Consider risks when posting third-party content

Keywords Social mediaCompanies Investment Industry Regulatory Organization of Canada Advisors cautioned on using personal social media pages Advisors should use extreme caution when posting third-party content on social media sites, says Joe Yassi, vice-president, business conduct compliance, at Investment Industry Regulatory Organization of Canada. “When providing third-party content, there are a number of issues that need to be considered. [For instance,] does a hyperlink to a third-party website create exposure? And has there been pre-approval of the third party content?” says Yassi at the recent Investment Industry Association of Canada (IIAC) Social Media Conference in Toronto. Related news Social media: Building equity in the ‘influence economy’ Clare O’Hara In a limited number of examinations of member dealers, IIROC found some third party content appeared to be part of the products or services offered by a dealer member when in fact it was not. Posting a link to third party content could create a number of risks for both the firm and its registrants including exposure, reputation, litigation or regulatory risks, says Yassi. IIROC recommends that firms that allow social media activity pre-approve all third-party content before it is posted online. Yassi suggests that as part of the pre-approval process, firms should conduct the proper due diligence on both the content and the entity providing the content. “The [third-party] link may create the impression that the firm or its representatives are endorsing the third party content or services,” says Yassi. “There may be copyright and other issues to consider.” Advisors, who rely on third-party content as part of their social media regime, may consider posting a disclaimer to alert clients that the provided content is not endorsed by either the advisor or the firm. The disclaimer should be specific to each link posted; Yassi says providing an overall disclaimer on a Facebook or LinkedIn profile may not be sufficient in a review. “A boilerplate disclaimer intended to cover all facts situations is very unlikely to be an adequate control given the many possible fact situations,” says Yassi. Other IIROC review findings include firms not conducting periodic site checks for undisclosed or unapproved postings, not having policy and procedures specific to social media, employees use of exaggerated or inaccurate titles and employees not maintaining current information. In addition, social media actions such as re-tweeting or “thumbs up” could be considered an endorsement or a recommendation in a review, and firms are expected to include these actions in their policies and procedures documents for advisors. “Firms have an overarching obligation to supervise the activities of its registrants,” says Yassi. “Therefore firms must have policies and procedures dealing with the use of social media. A finding that a firm does not have policies and procedures would be a significant concern.” If the firm’s policy is to prohibit social media, IIROC suggests the firm have policies and procedures that outline detail on how the firm is monitoring that prohibition. Share this article and your comments with peers on social media Facebook LinkedIn Twitter read more