics, are used “to focus examination and pinpoint regulatory response to emerging issues,” the regulator said on its site.
The goal was less about punishing firms and more about measuring how successful firms had been in rolling out social media. “It could turn into something more,” said
The targeted examination letter is a broader version of what FINRA has already been requesting from firms and should come as no surprise, Douglas said. Other firms could also use the letter to anticipate what FINRA looks for when assessing social media compliance.
“A lot of people have seen this coming for a while now,” he said. “It provides a framework for all firms out there and not exclusively those being spot checked to have a sense for what FINRA is going to be looking for and how they can measure their success.”
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