Compliance Solutions for Investment Advisers

SEC Issues Guidance Update on Social Media Filings

The Securities and Exchange Commission has published a guidance update from its staff to clarify the obligations of mutual funds and other investment companies to seek review of materials posted on their social media sites.

The guidance from the Division of Investment Management is the first in its “IM Guidance Update” series, which will offer the staff’s views on emerging legal issues. The goal of the guidance is to increase transparency and enhance compliance with federal securities laws and regulations.

Mutual funds and other investment companies are required to file certain advertisements for review by Financial Industry Regulatory Authority (FINRA). The SEC staff has learned that out of an abundance of caution, many mutual funds and other investment companies may file materials on their social media sites with FINRA unnecessarily.

The IM Guidance Update provides examples of the kinds of communications that the staff believes would be subject to a requirement to file with FINRA and examples of communications that would not trigger a filing requirement.

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