By Ali Qassim
March 18 — The U.K.’s Financial Conduct Authority March 13 published its final guidance on the use of social media to help financial firms comply with the regulator's rules for financial promotions.
“Financial promotions, whether on social media or traditional media, must give customers the right information and meet our requirements to be fair, clear and not misleading,” Tracey McDermott, FCA director of supervisions and authorizations, said in announcing the guidance.
The final recommendations incorporated feedback received in response to draft guidance published in August.
The final guidance also clarifies some areas U.K. marketers found confusing in earlier proposals, such as the use of “#Ad” on Twitter; images; retweeting; or recipients sharing or forwarding communications and inserting images, the FCA said.
In a March 16 response to the guidance, Richard Lindsay, director of legal and public affairs at the Institute of Practitioners in Advertising, said the guidance “gives useful examples of compliant/non-compliant communications, including on platforms such as Twitter and Instagram.”
“It also contains helpful pointers to other sources of information to assist advertisers in ensuring their promotions are compliant in a complex sector,” he said.
In the biggest reversal from the draft's proposals, the FCA deleted the reference to #ad in the final guidance, arguing that the use of hashtags was “not an appropriate way” to identify promotional content. The FCA had originally said one way of identifying financial promotions on character-limited media such as Twitter was to use the hashtag #ad.
Explaining its revision, the FCA said that paid-for advertising on several social media platforms already explain that the content is promotional—for example, Twitter includes statements such as “promoted by”—and, consequently, the additional use of #ad wouldn't be required to identify the communication as promotional.
The FCA added that when consumers click on a hashtag, they are led to a separate page where all communications using that hashtag are displayed. “There is potential for consumer confusion here as the majority of the information will be irrelevant to the initial communication, although this may not be immediately obvious to the user,” the FCA said.
Responding to feedback in the consultation calling for clarification on where responsibility lies when communications are retweeted or shared, the FCA said that in cases where a recipient forwards a firm's communication, that recipient and not the firm is held responsible for any noncompliance with the rules.
However, the FCA said in cases where the originating firm breached the FCA's promotional rules in its initial communication, then that company, and not the retweeter, is responsible for any violations.
The FCA also said that firms could insert images when required to include risk warnings or other mandatory statements in promotions for certain products and services.
But the FCA warned firms to ensure that the warning isn't solely limited to an image. It said Twitter users may switch off images, making the warning appear as a link, which would be in breach of FCA rules.
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