Financial Industry Regulatory Authority Chairman and CEO Richard Ketchum is the first to acknowledge that ground rules for how financial advisors and brokers can use social media such as Facebook, Twitter and LinkedIn are evolving, and that Finra needs to examine several still unresolved regulatory issues before clear rules are in place.
"I know you are all struggling with social media, and how to keep pace with disclosure and investor protection issues," said Ketchum, speaking at the at IRI Government, Legal and Regulatory Conference in Washington, D.C on Tuesday.
Ketchum told conference attendees that Finra two years ago set up its Social Network Task Force--composed of Finra staff and industry representatives--to discuss how firms and their registered representatives could use social media sites for legitimate business purposes in a manner that ensures investor protection.
"The task force continues to examine some of the more recent questions and concerns involving social media," Ketchum said.
For example, he noted, firms have had questions about the best way to supervise "business card" information that is posted on a social media site, particularly when there is the potential for employees to communicate about securities-related business through these sites.
Ketchum said brokers and advisor firms also want to know what's the most effective method to supervise employees' use of personal devices such as smart phones, BlackBerries and iPads that can access their company's systems.
"The task force has discussed some broader Internet issues that extend beyond social media sites, such as the use of hyperlinks from firm websites to third-party sites, and the use of third-party data on firm websites," Ketchum said.
Ketchum added that Finra aims to issue guidance on these issue later this year.