In a Risk Alert issued today, the SEC’s Office of Compliance Inspections and Examinations has provided a list of compliance issues relating to Rule 206(4)-1 (the “Advertising Rule”).
Investment advisers must be able to monitor what their supervised persons are saying about the firm in their social media posts and should be able to monitor what others are saying about the advisory firm.
Since most social media activity occurs off-site and through mobile phones, advisory firms need to have the capability of applying all their social media policies and procedures to mobile devices.
Advisory firms must be able to capture and archive the posts and tweets of their supervised persons. Firm’s also need to be able to conduct a key word search for problematic terms.
Social media posts are advertising. Any disclaimer that you would typically place on your advisory firm’s web site should also accompany any social media posts. Since the nature of social media is to allow third-parties to post comments, it is … Continued
Among top five social media issues for advisers . . . Written Policies & Procedures Advisory firms must develop a written policy and attendant procedures that outlines, at the very least: The types of social media platforms (e.g., Twitter, Linkedin, … Continued
Yesterday, for whatever reason, I was rummaging around a few adviser web sites and came across one that included a testimonial. How did I know it was a testimonial? Was it my compliance expertise? My familiarity with the nuances of … Continued
Make sure you can verify your performance numbers and that you maintain all records necessary to substantiate the performance. The SEC is hunting down performance outliers. If you are posting numbers that wildly outperforms a benchmark the SEC will take … Continued
Advertising and marketing will always be a primary area of concern for regulators. Underscoring this is the SEC most recent Presence Exams Letter which listed “Marketing” as its first substantive subject. That letter stated that the Office of Compliance Inspections … Continued
A copy of the SEC Social Media Document Request Letter is reprinted below. Perhaps it is time to revisit your social media policies and procedures. …………………. DOCUMENTS TO BE PRODUCED Please produce the following documents within Adviser’s possession or custody … Continued
Last August, in order to comply with the Congressional mandate to implement Section 201(a)(1) of the JOBS Act, the SEC proposed a rule that would remove the general solicitation ban for certain 506 offerings in which sales of securities would … Continued
Whether a third-party statement is a testimonial depends upon all of the facts and circumstances relating to the statement. The term “testimonial” is not defined in Rule 206(4)-1(a)(1), but SEC staff consistently interprets that term to include a statement of … Continued
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 … Continued
The SEC’s National Examination Program (NEP) examination priorities for 2012 lists marketing and performance advertising as a key focus area. Specifically, the NEP release states: “Marketing and performance advertising is an inherently high-risk area due to the highly competitive nature … Continued
An increasing number of states are passing privacy laws that conflict with book and record keeping requirements of SEC-registered investment advisers. If a social media post is considered advertising, an SEC-registered investment adviser is required to keep a record of … Continued
A steady stream of features being added to social media such as Facebook, Twitter and LinkedIn will test financial advisers’ ability to comply with securities law and company policy. LinkedIn’s endorsement feature could inadvertently put advisers in violation of regulations … Continued
Because I receive a live feed from the SEC, I get between 6 and 12 SEC press releases every day. Most deal with actions brought by the SEC against a variety of individuals and firms and most are, quite frankly, … Continued
We all know that there are regulatory issues specific to registered investment advisers’ use of social media. This article from the Wall Street Journal shows that awareness of your employees use of social media should not be limited to regulatory … Continued
Dear Compliance Professional, Rarely do we see the SEC Office of Compliance Inspections and Examinations issue a National Examination Risk Alert. So when they do, we pay particular attention. Last week, OCIE issued just such a National Examination Risk Alert … Continued
FINRA is publishing this Notice to remind firms of their supervisory obligations regarding the use of certifications and designations that imply expertise,certification, training or specialty in advising senior investors (senior designations). This Notice also outlines findings from a survey of firms and … Continued