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Check emails as well as social media comply with FSA rules

Advisers are being warned to ensure their emails to clients comply with the FSA’s financial promotion rules.

In an industry update in June, the FSA told firms that its financial promotion rules extended to the use of new media such as Twitter, Facebook, online forums, blogs and mobile applications.

The regulator said that rules generally apply in a media-neutral way focusing on the content of the promotion rather than the medium used. It added that rules cover all communications by regulated firms to clients, not just promotional communications.

The FSA has now clarified that this also extends to email communications.

An FSA spokeswoman says: “The rules around financial promotions, which state that material must be fair, clear and not misleading, must apply to social media. That would also apply to email. The principle is that advisers must have fair, clear and not misleading communications with their clients, whatever tools they are using.”

US securities regulator the Financial Industry Regulatory Authority fined MetLife Securities’ three US affiliates £751,000 last November for failing to set up an adequate supervisory system for monitoring brokers’ emails with the public.

Last month, the FSA entered into a memorandum of understanding with Finra over greater information exchange on firms and individuals.

Finance & Technology Research Centre managing director Ian McKenna says the FSA and Finra are essentially comparing notes with each other on different regulatory strategies.

He says: “Finra and the FSA are working increasingly closely, so Finra’s fine against MetLife Securities should be taken as a clear warning that any organisation that does not have its email policies properly in place is asking for trouble.”


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