United States:
FINRA To Review Firms' Use Of Social Media Channels To Acquire Customers
21 September 2021
Cadwalader, Wickersham & Taft LLP
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FINRA will review (i) firms' customer
acquisition practices that utilize social media channels, and (ii)
firm compliance with related obligations to protect customer
information.
In guidance issued on September 16, 2021, FINRA stated that it
will review, among other things:
- firms' engagement with social media influencers, which are
third parties that firms compensate for posting content or
advertisements;
- whether firms offer referral programs and what recruitment
materials they use; and
- firms' written supervisory procedures with respect to (i)
third-party social media communications, (ii) the use of marketing
affiliates and referral programs and (iii) Regulation
S-P("Privacy of Consumer Financial Information and
Safeguarding Personal Information") compliance.
Primary Sources
- FINRA Targeted Exam Letter: Social Media
Influencers, Customer Acquisition, and Related Information
Protection
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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