Proposed FINRA Rule On Social Media Supervision Modified

FINRA has sought to have the SEC approve proposed FINRA Rule 2210 relating to communications with the public (similar to NASD Rule 2210 dealing with the same subject).  In a letter to the SEC dated December 22, 2011, FINRA responded to comment letters on the proposed rule, as well as other proposed rules.  As it relates to social media use and other online electronic communications (not email), FINRA has explained that it believes that participation in online forums occur in real-time, and that it is not practical to require pre-use approval of such postings by a principal.  Nevertheless, these communications must still be supervised by firms.  Addressing concerns as to whether they are correspondence or public appearances, FINRA has explained that participation in an interactive electronic forum would fall under the "retail communication" category of communication and would be supervised by broker-dealers in the same manner as required for supervising correspondence.  Recognizing the difficulties of supervision in these areas if pre-use filing was required, FINRA has amended proposed FINRA Rule 2210(c)(7) to add an exclusion from filing for such communications posted online in interactive forums.  FINRA makes clear, however, that the exemption from filing would not apply if any other filing requirement arises under federal law or pursuant to SEC rules.  (See pages 10-12 in the letter at the link above).