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

  1. FINRA Targeted Exam Letter: Social Media Influencers, Customer Acquisition, and Related Information Protection

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