The Financial Industry Regulatory Authority (FINRA) has recognized how important social media and personal devices such as smartphones have become to the financial industry and has now provided guidance for business communications.

Regulatory Notice 11-39, Social Media Websites and the Use of Personal Devices for Business Communications, is FINRA’s attempt to clarify how firms can use social media. The regulations take into account the interactive nature of social media, and specifically differentiate between “unscripted” interactions between users on social media sites and “static” posting.

Significantly, the onus is put on companies to develop their own policies and procedures for social media use. For example, FINRA says that in terms of supervision: “A firm must conduct appropriate training and education concerning its policies, including those relating to social media. Firms must follow up on ‘red flags’ that may indicate that an associated person is not complying with firm policies.”