FINRA Series 6 Investment Company and Variable Contracts Products Representative ExaminationProfessional Conduct and Ethical ConsiderationsEasy
A registered representative (RR) is developing a new social media page to engage with clients and prospects. Which of the following statements is true regarding the content posted on this page?
- AThe RR is solely responsible for ensuring the accuracy and compliance of all content, regardless of type.
- BInteractive content, such as comments and replies, does not require principal pre-approval.
- COnly content that directly solicits business requires pre-approval from a principal.
- DAll static content must be approved by a principal prior to use.
Show answer & explanationAnswer & explanation
Correct answer: D. All static content must be approved by a principal prior to use.
FINRA rules require that all static, firm-generated content on social media, which is typically considered 'retail communication,' must be approved by a principal prior to its first use. This ensures compliance with advertising rules.
Why the other options are wrong
- A. While the RR has a responsibility, the firm and its principals bear ultimate responsibility for ensuring all communications comply with regulations, including social media.
- B. Interactive content (e.g., real-time comments, replies) can be supervised for compliance after it's posted, but static content always needs pre-approval.
- C. This is incorrect. All static content, not just solicitations, requires pre-approval to ensure it meets regulatory standards for fairness and accuracy.
Social Media Pre-Approval (FINRA)
FINRA rules require that certain types of social media content used by registered representatives be approved by a principal prior to its first use.
- Static content (retail communication) generally requires principal pre-approval.
- Interactive content (correspondence) may be subject to review but not necessarily pre-approval.
- All content must be retained and supervised by the firm.
Memory trick: Static posts need a principal's 'Go'!