FINRA Provides Update on 'Finfluencers' Crackdown
The broker-dealer self-regulator said that it’s looking for communications via any website or application that enables users to create and share content or participate in social networking, including TikTok, Facebook, Instagram, YouTube, Twitter, Stocktwits, Reddit and Twitch.
FINRA also wants firms to weigh in on their written and supervisory compliance with the Securities and Exchange Commission’s Regulation S-P, Privacy of Consumer Financial Information and Safeguarding Personal Information.
On Tuesday, FINRA said that the update summarizes selected practices FINRA has observed firms implement “to this point in the sweep.”
For instance, when it comes to maintaining written supervisory procedures (WSPs) focusing on social media influencer and referral programs, firms have:
Differentiated between social media influencer and referral programs, including considering additional controls for social media influencers with a relatively large social media presence, as well as any additional requirements for programs managed by member firms, affiliates or marketing agencies;
Updated their WSPs on a regular basis and in response to program developments, regulatory changes or industry trends; and
Addressed program participants’ compensation.
FINRA said that it may provide additional information about its review at a later date.
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