Financial Regulatory Forum

Social media regulatory guidance for U.S. banks: a road map for the finance industry

By Margaret Paradis, Thomson Reuters Accelus Contributor

NEW YORK, March 15 (Thomson Reuters Accelus) - The pace of social media usage by the U.S. financial industry has begun to rapidly accelerate. One drag on broader and deeper usage, especially by banks, continues to be uncertainty about regulatory compliance standards. Not all segments of the industry have been moving at the same pace. The broker-dealers and insurance companies have forged ahead in this area, relying on issued regulatory guidance. Additionally, asset management is catching up with the benefit of regulatory guidance issued early in 2012. Banking organizations, however, have been acting without specific guidance in this area, creating an extra risk.

In January 2013, the Federal Financial Institutions Examination Council (FFIEC) addressed this risk by proposing specific guidance for the use of social media by federally supervised banks, and certain nonbank entities (collectively, banks), called Social Media: Consumer Risk Management Guidance (PDF)(more…)

IA brief: If you haven’t joined the social media bandwagon, you’re not alone

By Jason Wallace, Compliance Complete

NEW YORK, Feb. 27 (Thomson Reuters Accelus) – Financial planners use social media in their personal lives but shy away from it professionally out of concern over compliance issues and an uncertain regulatory environment, a recent survey reveals.

The survey of 3,500 certified financial planners was conducted by the Certified Financial Planner Board of Standards and released at the end of January It was accompanied by a social media guide for CFP professionals that can be broadly useful to any investment adviser representative, credentialed or not.  (more…)

IA brief: State laws may require firms to re-think social media policies

By Jason Wallace

NEW YORK, Oct. 3 (Thomson Reuters Accelus) – Federal and state privacy legislation aiming to protect against employer access to private social media websites may put the investment industry in a bind — unable to fully supervise social-media and electronic communications used by their representatives.

Broker-dealers and investment advisory firms have been carefully embracing social media over the last few years. Firms have shaped policies and procedures with a balance between the needs and wants of their representatives while still making it possible to supervise and ensure compliance with regulatory regulations and guidance.

(more…)

IA brief: State regulator’s deficiency letter offers clues for social-media policies

By Jason Wallace

NEW YORK, May 25 (Thomson Reuters Accelus) – A state regulator’s letter to an investment advisory firm outlining shortcomings in the firm’s use of social media also gives an early clue to how regulators will scrutinize the financial industry’s growing use of services like Facebook and LinkedIn.

The “exam deficiency” letter was provided by a source familiar with the case to Thomson Reuters on the grounds that neither the source nor the target of the letter be identified. Such letters, which specify areas in which a firm’s regulatory compliance falls short, are issued by a regulator after an examination of a firm. (more…)

The compliance lessons, so far, arising from the UBS rogue trader

LONDON, Sept. 23 (Thomson Reuters Accelus) – UBS’s loss of $2.3 billion has hit the headlines worldwide, and while full details of what went wrong are unlikely to be public in the near future there are already compliance lessons for other firms. UK and Swiss regulators have launched an investigation into:

    the details of the unauthorised trading activity;
    the control failures which permitted the activity to remain undetected; and
    the overall strength of UBS’ controls to prevent unauthorised or fraudulent trading activity in its investment bank.

Although the investigation is ongoing, and the regulators have expressly stated that they do not, as yet, have an expected timescale, there are a number of lessons or steps for other firms to consider. (more…)

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