FINRA Series 6 Investment Company and Variable Contracts Products Representative ExaminationProfessional Conduct and Ethical ConsiderationsMedium
A registered representative is reviewing their firm's policies on social media use. The policy states that all professional communications on social media must be pre-approved by a principal. The representative frequently posts market commentary on their personal LinkedIn profile. Which action is REQUIRED for the representative to remain compliant?
- AOnly post general market trends and avoid specific investment recommendations.
- BLimit social media activity to non-professional content only.
- CEnsure their LinkedIn profile clearly states that their views are personal and not those of their firm.
- DObtain pre-approval from a principal for each market commentary post.
Show answer & explanationAnswer & explanation
Correct answer: D. Obtain pre-approval from a principal for each market commentary post.
The firm's policy explicitly requires pre-approval for 'all professional communications' on social media. Market commentary, even on a personal profile, is considered professional communication and thus requires principal pre-approval.
Why the other options are wrong
- A. This might reduce risk, but it doesn't satisfy the firm's pre-approval requirement for professional content.
- B. This is an option, but not necessarily 'required' if the representative wishes to continue posting professional content.
- C. While good practice, a disclaimer does not negate the need for pre-approval as per firm policy.
Social Media Pre-Approval (FINRA)
Many FINRA member firms require pre-approval by a principal for professional communications posted by registered representatives on social media platforms, even personal ones.
- Applies to content deemed 'professional communication'.
- Aims to ensure compliance with advertising and communication rules.
- Firm policies can be more stringent than FINRA's general rules.
Memory trick: Social posts for work: get a principal's nod, or it's a fraud.