The Financial Conduct Authority (FCA) has launched a consultation which is intended to clarify its approach to the supervision of financial promotions in social media.
From extensive conversations with industry over the past 18 months, the FCA is fully aware of the increase in firms’ use of digital media for customer communications and specifically for financial promotions.
More particularly, firms are using, or wanting to use social media for their communications with customers.
However, many firms perceive difficulties in complying with some of the FCA rules, particularly with the financial promotion rule for character-limited forms of social media such as Twitter.
The FCA has therefore published a consultation which sets out its approach and seeks feedback to be submitted by November 6.
Clive Adamson, director of supervision at the FCA said: “The FCA sees positive benefits from using social media but there has to be an element of compliance.
"Primarily, what firms do on social media must ensure customers are at the heart of their business.
“Our overall approach is that financial promotions, whether on social media or traditional media, should be fair, clear and not misleading.
"We have had extensive industry engagement on this issue and we believe our guidance is a sensible approach that doesn’t affect industry’s ability to innovate using new forms of media.
"We recognise social media are constantly evolving. We, therefore, welcome feedback to today’s consultation and look forward to continuing the discussion with industry.”
The FCA said it does not want to prevent the use of social media. However, firms are reminded that any form of communication (including through social media) is capable of being a financial promotion, depending on whether it includes an invitation or inducement to engage in financial activity.
Therefore it remains a fundamental requirement that all communications (including financial promotions) are compliant, it said.
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