TORONTO (Reuters) - Canadian regulators are proposing new guidelines to govern how investment dealers advertise and communicate with clients on popular social media such as Facebook, Twitter and blogs.
The Investment Industry Regulatory Organization of Canada (IIROC) set out the proposed guidelines in a draft notice this week, asking dealers to submit comments within 60 days to help mold the new rules.
"In response to the increasing use of social media websites, such as Facebook, Twitter and blogs, IIROC staff has updated the content of the existing guidance notice ... to address the unique compliance and supervisory issues when using social media websites to communicate with clients and the public for business purposes," IIROC said.
IIROC is a self-regulatory organization that oversees all investment dealers and trading activity on debt and equity marketplaces in Canada.
The six-page draft rules notice updates guidelines on advertising, sales literature and general correspondence that were last modified in April 2004, and refer to issues ranging from record-keeping to the secondary impact of communications with clients.
The guidelines also touch on third-party communications, and point at the potential pitfalls of "re-tweeting" a client's post or providing a thumbs-up, both of which might be considered an endorsement.
It said static content, like a profile, background or wall information, is usually considered an advertisement, and must be pre-approved.
"An interactive electronic forum such as Facebook and Twitter, on the other hand, includes real time discussions and although it does not require prior approval, must be supervised to ensure compliance with IIROC Dealer Member Rules and securities legislation," the regulator said.
To read the draft of the guidance note, see: here
Reporting by John McCrank and Pav Jordan; editing by Peter Galloway