Financial services social media

Financial Services & Social Media

Review of FINRA Regulatfor Providing Guidance to Member Firms

Financial Services & Social Media

Review of FINRA Regulations and a Suggested Framework for Providing Guidance to Member Firms

March 15, 2010

Copyright 2010, Catherine Sherwood | Real Communications. All rights reserved. 2

T A B L E O F C O N T E N T S

1. Summary.....................................................................................................................................3

2. Introduction................................................................................................................................4

3. Industry Perspective: Interactive Electronic Communications...................................................6

4. Industry Perspective: Responsibility for Third-Party Content ...................................................9

5. Industry Perspective: Supervision of Employees’ Social Media Use ........................................10

6. Social Media Perspective: Interactive Electronic Communications.........................................11

6.1. A Taxonomy of Social Media Venues................................................................................12

6.2. Characteristics of Interactive Electronic Communications...............................................13

6.2.1. Interactivity with Third Parties .................................................................................13

6.2.2. Real-time and Near-time Exchanges.........................................................................14

6.3. Virtual Appearances..........................................................................................................14

6.4. Electronic Communication................................................................................................15

7. Social Media Perspective: Responsibility for Third-Party Content...........................................16

7.1. Content Sharing ................................................................................................................17

8. Social Media Perspective: Supervision of Employees’ Social Media Use .................................18

9. Conclusion.................................................................................................................................20

Appendix A: Summaries of Social Media and Related Venues.........................................................22

About the Author..............................................................................................................................38

Endnotes ...........................................................................................................................................39


1. S U M M A R Y

The Financial Industry Regulatory Association (FINRA) has – since 2003 – been providing

intermittent guidance on the use of social media for its more than 4,700 member firms. In

September 2009, they set up a Social Networking Task Force to try and develop more

comprehensive regulations. However, they have yet to provide enough guidance for many

financial services companies to feel comfortable using social media as a means of marketing to

prospects and communicating with existing clients.

This white paper provides an overview of:

the rulings, to date, from FINRA that relate to social media,

the input submitted to FINRA by several member firms on issues regarding social media

and organizes that information into three categories:

Interactive Electronic Communications

Third-Party Content

Supervision of Employees’ Use of Social Media

This paper also provides an overview of all social media and related interactive venues, including

detailed descriptions of all these categories.

It offers a way to assess each of these categories along key criteria to determine if it qualifies as

Interactive Electronic Communications, plus addresses the phenomenon of Content Sharing so

common in the social media.

It also provides thoughts on what venues should fall under the categories of Virtual Appearances

and what technology should be added to the category of Electronic Correspondence.

Finally, it addresses the differences between social media programs that are managed and

implemented by a small social media or marketing group within a financial services company and

what guidance and safeguards need to be in place for registered reps’ use of the social media.


2. I N T R O D U C T I O N

Over the last few years, FINRA and its member organizations have been struggling with how to

regulate communications in the social web; as a result, there has not been enough guidance to

make most financial institutions comfortable in this new environment. While other companies

that interact with consumers have been able to make social media a key part of their marketing

and communications plans, financial services companies have had to tread lightly because of the

sometimes stringent and, often, inconsistent regulations they have to work with.

This creates a disadvantage since statistics show that not only do many consumers live in the

social web, but a vast majority of them use social media to find recommendations before they buy

products or services.

SOCIAL MEDIA FACT SHEET

If Facebook were a country it would be the world’s 4th largest – between the United States and Indonesia.1

More than 1.5 million pieces of content (web links, news stories, blog posts, notes, photos, etc.) are shared on Facebook…daily.2

LinkedIn has 30.1 million users, with lowest average household income at $87,5003

78% of consumers trust peer recommendations 4

Only 14% trust advertisements5

At first glance, the regulatory challenges surrounding social media seem similar to the 1990’s

when first, email communications, then the Internet needed to be addressed. However, the

differences between print and these earlier versions of electronic communications were not so

different. Email is similar to an electronic version of a letter – a one-way communication that can

be pre-approved, if necessary, and easily stored for reference. The Web 1.0 world was,

essentially, a one-way communication as well. It was “brochureware” that only interacted

minimally with the consumer.

1 Source: Facebook2 Source: Facebook3 “2008 Social Media Statistics”, Austin’s New Media Lab4 Source: July 2009 Nielsen Global Online Consumer Survey5 Source: “Marketing to the Social Web,” Larry Weber, Wiley Publishing 2007


However, neither of these modalities has the volatility of social media. The social web allows for

multiple levels of contributions, the number and types of social venues are constantly evolving,

and what constitutes the “web” is getting blurred by apps that bring web features to mobile

devices. In addition, except for company-created blogs and private-label communities, the social

web is controlled by others, making the pre-approval and record-keeping process much more

difficult than it is on a company-controlled website.

So far, FINRA has published some regulations that address social media by extending rules for the

Internet and for traditional communications in a piecemeal fashion. In September 2009 FINRA

formed a Social Networking Task Force comprised of both FINRA staff and industry

representatives to find ways that “firms and their registered representatives could use social

media sites for legitimate business purposes in a manner that ensures investor protection.”6 Soon

after, FINRA put out a formal request for comments on the “Proposed New Rules Governing

Communications with the Public” (FINRA Regulatory Notice No. 09-55)A and received three

responses that addressed the issue of social media. Two responses were from industry

organizations – the Investment Company InstituteB (ICI) and the Financial Services InstituteC; the

third, and most extensive, was from Fidelity Investments. D

What emerged from the responses was a request that a new category of communications be

created to cover social media. ICI suggested that this new category be called “Interactive Retail

Communications” and Fidelity Investments used the term “Interactive Electronic

Communications,” but the prevailing opinion was that trying to fit social media under prior

Internet or traditional communications rules would not work. Related concerns included

Responsibility for Third-Party Content, Supervision of Employees’ Social Media Use, and Record

Keeping.

To date, the dialogue around social media has been dominated by the perspective of regulators

and financial services industry members, not from those who have a broader view of social media

in all of its iterations. This paper’s intent is to summarize the views of FINRA and those industry

members who responded to Regulatory Notice 10-06 and to see how those views match up

against the many real-world scenarios that can occur on the social web. This paper is not meant

to give an interpretation of issues regarding compliance.

6 FINRA Regulatory Notice 10 -06, Social Media Web Sites: Guidance on Blogs and Social Networking Web Sites


3. I N D U S T R Y P E R S P E C T I V E : I N T E R A C T I V E E L E C T R O N I C C O M M U N I C A T I O N S

Interactive Electronic Communications is the term that Fidelity Investments used when requesting

that a new category of regulations be created. Their argument for this approach was based on

prior communications and rules from FINRA that compared some types of electronic

communications to real-time public appearances, and therefore not subject to prior approval and

filing requirements.

1999 – FINRA stated that some types of electronic communications, specifically chat

rooms, were considered real-time Public Appearances. They seemed to imply that bulletin

boards could fall into the same category in a subsequent “Ask the Analysts” session.E

2003 – FINRA officially included Interactive Electronic Forums as Public Appearances.7

2009 – Guide to the Internet for Registered RepsF and related podcastsG, still put chat

rooms under the guidance of Public Appearances, but considered blogs and bulletin

boards to be Advertisements. They also addressed the issue of profiles created on social

networking sites by firm members and designated the content of those profiles that are

open to the public as Advertisements and those that have restricted access as Sales

Literature.

2010 – Regulatory Notice 10-06, Social Media Web Sites: Guidance on Blogs and Social

Networking Web Sites restated that “interactive electronic forums” do not require pre-

use approval, but member firms still must supervise these communications and put

policies and procedures in place. Interactive electronic communications were now

defined as:

Chat rooms

Online seminars

Blogs that “engage in real-time interactive forums”8

Interactive posts on sites such as Twitter and Facebook 9

The following venues were considered Advertisements:

Static blogs (those without reader comments)

Static portions of sites like Twitter and Facebook10

7 NASD Rule 2210(a)(5)8 FINRA Regulatory Notice 10 - 06, Social Media Web Sites: Guidance on Blogs and Social Networking Web Sites (Endnote 11) “The key to this distinction between whether a blog is considered an advertisement versus an interactive electronic forum is whether it is used to engage in real-time interactive communications with third parties.” 9 FINRA Regulatory Notice 10 - 06, Social Media Web Sites: Guidance on Blogs and Social Networking Web Sites10 Ibid


Simple “bulletin boards”11

In its response, Fidelity asked that Interactive Electronic Communications be considered a

“fourth”12 category of communications and defined it as “an electronic communication the

purpose of which the member firm reasonably believes is to respond to, or interact with, Retail or

Institutional Investors in real-time.”13 Fidelity then suggested that FINRA provide guidance on

what types of communications could be included in this category. Fidelity gave the following types

of communication as examples of real-time communications:

Micro- blogs (such as tweets)

Chats

Immediate bulletin boards

Text messages

Fidelity then went on to suggest that this new category be covered under the supervision

requirements that apply to Correspondence. This would, according to Fidelity, lift the need for

prior approval but still keep risk-based surveillance procedures in effect. They cited FINRA’s

February 2009 inclusion of Market Letters under the rules of Correspondence as a precedent for

putting additional categories of communications under the Correspondence rules.H They also

stated that “firms would continue to be required to file Interactive Electronic Communications

that are covered under the current filing requirements.”14

One issue that arises from Fidelity’s suggested approach is that Correspondence, including Market

Letters, require pre-approval if they go to 25 or more customers. With the exception of text

messages, the electronic communications that they mention are likely to reach the 25-customer

threshold and, therefore, would not lift the prior approvals rule, as Fidelity claimed.

A second issue is that Fidelity is proposing to move chat rooms and “immediate bulletin boards”

out of the Public Appearance category, creating more restrictions. This may have been their

intent, but it seems to be in conflict with their statement that “firms would continue to be

11 FINRA Guide to the Internet for Registered Reps12 Note: FINRA refers, at times, to four categories of communication (Advertisements, Sales Literature, Correspondence, and Public Appearances); they also include two additional categories in Rule 2210 –Independently Prepared Reprints and Institutional Sales Materials. It is not clear why Fidelity referred to their suggested new category as the “fourth” category.13 Fidelity Investment Response to FINRA Regulatory Notice 09-5514 Ibid


required to file Interactive Electronic Communications that are covered under the current filing

requirements.”15

Finally, there is another issue concerning the definition of terms and what is considered real-time

versus non real-time. For example:

Chats and chat rooms are different so the terms need to be used precisely. A chat is a

one-on-one communication, while chat rooms have multiple people interacting with

others.

FINRA uses the term “interactive electronic forums” and Fidelity uses the term

“immediate bulletin board,” but the difference between these terms is unclear and

neither term is part of the general lexicon used by those familiar with social media.

FINRA should be clearer about what criteria they are using to define blogs “that engage in

real-time interactive forums.”16 The natural assumption is that they are referring to the

common inclusion of a “comments” section on blogs, which are sometimes near-time, not

real-time. If so, it should be stated.

ICI did not try to tie their “Interactive Retail Communications” category into pre-existing

communications categories. They simply stated that Interactive Retail Communications should be

“subject to pre-use principal approval,” except “to the extent that a firm determines that

particular communications instead should be subject to post-use principal approval because of

the time-sensitive nature of the information or other circumstances that warrant its prompt

dissemination.” They cited the Market Letter ruling as an example of not needing pre-use

approval. Like Fidelity, they did not take into account the fact that pre-use approval applies if

recipients of a Market Letter number 25 or more.

15 Ibid16 Ibid


4. I N D U S T R Y P E R S P E C T I V E : R E S P O N S I B I L I T Y F O R T H I R D - P A R T Y C O N T E N T

Fidelity, in its Response to FINRA Regulatory Notice 09-55, cited the SEC’s stance on third-party

contentI and urged FINRA to develop guidance that addresses issues such as the adoption of

third-party content and entanglement in the content’s creation. Soon after, in its January 2010

Regulatory Notice 10-06, FINRA did address these issues in detail, citing the SEC on the adoption

and entanglement issues, but taking its guidance much further. FINRA also explicitly addressed

the category of third-party posts.

FINRA described “entanglement” as follows: Entanglement occurs when content is either paid for

by the firm or its personnel were “otherwise involved with the preparation of the content prior to

posting.” 17 This is fairly straightforward.

According to FINRA adoption occurs “…if, after the content is posted the firm or its personnel

explicitly or implicitly endorses or approves the post.”18 Within the same document, they also

stated that “As a general matter, FINRA does not treat posts by customers or other third parties

as the firm’s communications with the public subject to Rule 2210.” Therefore, prior principal

approval, and content and filing requirements do not apply.

Finally, since most blogs, as well as forums, groups, bulletin boards, etc. allow administrators to

either block or approve a comment, it is not clear if that constitutes “approval” from FINRA’s

perspective. However, they did state that disclaimers on blogs and other venues would help

FINRA determine whether a firm has adopted or become entangled with a posting on sites that

are “monitored.”

Fidelity also asked that FINRA “clarify that third-party content such as banner or other

advertisements that may appear on a member firm’s social media page and that are not

controlled by the member firm, should not be the responsibility of the firm as long as there is no

adoption of entanglement.”19 This is a fair request and acknowledges that social media venues are

not under the control of any member firm.

17 FINRA Regulatory Notice 10 - 06, Social Media Web Sites: Guidance on Blogs and Social Networking Web Sites18 Ibid19 Fidelity Investment Response to FINRA Regulatory Notice 09-55


5. I N D U S T R Y P E R S P E C T I V E : S U P E R V I S I O N O F E M P L O Y E E S ’ S O C I A L M E D I A U S E

Fidelity addressed one of the key issues inherent in social media sites: The prevailing social media

sites are not under the control of the financial services companies. They stated that “This means

that in order to conduct any of the required FINRA functions for communications, including

review, approval, supervision and record keeping, firms are dependent upon the functionality of

these sites.”20 As a solution, they asked FINRA to:

Encourage firms to create technical solutions to aid in supervision and record keeping on

social media sites.

Provide guidance “regarding supervision of registered employees’ use of these sites.”21

The emphasis, by Fidelity, on the supervision of registered employees to the exclusion of

marketing or other non-registered personnel who might participate in firm-sponsored social

media interactions, creates an exposure for the firms. What the firm does through designated

employees, and how that is supervised, is a separate, but equally important, issue from

supervising the actions of registered reps.

In its January 2010 Regulatory Notice 10-06, FINRA reviewed existing supervisory procedures for

communications including electronic communications. In addition, they directly addressed what

kind of policies and procedure should be in place, and what restrictions should be put on

personnel who want to set up social media accounts.

“Firms must adopt policies and procedures reasonably designed to ensure that their

associated persons who participate in social media sites for business purposes are

appropriately supervised, have the necessary training and background to engage in such

activities, and do not present undue risks to investors.

“Firms must have a general policy prohibiting any associated person from engaging in

business communications in a social media site that is not subject to the firm’s

supervision.

“Firms must also require that only those associated persons who have received

appropriate training on the firm’s policies and procedures regarding interactive electronic

communications may engage in such communications.”22

20 Ibid21 Ibid22 FINRA Regulatory Notice 10-06, Social Media Web Sites: Guidance on Blogs and Social Networking Sites


6. S O C I A L M E D I A P E R S P E C T I V E : I N T E R A C T I V E E L E C T R O N I C C O M M U N I C A T I O N S

Although not commonly used by the general public, a phrase like “Interactive Electronic

Communications” is good enough to describe social media and other interactive venues. The

openness of the term should also make it possible to subsume the evolving methods of

communications offered both by the web and mobile devices under this category.

In addition, creating a distinct category of communications called Interactive Electronic

Communications and developing associated rules and regulations, will ultimately be more

effective than comparing certain interactive venues or situations to previously established

categories like Correspondence, Advertisements, etc. Even if the rules surrounding some

Interactive Electronic Communications are similar to other categories, at some point, there will

need to be clarification to those rules that apply only to this new category, creating a potential for

confusion.

However, a prerequisite to establishing effective rules and regulations in this complex category is

fully understanding all of the venues that fall under this category, the nature of the interactions

available, and what tools or features can affect the dissemination of information. Even within the

social media community, there are several ways that individuals have tried to categorize and

define various social media venues but, although the taxonomies vary, they have organized the

venues in a fairly similar manner. Also, although some of the communications addressed by FINRA

– such as chat rooms – are not specifically social media, they will be addressed in this section.

Finally, the true nature of social media needs to be understood. Traditional marketing and sales

communications is a non-interactive, one-to-many stream; there is only talking and no listening.

Social media is about having a conversation, and good conversations include active listening.

Because of this, not only does the level of interaction increase, but expectations about how

quickly a conversation turns around vary among different social media venues.


6 . 1 . A T A X O N O M Y O F S O C I A L M E D I A V E N U E S

SOCIAL MEDIA DESCRIPTION

Social networking sites Personal / professional networking sites (e.g. Facebook,

LinkedIn) that allow people to create their own networks.

Blogs

Video sites

Photo sites

Presentation sites

Event calendars

Posts (textual and multimedia) are usually initiated by an

organization or an individual, with comments provided by

the readers.

Event sites have form-based responses only.

Bulletin boards 23 All community members are able to initiate posts and

comment on posts.

Q & A Many can post questions and many or one (if sponsored

by an organization) can answer.

Micro-blogs Similar to blogs, but readers cannot comment directly.

They can forward the post of another micro-blogger to

their personal group.

Social bookmarking &

recommendations

Readers can publicly bookmark or recommend the posts

or articles of others, and add comments.

Related “Share This” functions also allow readers to add

comments and send links to their Facebook account or

“retweet” through Twitter.

Wikis Static information, but multiple people can contribute to

the content creation.

Chat rooms Real-time, many-to-many conversations that replicate

real-life exchanges.

Online seminars Online presentations, with the potential for real-time

voice and text exchanges.

Electronic

correspondence

Email, instant messaging, chat, SMS messages, and direct

messaging available within various social media venues.

Definitions and examples of various social media and related venues are available in Appendix A.

23 Bulletin Boards are functionally the same as Internet Forums, Message Boards, and Groups.

Copyright 2010, Catherine Sherwood | Real Communications

6 . 2 . C H A R A C T E R I S T I C S O F

FINRA has focused on two key c

classification of Interactive Electronic

Electronic Communications,” coined by Fidelity

1. Interactivity with third-par

2. Real-time exchanges

However, these criteria alone are not

venues and the types of activities that can occur

include “near-time” would more acc

separating out those venues that are truly

rules for these environments. Finally, there are some

such as SMS and social media site

Electronic Correspondence.


6 . 2 . 1 . I N T E R A C T I V I T Y W I T H

Within social media venues that allow for

between who is allowed to post and who is allowed to comment

Blogs typically have one or several authors

organization

herine Sherwood | Real Communications. All rights reserved.

H A R A C T E R I S T I C S O F I N T E R A C T I V E E L E C T R O N I C C O M M U N I C A T I O N S

cused on two key criteria when determining if a venue can be put under the

classification of Interactive Electronic Forums – their equivalent to the term

coined by Fidelity:

parties

However, these criteria alone are not complete enough to evaluate the full range of

venues and the types of activities that can occur: Amending the classification of

time” would more accurately reflect the realities of social media

separating out those venues that are truly virtual Public Appearances would help

. Finally, there are some newer forms of electronic communicatio

such as SMS and social media site-specific messaging that should be explicitly categorized under


N T E R A C T I V I T Y W I T H T H I R D P A R T I E S

social media venues that allow for “interactivity with third parties,” there are differences

between who is allowed to post and who is allowed to comment, that affects the locus of control

Blogs typically have one or several authors that initiate posts, who all belong to the same

13

O M M U N I C A T I O N S

hen determining if a venue can be put under the

their equivalent to the term “Interactive

e enough to evaluate the full range of social media

f “real-time” to

social media. In addition,

create realistic

forms of electronic communications

specific messaging that should be explicitly categorized under

there are differences

that affects the locus of control.

who all belong to the same


Readers can then comment on the blogs

comments directly

Video sites (YouTube), p

for comments

With bulletin boards, any member of the com

anyone in the community can post an entry and carry on the discussion

6 . 2 . 2 . R E A L - T I M E A N D N E A R

Truly real-time interactive exchanges do not always

interactivity with third parties. Many blogs approve comments in advance of actually posting

them, so there is a necessary delay between when the comment

actually posted. It would be useful to introduce the concept of “

with third parties that has a short delay could be included.

6 . 3 . V I R T U A L A P P E A R A N C E S

FINRA has stated that chat rooms and online seminars (webinars) are

analogous to Public Appearances, but

rooms and online seminar

they

has

should

statements create confusion

It seems that the characteristics of

exchange of information” are what

“interactive blogs,” but it is not

Interactive Electronic Forums category w

seminars are a many-to-many form of communication that

situations and, in that way, they

Appearances might be an apt category

time give-and-take among many individuals and, therefore

rules as Public Appearances.


Readers can then comment on the blogs, and the bloggers, in turn, can respond to those

photo sites (Flickr) and presentation sites (SlideShare) also allow

any member of the community can start a discussion thread

anyone in the community can post an entry and carry on the discussion

E A R - T I M E E X C H A N G E S

time interactive exchanges do not always occur, even in cases where there is a lot of

parties. Many blogs approve comments in advance of actually posting

so there is a necessary delay between when the comment has been written and

It would be useful to introduce the concept of “near-time,” so tha

parties that has a short delay could be included.

P P E A R A N C E S


analogous to Public Appearances, but FINRA has also labeled

rooms and online seminars as Interactive Electronic Forums, a term

they also use for what they call “interactive blogs.” However,

has not explicitly stated that interactive blogs and similar venues

should be considered as Public Appearances. These

atements create confusion.

It seems that the characteristics of “interactivity with a third-party” plus a “real-time or near

are what led FINRA to mix in chat rooms and online seminars with

but it is not clear what made them stop short of stating that the entire

Interactive Electronic Forums category was similar to a Public Appearance. Chat rooms and online

many form of communication that most closely mirrors

they differ from other online social venues. The concept of

might be an apt category in which to include these types of venues that offer a real

take among many individuals and, therefore, would logically be subject to the same

14

and the bloggers, in turn, can respond to those

resentation sites (SlideShare) also allow

munity can start a discussion thread, and

even in cases where there is a lot of

parties. Many blogs approve comments in advance of actually posting

written and when it is

” so that interactivity


also labeled chat

as Interactive Electronic Forums, a term

However, FINRA

not explicitly stated that interactive blogs and similar venues

These inconsistent

time or near-time

mix in chat rooms and online seminars with

clear what made them stop short of stating that the entire

hat rooms and online

closely mirrors similar real-life

The concept of Virtual

types of venues that offer a real-

gically be subject to the same


6 . 4 . E L E C T R O N I C C O M M U N I C A T I O N

FINRA has already ruled that

Correspondence

characterized by communications that are eith

to-many,

The following should be put in th

One-to-one chat, available on Facebook and other social media venues

Direct messaging capabilities, available

SMS (text) messages

24 FINRA Guide to the Internet for Registered Repscorrespondence if it is sent to i) a single customer (prospective or existing) ii) to an unlimited number of existing retail customers and/or less than 25 prospectperiod.”


O M M U N I C A T I O N

FINRA has already ruled that email and instant messages are

Correspondence24. This Electronic Correspondence

characterized by communications that are either one-

many, and are directed at a very defined recipient or recipient list

The following should be put in this same category:

available on Facebook and other social media venues

Direct messaging capabilities, available on sites such as Twitter, Facebook and LinkedIn

Guide to the Internet for Registered Reps: “An email or instant message is considered

if it is sent to i) a single customer (prospective or existing) ii) to an unlimited number of existing retail customers and/or less than 25 prospective retail customers (firm-wide) within a 30 day

15

email and instant messages are

Correspondence category is

-to-one or one-

and are directed at a very defined recipient or recipient list.

Twitter, Facebook and LinkedIn

An email or instant message is considered if it is sent to i) a single customer (prospective or existing) ii) to an unlimited number of

wide) within a 30 day


7. S O C I A L M E D I A P E R S P E C T I V E : R E S P O N S I B I L I T Y F O R T H I R D - P A R T Y C O N T E N T

Third-party, social media content typically consists of guest bloggers, those who contribute

photos and videos, and comments that respond to blog posts or other content (videos, photos,

presentations, etc.). It can also include content-sharing activities that are common in the social

web.

Guest bloggers are invited to post and their blogs are, typically, not edited by the host

blog. However, the common perception by most readers is that there is, at least, an

implicit approval of the content since the guest blogger was invited to contribute.

It is not uncommon for those who have a Facebook Fan Page or who host a website to

invite readers to post their own videos or pictures, as a way of engaging those people.

These postings are viewed as personal contributions and – in that way – are similar to

comments.

Comments from third parties are not viewed as representing the host site. It is commonly

understood that the process of “approval” is simply to remove offensive, inflammatory,

or potentially libelous content, and does not create an endorsement of that content in

the eyes of the reader.

FINRA has come close to providing clear guidance on third-party comments, but a more

straightforward statement of what is considered adoption, and the explicit inclusion of non-

textual forms of content would better reflect the world of social media. To imply that simple

monitoring and approving could constitute “adoption” seems to be stretching the definition of

that term.

FINRA’s suggestions that

“establishing appropriate usage guidelines for customers and other third parties that are

permitted to post on firm-sponsored Web sites;

“establishing processes for screening third-party content based on the expected usage

and frequency of third-party posts; and

“disclosing firm policies regarding its responsibility for third-party posts.’25

25 Ibid


are all good advice. However, the inclusion of the term “firm

with the term “Web sites,” would be more precise.

capability of including additional content on firm

also be encouraged to include usage guidelines and policies there.

Also, establishing processes for screening third

blogs should be extended to reviewing and responding to comments on firm

Fan Pages, YouTube Channels and any other firm

media sites. Although textual comments may not be able to be removed, the mem

explicitly state that they do not

inappropriate, they can usually remove it.

7 . 1 . C O N T E N T S H A R I N G

Content sharing is a key part of the “social” aspect of social media

and a good w

instances

shared, but

appear on the sites of the social bookmarking and recommendation

sites or,

“forwarded” content

Social bookmarking site

allow readers to share blogs, video and other content they like with others.

“Share This” icons allow readers to easily connect to Delicious, Digg and StumbleUpon,

and also to “retweet” content through their Twitter accounts

Wall, email it to friends, etc.

Addressing the category of “content sharing” would help provide direc

and services to member firms.


are all good advice. However, the inclusion of the term “firm-sponsored blogs,”

” would be more precise. In addition, sites such as Facebook have the

ity of including additional content on firm-sponsored Fan Pages, and member firms should

usage guidelines and policies there.J

Also, establishing processes for screening third-party content on firm-sponsored

should be extended to reviewing and responding to comments on firm-sponsored Facebook

Fan Pages, YouTube Channels and any other firm-sponsored content hosted on external social

media sites. Although textual comments may not be able to be removed, the mem

support a comment. If the content is non-textual, and offensive or

they can usually remove it.


and a good way to allow others to promote member firms. In many

instances, comments are added at the time that the content is

shared, but – unlike comments on blogs – these comments either


sites or, in the case of Twitter and Facebook, are appended to the

forwarded” content.

Social bookmarking sites (Delicious) and recommendation sites (Digg, StumbleUpon)


ow readers to easily connect to Delicious, Digg and StumbleUpon,

” content through their Twitter accounts, post it on their Facebook

Wall, email it to friends, etc.

of “content sharing” would help provide direction about these features

17

” in conjunction

In addition, sites such as Facebook have the

sponsored Fan Pages, and member firms should

sponsored websites and

sponsored Facebook

sponsored content hosted on external social

media sites. Although textual comments may not be able to be removed, the member firm can

and offensive or


ay to allow others to promote member firms. In many

comments are added at the time that the content is

these comments either


Twitter and Facebook, are appended to the

(Delicious) and recommendation sites (Digg, StumbleUpon)


ow readers to easily connect to Delicious, Digg and StumbleUpon,

, post it on their Facebook

tion about these features


8. S O C I A L M E D I A P E R S P E C T I V E : S U P E R V I S I O N O F E M P L O Y E E S ’ S O C I A L M E D I A

U S E

There are two, broad classes of individuals associated with member firms who might engage with

clients or prospects in the social web:

A select group of individuals who work within or under the auspices of a social media or

marketing department, and

registered reps that interface directly with clients.

FINRA has emphasized the need for having only those employees who are “appropriately

supervised, have the necessary training and background to engage in such activities, and do not

present undue risks to investors,”26 engage in social media. This provides good direction, but –

given the frequent changes to features of existing social media sites and the constant introduction

of new sites – training will need to happen not just on a scheduled basis; it will need to happen as

conditions change. Facebook and LinkedIn regularly create enhancements for their sites (not only

new features, but also changes to privacy settings) that are only made known on the day of their

release. In addition, the unpredictable nature of comments will not only need processes in terms

of what to approve and not approve (if a member firm is monitoring their blog), but also

escalation procedures to handle some of the comments on their site as well as comments

received on places like their Facebook Fan Page. These escalation procedures do not have to be at

the level of supervisory review, but are recommended for those difficult or hostile comments that

need a careful reply. Finally, training on good social media practices for member firms is

recommended to maintain good relationships with their customers and prospects.

Supervision is easiest with a small group of member firm employees who work within or under

the auspices of a social media or marketing department, however, supervision is clearly more

difficult with a large group of registered reps. Both training and surveillance could become hard to

manage and would, therefore, increase exposure. Having tighter restrictions on what registered

reps can do would help, but so would providing structured ways for them to engage in the social

web that support their desire to engage with clients and prospects in this new environment.

FINRA only touched on addressing regulations that relate directly to registered reps when it said

that profiles created by firm members on social networking sites that are open to the public are

26 FINRA Regulatory Notice 10 - 06, Social Media Web Sites: Guidance on Blogs and Social Networking Web Sites


considered Advertisements, and those that have restricted access are considered Sales

Literature.27 Developing some use-case scenarios 28 based on the use of social media by registered

reps, and providing guidance on what rules need to be employed to be in compliance, would help

the member firms. Some sample use case scenarios are provided below:

SOCIAL MEDIA VENUE SAMPLE USE-CASE SCENARIOS

LinkedIn Public profile and private profile should be reviewed by

member firm.

Guidance for what is included in public profile should

be provided.

Reps can use content provided by member firm to

populate these features and apps:

Blog

SlideShare or Google Docs presentations

Events calendar

LinkedIn polls

Reps should not provide any financial advice in Groups

nor answer any questions related to investment advice.

Blogs The member firm’s blog can be integrated into the

rep’s approved website.

If the firm’s blog monitors comments, then the rep’s

comments to his client’s comments could also be

reviewed.

The rep could also create his or her blog posts, if using

software run by the member firm. The member firm

would then approve the rep’s posts before they go live.

27 FINRA Podcast: Electronic Communications: Social Networking Websites28 A use-case scenario systematically breaks down user action so that product requirements can be built that meet their needs. It is usually used by software designers, but could also be a useful way to formulate regulatory guidance.


9. C O N C L U S I O N

In order to create an environment where member firms can comfortably create social media

strategies for their organizations, FINRA needs to take a top-down look at the full range of social

media and related venues, and provide guidance that addresses as many scenarios as possible. In

order to achieve this, creating a separate category of communications called “Interactive

Electronic Communications,” and creating rules associated specifically with this category, would

be a good first step. Even if the rules are very similar to those of existing categories, this new class

of media is complex enough that it should be treated separately.

Within this new category, all venues can be evaluated on key criteria – such as interactivity and

how close to real-time or near-time that interactivity occurs – and guidance on supervision,

polices and processes given that relates specifically to these venues. Employing the terms most

commonly used in the social media will also make sure that FINRA rules are easily understood.

Furthermore, since many of these social media venues are also available through mobile apps

that allow for most, if not all, of the same functionality, the delivery mechanism should not affect

the guidance given for these venues.

The term “Virtual Appearances” was introduced for those interactive electronic communications

that are both real-time and also have the interactive style found in real-world situations. In

addition, a recommendation was made to include SMS text messages, one-to-one chat, and some

new forms of direct messages under the sub-category of “Electronic Correspondence.”

Guidance on third-party content and what specifically constitutes “adoption” in cases where a

member firm is monitoring comments would be of value, as well as an acknowledgement that

third-party content could also include videos, images or other non-textual content. Also,

disclaimers and usage guidelines for readers should be extended to third-party sites such as

Facebook. The act of “Content Sharing” is also a form of engagement by readers and guidance

from FINRA on this functionality would let member firms know if they can encourage these

activities with the “Share This “ buttons found on may blogs and site.

Finally, the FINRA guidelines, to date, seem focused on social media activities that would emanate

from the member firms’ social media or marketing department, not from their registered reps.

This group is more difficult to train and supervise, so most member firms will not want them

setting up professional Facebook Fan Pages or their own Twitter accounts. However, there are

scenarios where registered reps can be involved in the social media, and where member firms can


aid them by supplying them with pre-created content. Developing some “use-case scenarios” of

how registered reps can engage in social media and providing guidance on those use-cases was

suggested as a way that FINRA could support member firms.


A P P E N D I X A : S U M M A R I E S O F S O C I A L M E D I A A N D R E L A T E D V E N U E S

This section includes one-page summaries of types of social media and related venues. Each

overview includes a description, examples of sites that fall under the described category, some

features (or characteristics) of these sites, and comments that address issues that would be of

interest to FINRA and member firms.

S U M M A R I E S O F S O C I A L M E D I A A N D R E L A T E D V E N U E S

Social networking sites

Facebook

LinkedIn

Blogs

Video sites

Photo sites

Presentation sites

Event calendar

Bulletin Boards

Q & A

Micro-blogs

Social bookmarking & recommendations

Wikis

Chat rooms

Online seminars

Electronic correspondence


PERSONAL SOCIAL NETWORKING SITES | FACEBOOK

Description: Facebook is the leading social networking site. Although people “friend” those in their personal and professional networks, the nature of the communications is primarily social. Companies also have Facebook accounts, but these accounts are called Fan Pages and people who run Fan Pages cannot make Friend requests. However, they can ask those who become their fans to invite their friends to also become fans. Facebook Groups were the precursors to Fan Pages, but are not typically used by corporations.

Other Examples: Orkut (owned by Google, popular in Brazil and India), Bebo (popular in Europe and Australia), MySpace (younger demographics than Facebook)

Fan Page Features Comments

Wall Company posts Fan posts (optional)

Discussion Photos Videos Notes Events Boxes (custom pages) Info Chat Private messages______________________________________Privacy features are available for normal Facebook pages (information can be public, viewed by friends of friends or just by friends) but Fan Pages typically are just public.

The Fan Page Wall is an interactive venue. Some companies only allow themselves to post and their “fans” to comment. Most, however, allow their fans to post as well –and other fans as well as the company can comment.

The Discussion area is similar to a bulletin board and is interactive

Photos, Videos and Notes all allow for comments and therefore are interactive

Events allow fans to RSVP and in that sense could be considered interactive

Boxes or custom pages are created by the company that set up the Fan Page and have the potential to be interactive

Info (typically a company descriptor) is static.


PROFESSIONAL SOCIAL NETWORKING SITES | LINKEDIN

Description: LinkedIn is primarily a business networking site, although they have added some more “social” features.

Other Examples: Plaxo (a site similar to LinkedIn that has not really been able to gain traction against its rival. Xing is similar to LinkedIn and very popular in Europe.

Features

Profile page basic elements: Picture Headline Summary Specialties Current & past positions Education Websites Interests Groups Honors and Awards Interests Contact SettingsAdditional profile page applications: Blog integration (TypePad & WordPress) SlideShare and Google Docs presentations

integration Events calendar LinkedIn Polls Tripit for sharing upcoming trips Reading List from Amazon Twitter account integrationInteractive LinkedIn capabilities: Groups AnswersOther: InMail private messages

LinkedIn members have the ability to set up a public profile that anyone can see, and another profile that is only for their connections. They can opt that no profile be shown or include any of the basic profile elements (with the exception of Contacts Setting which are never shown). This kind of flexibility makes it possible for member firms to limit what is in a public profile.

The additional profile page applications are less static than the profile page basic elements. However, some of these applications can be populated with pre-approved materials from the member firms –blog postings, SlideShare or Google Docs presentations, events calendar, and LinkedIn Polls – and can create a way for registered employees to connect in a more compelling fashion with their clients and prospects.

Groups are places where LinkedIn users can start discussions or comment on the discussion threads of others. Groups can also be founded by LinkedIn members.

Answers is an open area where LinkedIn members post questions and other members answer them.


BLOGS

Description: Blogs are a means of communications from one individual or a pre-set group of individuals to their readers, not a community. Readers of blogs can comment and the blog author and other readers will comment on various comments, but readers cannot initiate a blog themselves. It is not unusual for blogs to review comments before they are approved to appear online, and readers accept this, but expect a quick turnaround between when they post a comment and when it appears. It is also not uncommon for blogs to have policies about what they will accept and not accept as comments. It is also customary that readers be told that there will be a delay while their comment is approved.Much of the mainstream media is online and also allows readers to comment on articles, which is starting to blur the line between blogs and traditional content. However, with traditional online sites, the writers do not typically respond to the readers, comments and the tone of the article is more formal and less personal than blogs.

Examples: Vanguard Blog K

Characteristics Comments

New blogs tend to appear daily

Comments allowed by readers

Readers are often allowed to share or recommend blog posts

Bloggers can comment on comments

Approval of comments is accepted if there is a quick turnaround time

Commenting policies are not uncommon

Blogs are not real-time, but – at least – daily updates of new blogs and intraday turnaround for approving comments is expected.

A member company can create internal guidelines for topics that acceptable to be covered and, when necessary, a disclosure statement can be appended at the end of the blog post.

Pre-approving comments can protect against misleading or inappropriate comments from readers, especially if good guidelines are put in place for the reviewers.

Furthermore, guidelines for readers, in terms of what is acceptable or not acceptable in a comment, would decrease the frequency of inappropriate comments.

Disclosures about the member firm’s policies regarding its responsibility for comments would decrease liability of the member firm.

“Share This” buttons can be added to blogs, allowing readers to share a blog with friends or submit to a social bookmarking or recommendation site.


VIDEO SITES

Description:

YouTube is the most well-known and the largest video site. Users can post videos that they tag with keywords and viewers can submit comments, rate the videos, and share them. Some create YouTube Channels to which viewers can subscribe at no cost.

Facebook also allows members to upload videos on their home pages.

Examples: YouTubeL, Facebook


On YouTube viewers can comment on videos, rate them, and share them with others.

Those who submit videos can create channels that viewers subscribe to for free

Facebook videos will be disseminated to all fans

Most companies submit videos of TV ads to YouTube and Facebook. Although this would be easy for member firms to do since it is content that has already been approved, it is not that compelling for viewers.

Videos of short presentations or video blogs (vlogs) from interesting senior employees create more compelling content.

Comments posted on YouTube are not typically responded to by those who created the video.


PHOTO SITES

Description:

Sharing photos is a common activity on the social web. Siteslike Flickr are used by individuals to share their images with friends; they can also join in one of the thousands of Flickrgroups and share photos among like-minded individuals.

Facebook users often share photos that they “tag” with the names of their friends.

Examples: FlickrM, Facebook


Sharing photos is a simple process of posting images to a site

Tagging photos on a public site like Flickr will make them searchable by Google

Uploading photos on Facebook will make them viewable to your fans; if a fan is in the photo and that person’s name is in the tag, they will be notified and can remove the tag

Photos of public events and even some internal company events make a company more approachable.

It is not clear if photos with tags are considered “content” as defined under FINRA regulations.


PRESENTATION SITES

Description:

SlideShare is the leading site for sharing presentations and other documents with others The person or company that submits the presentation or document can ensure that the files are not able to be edited, so that the integrity of the presentation or document can be maintained. Viewers can share what they see, offer feedback, and “favorite” presentations.

LinkedIn and Facebook allow users to integrate SlideShare share presentations or documents into a user profile or personal home page, respectively.

Examples: SlideShare,N Google Docs


Presentation sites are primarily a way to share content with others

Sharing functions allowviewers to disseminate presentations to others

Files can be converted to PDF before uploading to ensure the integrity of the content

SlideShare and other presentation sites are a good way to repurpose presentations and documents, especially for those who could not attend an event

SlideShare and other presentation sites are also a good way to disseminate presentation materials for those who attended an event.

Conversion to PDF ensures the integrity of the information


EVENT CALENDARS

Description: Event calendars are often defined as “social media,” because many of the social and entertainment event sites have some kind of interactive features. Venues like Meetup facilitate the creation of real-life communities and the two most prominent social networking sites – Facebook and LinkedIn – have event features. Private-label event calendar software can also be added to a company website or blog using one of the many products available.Event calendars typically allow users to accept an invitation to an event and the more sophisticated private-label software allows for full registration.

Examples: Social / entertainment events (Upcoming, Eventful); local group meetings (Meetup), Facebook, and LinkedIn events to share with connections; event calendar software for company websites and blogs. O


Content controlled by event organizer

Users simply sign-up for events

Member firms could easily integrate event calendar software onto their websites and organize geographic area for in-person events or by topic for online events.

Facebook could be used to announce events to fans LinkedIn could be used by member firm employees to

promote firm-authorized events


BULLETIN BOARDS, INTERNET FORUMS, MESSAGE BOARDS, GROUPS

Description: Bulletin boards, internet forums, message boards, and groups are all essentially synonymous. They are online discussion sites that are sometimes referred to as “communities.” They are created by one individual or a set of individuals that are responsible for the conception of the site, the technical maintenance, and the creation of and enforcement of policies. Typically an explanation of the purpose of the community and a set of guidelines for community members is posted. Any member can start a discussion (often called a “thread”) to which other community members then respond.

Examples: Morningstar has 31 groups with a total of almost 1.9M posts.P LinkedIn has more than 467,000 English-speaking groups. Facebook has “groups” but they function more like fan pages.Their Discussion functionality is more analogous to this category. Yahoo and Google have 20,000+ groups on Investing, though many are small and not of high quality.Q


All community members can initiate posts

Goals and rules are normally set by the moderator

Content can be deleted Offending users can be

banned The vast majority of these

venues are near-time, not real-time

__________________________Note: Within this category there is no concept of a bulletin board that is not interactive. Interactivity is at the heart of the definition of this category

Initiating a response in a bulletin board run by another organization could be done if handled within specific guidelines by a designated employee of a member firm. For example: John Brown, Manager Corporate Marketing and

Communications, Vanguard, could identify himself in a response to a discussion thread on Morningstar’s Bogleheads Unite.

He could then provide a comment in a pre-approved format that basically says “I would like to respond to this post but my company requires me to communicate on our company blog. Please follow the link below to see my comment.”

Member firms could create private-labeled bulletin boards. However, even with content controls and guidelines, allowing users to initiate discussions would create more exposure and could result in “locking” entire threads of discussions, if the subject matter or responses became problematic.


Q & A

Description: Q & A (Question & Answer) sites are not as common as blogs or bulletin boards, but people often use them for specific questions. Answers can either come from generous readers on public or semi-public sites, but companies can include Q & A sections on sites that they host, or sponsor a section on a public Q & A site.

Examples: Yahoo AnswersR; Charles Schwab-sponsored section of Yahoo AnswersS; LinkedIn has an Answers section on their site where members can ask questions.


Individuals post questions that others answer

Answers can come from the general public or a specific company on a sponsored public site or a private hosted site.

For member firms, engaging in Q & A sites, whether public or private, disclaimers would be advisable.

There would need to be internal policies on what questions could be answered and which ones could not be answered and training on how to politely decline to answer some questions.


MICRO-BLOGS

Description: Micro-Blogs are 140-character communications sent out by individuals (or employees of a company) to a pre-defined group of recipients who have opted-in to receive the communication. Although it has some characteristics of opting-in to receive an email newsletter, communications are typically daily or intraday, and the recipient goes to the micro-blog site to view the information. There is no ability to comment publically in the same way as with a regular blog. With Twitter –the leading micro-blog –readers can send a private “direct message” to the Twitterer or they can “retweet” the posting to their group of followers. A direct message is like a short email communication and the Twitterer can answer back privately. Retweeting, however, can get a message that was intended for a closed audience out to a much larger, undefined audience. Twitter also allows for a “public reply” by including a follower’s Twitter account name in a tweet that all of his or her other followers can see.

Examples: TwitterT, TumblrU


140-character posts that typically happen daily or intraday

Original posts can go to a closed group of “followers.” but the ability for followers to “retweet” posts opens up communications to an uncontrolled audience.

Twitter supports direct messages – communications directly to and from followers.

Twitterers have the ability to drop a follower

There is no way to stop others from “retweeting,” so those that post on a micro-blog like Twitter need to assume that what they communicate will go to an audience beyond those they have accepted as their followers.

A frequent use of Twitter is to provide a brief phrase,followed by a shortened URL to another location such as a web site, blog, YouTube, etc. To provide safeguards,disclaimers and other safeguards can be put in place on the destination site.

Fidelity Investments has a Twitter account where they have done the following: Referrals back to their website:

“Which #Market #Sectors performed the best and why in Q4 2009? Take a look back with our Sector Snapshot (pdf) http://go.fidelity.com/Q409

Public replies to followers:

“@apurva212 Opening a Roth is a great step - for reasons to choose us, see http://go.fidelity.com/whyFidelity Let us know if you have ?s”

“@natodod Very interesting question, but sorry we aren’t able to provide investment guidance (including individual securities) on Twitter”


SOCIAL BOOKMARKING & RECOMMENDATION

Examples: Delicious, Digg, StumbleUpon

Characteristics

User tools to share blog posts, articles and videos with others


ECOMMENDATION SITES

Description: Delicious is the leading social bookmarking site. It allows users to organize and tag website links both for their own use and to share with others on the Delicious site.Digg and StumbleUpon are the leading sites where people can recommend blogs, article, videos, etc.

igg, StumbleUpon V

Comments

Providing a “Share This” button on a blog will help move the content to a wider audience

YouTube has a built-in share button for Facebook Twitter and StumbleUpon

33

Delicious is the leading social bookmarking site. It allows users to organize and tag website links both for their own use and to

Digg and StumbleUpon are the leading sites where people can

” button on a blog will help move the

hare button for Facebook Twitter and


WIKIS

Description: Wikis are websites where people can collaborate by submittingand editing information via web browser. The largest and most famous wiki is Wikipedia, an online encyclopedia. Companies also create internal wikis as a way to share knowledge internally, and some companies create public wikis as well. For example, some high tech companies create a wiki to provide technical support information to their customers.

Examples: WikipediaW, corporate wikisX


Collaboratively-created website typically used as a knowledge base

Access controls make it possible to limit who can generate content

Access controls make it possible to limit who can see content

Content is typically “evergreen”, meaning that it is not timely information , but more resource material

Wikis could be a good way for member firms to organize educational resource information and make it accessible to clients or prospective clients.

Wikis could also be used by a member firm to organize product information, procedures, policies, etc. for registered reps.

All member firms should check out Wikipedia to see if there is an entry about their companyY and make corrections to any misinformation. While there, they should also check out the Discussion tab and the History tab (to see who created the entries)

If a member firm does not have an entry that has been submitted by a third party, they might consider creating their own entry. However, Wikipedia expects that people maintain neutrality with company and product entries, and not treat them as sales literature.


CHAT ROOMS

Description: Chat rooms are virtual areas where people can communicate with each other in real time. Most chat rooms are text-based but some include images such as avatars. They are typically unmonitored and used primarily for social exchanges or – at times – for games.

Examples: Sites such as YahooZ and AOL’s AIMAA have multiple chat rooms available based on socializing or similar interests.


Real-time discussions, usually using quick phrases and Internet slang

Unmoderated Identity of participants is

usually not known

Since there is no match between most of the people who go into chat rooms (and the discussions they want to have),and the communications goals of member firms, this is not a useful place to be in the social media.

Member firms could create chat rooms for their clients, but the real-time nature of chat rooms and the lack of control make it problematic. Online seminars are a better forum to have a real-time conversation with a group of clients.


ONLINE SEMINARS, WEBINARS

Description: Online seminars are frequently referred to as “webinars.” They are not technically social media but a virtual meetings hostedby an individual or a company. Typically, the host has a prepared presentation, but is also able to open up the webinar for discussion. All participants are viewing the content residing on the host’s computer, and are listening in via telephone or an Internet audio connection. Participants can raise their hands to get permission to speak and the host can see the names of these participants. The major suppliers of online seminar software also provide the ability to create an audio recording of the proceedings.

Examples: GotoMeeting, WebEx


Real-time Virtual “public appearance” Record keeping is aided by

making an audio transcript of what was said by the presenter and the participants.

Similar to a public appearance, but with a virtual audience. Audio recording of the presenter and participants can be

done with built-in features of the software suppliers.


ELECTRONIC CORRESPONDENCE

Description: “Electronic” Correspondence encompasses new forms of correspondence that closely mimic traditional correspondence. It already includes email and instant messaging (IM), but SMS text, one-to-one chat and the various “direct message” options available on social media sites have the same characteristics as email and instant messaging.

Examples: SMS text is available from virtually every cell phone service provider; chat functions are available on Facebook and could be a form of communication between a service agent and a customer; Twitter has Direct Message (DM), LinkedIn has InMail and Facebook has a Message capability.


Mimics email correspondence or text-based, one-one-one conversations

Identifying those types of electronic correspondence that are sometimes embedded in social media sites, and categorizing them under Electronic Correspondence, will help member firms create good social media policies


A B O U T T H E A U T H O R

Catherine Sherwood is a consultant specializing in

insights and expertise in social media are backed

senior executive level. She is a strong proponent of using social media to transform how

businesses approach marketing, and

growing and evolving world. She

executive experience to help her clients

delivery systems, and grow their brands.

Catherine has worked in the financial se

EMPLOYEE

Pinnacor (sold to CBS MarketWatch)

Inlumen (formerly NewsAlert)

Thomson Financial

IDD Information Services

Knight-Ridder Financial


Catherine Sherwood | Real CommunicationsPhone: 505-292-4433Cell: 505-550-6106Email: [email protected]/blog: http://CatherineSherwood.com

For links to all social media connections: www.XeeSM.com/CatherineSherwood

Catherine Sherwood is a consultant specializing in social media and strategic marketing

ial media are backed by 20+ years of business experience at the

She is a strong proponent of using social media to transform how

businesses approach marketing, and is committed to helping her clients navigate this rapidly

She integrates the new social media paradigm with her solid

executive experience to help her clients acquire and retain customers, improve their support and

delivery systems, and grow their brands.

financial services industry for most of her career. Companies include:

CBS MarketWatch)

Inlumen (formerly NewsAlert)

CONSULTANT

Equity Strategies Group

(division of Lincoln Financial)

Stockgroup Media

Terra Nova Financial

SmartMoney.com

38

strategic marketing. Her

20+ years of business experience at the

She is a strong proponent of using social media to transform how

committed to helping her clients navigate this rapidly-

integrates the new social media paradigm with her solid

, improve their support and

for most of her career. Companies include:

Equity Strategies Group

Lincoln Financial)


E N D N O T E S

A FINRA Regulatory Notice No. 09-55: Communications with the Public: FINRA Requests Comments on Proposed New Rules Governing Communications with the Public http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p120005.pdf

B ICI Response to FINRA Regulatory Notice 09-55 www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/noticecomments/p120410.pdf

C FSI Response to FINRA Regulatory Notice 09-55www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/noticecomments/p120432.pdf

D Fidelity Investment Response to FINRA Regulatory Notice 09-55www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/noticecomments/p120426.pdf

E NASD Ask the Analyst – Electronic Communicationswww.finra.org/Industry/Regulation/Guidance/RCA/p015326

F FINRA Guide to the Internet for Registered Reps www.finra.org/Industry/Issues/Advertising/p006118

G Podcasts – Electronic Communications: Web Sites; Electronic Communications: Blog, Bulletin Boards and Chat Rooms; Electronic Communications: Social Networking Websiteswww.finra.org/Industry/Issues/Advertising/p006118

H Market Letters, Regulatory Notice 09-10http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p117804.pdf

I SEC Interpretation, Release Nos. 34-58288 www.sec.gov/rules/interp/2007/34-58288fr.pdf

J Vanguard’s Commenting Guidelines and Disclaimer displayed on their Facebook Fan Page:Commenting guidelines: We love reading your feedback on our videos, status updates, and other posts. Since we're still getting adjusted to this new medium, Vanguard can't respond to your comments at this time. Also, we reserve the right to delete comments that we, in our sole discretion, believe may be unlawful, abusive, offensive, or inappropriate. See more. Finally, please don’t use Facebook to request transactions or submit questions about your investments or customer-service issues. Instead, contact Vanguard directly.

Disclaimer: Vanguard is independent of this site. Any opinions expressed by our Facebook fans are those of the persons submitting the comments, and don't necessarily represent the views of Vanguard or its management. Vanguard is not responsible for and does not endorse any advertisements that Facebook.com may place on this page. Vanguard is not responsible for and does not endorse the content, advertising, products, advice, opinions, recommendations or other materials on or available from other pages on Facebook.com or any website owned or operated by a third party. Vanguard is not responsible for the terms of use or privacy or security policies at this site or other third party sites that may be linked to by this page or other Facebook.com pages. You will use any third party sites and materials at your own risk. Vanguard Marketing Corporation is the distributor of the Vanguard Funds.

K Vanguard Blog www.vanguardblog.comVanguard has six senior employees that are contributors to their blog. Although they initially did not allow comments, they do now. They have a very clear commenting policy for their readers http://www.vanguardblog.com/about#comments.They do not directly comment on the comments of their


readers. However, some cases where a blog has generated a lot of comments, they create a new blog that readers. However, in some cases, where a blog has generated a lot of comments, they have created a new blog entry that addresses the issues raised by readers. For example: http://www.vanguardblog.com/2010.02.02/another-take-on-a-tale-of-two-investors.html#more-293

L YouTubeYou Tube served up more than 12 Billion views of videos in November 2009 alone. http://www.strangelove.com/blog/2010/01/youtube-growth-chart/

M Photo sharing sites: www.flickr.com is owned by Yahoo.

N Presentation sites:SlideShare can be found at www.slideshare.net

O Event Calendars:Social / entertainment calendars (http://upcoming.yahoo.com;http://eventful.com);community-based events (www.meetup.com); and dozens of private label software that can be integrated

on a website or blog (e.g. Trumba)

P Morningstar’s discussion groups: http://socialize.morningstar.com/NewSocialize/forums/default.aspx

Q Yahoo Groups: http://groups.yahoo.com.Google Groups: Http://groups.google.com/grphp?hl=en&tab=wg

R Yahoo Answers: http://answers.yahoo.com

S Charles Schwab-sponsored section of Yahoo Answers:http://answers.yahoo.com/my/profile?show=YEmi3VFsaaIncludes the following disclaimer:The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment or tax advice. Any investments and strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

T Twitter www.twitter.comThe leading micro-blogging site. Although they do not release the number of accounts, in December 2009, Quantcast estimated the number of U.S. Twitter accounts at around 23 – 24 million. (www.quantcast.com/twitter.com)

U Tumblr www.tumblr.comSecondary micro-blogging site. Smaller than Twitter, and features easy integration of video, images, and audio.

V Social bookmarking and recommendation sites:http://delicious.com; www.stumbleupon.com; http://digg.com

W WikipediaThe largest Wiki by far. It is a user-contributed “encyclopedia” with more than 3.1 million English-language entries. (www.wikipedia.org)

X Wiki software


Wiki software is available from several software companies: Wikipedia has a chart that compares multiple wiki software companies. (http://en.wikipedia.org/wiki/Comparison_of_wiki_software)

Y Wikipedia has an entry on Fidelity Investments created by a third party.http://en.wikipedia.org/wiki/Fidelity_Investments

Z Yahoo Chat Rooms: http://chat.yahoo.com/

AA AIM Chat Rooms: http://chat.aim.com/

Financial services social media

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