The FCA has published Guidance Consultation 14/6: Social media and customer communications: the FCA’s supervisory approach to financial promotions in social media (GC14/6).
In GC14/6, the FCA seeks to clarify its approach to the supervision of financial promotions in social media.
In GC14/6, two key messages from the FCA are:
- communications through social media can reach a wide audience very rapidly, so firms should take account of that in their decision to promote through social media, and the nature of their promotions. Firms should ensure that their original communication would remain fair, clear and not misleading, even if it ends up in front of a non-intended recipient; and
- the requirements to be fair and not misleading imply balance in how financial products and services are promoted, so that consumers have an appreciation not only of the potential benefits but also of any relevant risks. Firms should consider the appropriateness of character-limited media as a means of promoting complex features of financial products and services. It may be possible to signpost a product or service with a link to more comprehensive information provided that the promotion remains compliant in itself. Alternatively, it may be more appropriate to use ‘image advertising’.
GC14/6 also sets out further detail on specific areas that firms need to consider. This includes risk warnings and other required statements. The FCA reminds firms that there are requirements to include risk warnings or other statements in promotions for certain products/services. These rules are media-neutral and therefore apply to social media as they would with any other medium. This may pose particular challenges for the use of character-limited social media. One possible solution to this problem is to insert images, such as info graphics into tweets, which allows relatively unrestricted information to be conveyed. However, where the financial promotion triggers a risk warning or other information required by the FCA’s rules, this cannot appear solely in the image.
Clive Adamson (Director of Supervision, FCA) states:
“Our overall approach is that financial promotions, whether on social media or traditional media, should be fair, clear and not misleading. We have had extensive industry engagement on this issue and we believe our guidance is a sensible approach that doesn’t affect industry’s ability to innovate using new forms of media. We recognise social media are constantly evolving. We therefore, welcome feedback to today’s consultation and look forward to continuing the discussion with industry.”
The deadline for responding to GC14/6 is 6 November 2014.
View FCA sets out its approach to financial promotions in social media, 6 August 2014