The communications rules you have learned apply with equal force online. The Series 63 does not test the federal classification mechanics for digital content; it tests the underlying duties: supervise and retain electronic communications, and do not mislead through digital channels or adopted third-party content.
Supervising and Retaining 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.
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 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.
Website and Internet Communications
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.
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.