Social media & financial promotions
The consultation period on the FCA’s approach to social media ended on the 6th November. It followed the publication of guidance notes, intended to clarify the use and supervision of social media for promotions, in August and an invitation for people to comment.
Clive Adamson, Director of Supervision at the FCA said: “The FCA sees positive benefits from using social media but there has to be an element of compliance. Primarily, what firms do on social media must ensure customers are at the heart of their business.
“Our overall approach is that financial promotions, whether on social media or traditional media, should be fair, clear and not misleading. We have had extensive industry engagement on this issue and we believe our guidance is a sensible approach that doesn’t affect industry’s ability to innovate using new forms of media. We recognise social media are constantly evolving. We, therefore, welcome feedback to today’s consultation and look forward to continuing the discussion with industry.”
FCA’s view of social media
The FCA make no exceptions for social media when it comes to financial promotions and regulations. The rules are intended to be media-neutral to ensure customers always receive information in a fair and balanced way regardless of how they view, hear or read promotions.
Social media includes:
- Microblogs (e.g. Twitter)
- Social Networks (e.g. Facebook, LinkedIn, Google+)
- Image & Video Sharing Platforms (e.g. Instagram, YouTube, Pintrest, Vine)
The fact that most social media have either character, space or time constraints, which limit the amount of information that can be contained within a promotion, does not exempt them from the rules.
Social media communications can reach a wide audience very quickly and they can reach unintended audiences too. Companies should take this into consideration when deciding whether to carry out financial promotions using social media.
Purpose of the FCA’s guidance notes:
- Remind companies of the overarching principle that all promotions, including those utilising social media, are fair, clear & not misleading.
- Highlight that the rules on financial promotions are media-neutral and there are no concessions for social media.
- Clarify the approach the FCA will take to supervising financial promotions made using social media.
- Provide guidance on how companies can comply with regulations when using social media.
You can read the guidance consultation document on the FCA’s website: Social media and customer communications – the FCA’s supervisory approach to financial promotions in social media