Quick Answer
FINRA classifies social media by whether content is static (retail communication, prior principal approval required) or interactive (may qualify for correspondence-style supervision instead). Every electronic communication, including email, text, and social posts, must be supervised and retained like any other communication. Adopting or entangling with third-party content makes the firm responsible for it.
The communications rules you have learned apply with equal force online. FINRA's communications rule reaches digital content the same way it reaches print: classify it, then apply the matching approval, supervision, and retention duties.
Is Social Media Content Static or Interactive?
FINRA treats social media content differently depending on whether it is posted for later viewing or exchanged in real time:
| Type | Definition | FINRA treatment | Approval required? |
|---|---|---|---|
| Static content | Pre-written posts, articles, profiles, blog entries; content posted for longer-term viewing with no real-time interaction | Treated as a retail communication (if accessible to more than 25 retail investors) | Yes, prior principal approval |
| Interactive content | Real-time or near-real-time exchanges: comments, chat, live posts, message boards | Keeps its own communication classification, but may qualify for correspondence-style supervision | No prior approval when the correspondence-style supervision exception applies |
- A firm-sponsored blog with static posts is a retail communication requiring prior principal approval.
- An associated person's real-time chat reply may be supervised like correspondence without being formally reclassified as correspondence.
- A firm's social media page posting a pre-written article is static content, treated as a retail communication.
Exam Tip: Gotchas
Static and interactive content can follow different approval procedures even on the same platform. A pre-written post is generally a retail communication needing prior approval. A live reply in the comments may use correspondence-style supervision instead, without becoming correspondence itself.
Who Supervises and Retains Electronic Communications?
- Firms must supervise and retain all electronic communications used to conduct securities business, including email, text messages, instant messages, social media posts, and website content
- The format does not create an exemption: an informal channel such as a text message is subject to the same supervision and retention duties as a formal letter
- Communications through digital channels remain subject to the same antifraud and not-misleading standards that apply to any other communication with the public
Exam Tip: Gotchas
- All electronic communications must be retained and supervised, regardless of channel. There is no exemption for informal channels like text or instant message.
When Does a Firm Adopt Third-Party Content?
- 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 is fair, balanced, and 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 adopted that misleading content.
- A plain hyperlink for general reference does not automatically constitute adoption, but adding commentary or endorsement does.
How Does This Apply to a Firm's Website?
A firm's website and other internet communications are subject to the same standards as any other communication with the public:
- A firm's website content is a communication with the public: it must be not misleading, fair, and balanced, and it must be retained like any other electronic communication.
- The firm is fully responsible for the content it publishes on its own site. Static content the firm posts and controls (its homepage, product descriptions, professional bios) is treated as the firm's own communication.
- For interactive or third-party content (a live chat, a comment thread, a linked outside article), responsibility turns on adoption and entanglement: if the firm endorses, adds commentary to, or incorporates the content, it adopts that content and becomes responsible for it (see above).
- The Administrator may require the filing of advertising and sales literature, and website content is not outside that authority simply because it is online.
- FINRA requires a member firm's website to include a readily apparent reference and hyperlink to BrokerCheck on the initial page viewed by retail investors and on any page with a registered person's professional profile.
Exam Tip: Gotchas
- "It's just our website" is not a defense. A misleading statement on a firm's website is a misleading communication, subject to the same antifraud and not-misleading standards as a printed brochure or a phone call.
What Should You Check on Exam Day?
- Static content (a firm's own posts, homepage, bios) is generally a retail communication needing prior principal approval; interactive content (live chat, real-time replies) may use correspondence-style supervision instead.
- All electronic communications, formal or informal, must be supervised and retained; there is no exemption for text messages or social posts.
- "Liking," sharing, or adding commentary to third-party content can make the firm responsible for that content; a plain reference hyperlink usually does not.
- A firm's public website must link to BrokerCheck on pages viewed by retail investors.