Social Media, Email, and Digital Communications
Now that you understand the traditional advertising rules, let's see how FINRA applies them to the digital world. The key concept is the static vs. interactive distinction.
Applying FINRA Rule 2210 to Social Media
FINRA classifies social media content based on whether it is static or interactive:
| Type | Definition | FINRA Treatment | Prior Approval Required? |
|---|---|---|---|
| Static content | Pre-written posts, articles, profiles, blog entries - content posted for longer-term viewing with no real-time interaction | Treated as retail communication (if accessible to > 25 retail investors) | Yes |
| Interactive content | Real-time or near-real-time exchanges (comments, chat, live posts, message boards, real-time forums) | Treated like correspondence | No - supervised like correspondence under Rule 3110 |
Examples
- A firm-sponsored blog with static posts = retail communication -> prior principal approval required
- An associated person's real-time tweet reply or chat message = interactive content -> supervised like correspondence
- A firm's Facebook page posting a pre-written article = static content = retail communication
- A live Q&A session on social media = interactive content = correspondence
Exam Tip: Gotchas
- Static = retail communication (prior approval required); Interactive = correspondence (supervision only, no prior approval). The medium does not change the classification. Only the real-time vs. pre-written nature matters.
- A blog post is static even though it is on the internet. The key question is whether the content is pre-written or real-time.
Third-Party Content and Endorsements
- If a firm or associated person shares, links to, or "likes" third-party content, the firm may be deemed to have adopted that content
- Adoption makes the firm responsible for ensuring the content meets FINRA 2210 content standards (fair, balanced, not misleading)
- Simply providing a hyperlink to third-party content for general reference (without endorsement) does not necessarily constitute adoption, but context matters
- A firm that "entangles" itself with third-party content (adding commentary, endorsing it, or incorporating it into its own materials) takes on responsibility for that content
Exam Tip: Gotchas
- "Liking" or sharing third-party content can make the firm responsible for it. If the third-party content is misleading, the firm has violated FINRA 2210 by adopting it.
- A plain hyperlink for general reference does not automatically constitute adoption, but adding commentary or endorsement does.
Email and Digital Messaging
Email communications follow the same classification rules as any other written communication:
| Scenario | Classification |
|---|---|
| Mass email to > 25 retail investors in 30 days | Retail communication (principal approval required) |
| Email to 25 or fewer retail investors in 30 days | Correspondence (supervisory review) |
| Email only to institutional investors | Institutional communication |
- Text messages, instant messages, and other digital messaging follow the same classification rules
- Firms must retain and supervise all electronic communications, including emails, texts, and social media posts (FINRA Rules 3110, 4511; SEC Rules 17a-3, 17a-4)
Exam Tip: Gotchas
- All electronic communications must be retained and supervised, regardless of classification. There is no exemption for informal channels like text or instant message.
Websites and Internet Communications
- A broker-dealer's public website is generally treated as a retail communication because it is accessible to more than 25 retail investors
- Password-protected areas accessible only to institutional investors may be treated as institutional communications
- Website content must comply with all FINRA 2210 content standards
- FINRA requires member firm websites to include a readily apparent reference and hyperlink to BrokerCheck on pages viewed by retail investors
Exam Tip: Gotchas
- A public website = retail communication (principal approval required). A password-protected section accessible only to institutional investors may be treated differently.
- The BrokerCheck hyperlink requirement applies to pages viewed by retail investors. It is not optional.