The Financial Conduct Authority (FCA) has finalised its rules for firms using social media to promote financial services, advising how to handle an increasingly “important tool” for the industry.
The FCA launched a consultation on the issue in August last year, with the intention of helping firms understand how they can continue to comply with regulatory guidelines while using social media sites.
The new guidance sets out a number of rules such as the requirement that investment product promotions are clearly labelled and not misleading.
“Our view is that – for social media in particular – it is important that, in all cases, it is clear that a promotion is a promotion. This can be by labelling the promotion as such, or it may be clear from the context.”
One of the challenges for firms is that many social media platforms, such as Twitter or Facebook, restrict the amount of information that can be posted at one time.
The FCA said that despite this, firms are still required to provide full risk warnings and other statements as they would on any other advertisement. One possible solution would be to insert images and infographics into communications such as tweets, which allow more information to be displayed.
The finalised guidance can be viewed here.
Commenting on the launch of the guidance, Tracey McDermott, FCA Director of Supervision and Authorisations, said: “Social media is already an important tool for industry to engage with customers and its use is only likely to grow.
“We believe this guidance reflects a sensible approach that allows the industry to innovate using new forms of media and at the same time ensures customers get the right level of protection.”