Hearsay Social » IT and Compliance Be social. Corporate to local. 2013-05-24T20:01:07Z http://hearsaysocial.com/feed/atom/ WordPress hearsay-social-compliancehttp://feedburner.google.com Clara Shih http://www.hearsaycorp.com <![CDATA[How to balance social media risks and rewards]]> http://hearsaysocial.com/?p=10111 2013-05-20T21:49:12Z 2013-05-16T21:46:40Z Recently I had the pleasure of joining colleagues at Marsh and LinkedIn to speak on a timely webcast, “The New Reality of Risk: Balancing Social Media Risks and Rewards.” Watch a full replay of the webcast here.

With more and more of your employees using social media and social networking for sales, marketing, and other business activities, organizations must take conscious efforts to understand, evaluate, and mitigate the risks involved. In this webcast, we took a close look at what hurdles and benefits come from social sales and marketing.

Webcast participants included Mike Derezin (@mikedfresh), Global Head of Sales, Sales Solutions, LinkedIn; Adeola Adele, SVP, US Employment Practices Liability Practice Leader, Marsh; Robert Parisi, Managing Director, Marsh FINPRO; and myself. Thank you also to Regina Spratt, Managing Director, Marsh’s US Sales Leader for moderating.

Particularly inspiring were Mike’s introductory statements on the ubiquity of social media. Today, 91% of adults in the U.S. actively use social media. In the 18-24 year old range, that figure jumps to 98%. Around the world, over a billion people use Facebook to connect with family and friends, Twitter to follow specific interests, and LinkedIn to connect with colleagues and other professionals.

As social media becomes more and more valuable to both businesses and their customers, it’s clear today that governance is essential.

In developing social media governance, organizations must always start by setting clear goals and identifying exactly what risks are involved. At this stage, it is critical to receive input and buy-in across the C-suite to ensure that all the business needs are being met, from sales to marketing to compliance. Indeed, social media success requires cross-functional collaboration: you may view the organization departmentally, but the customer views you as a single unit.

Once goals have been established, next steps are to set a policy, train the organization, and enable social media activity. As a final and ongoing step, the organization must have a team in place to monitor and enforce all the guidelines they’ve established.

Ultimately, the greatest risk in all this is not being on social media at all. You must serve the customer where and when they prefer, especially if that means over mobile or on social media.

To see slides and hear the whole conversation, go the webcast.

]]> 0 Meagan Herfkens <![CDATA[FINRA compliance panel recap from LinkedIn’s Global Financial Services Summit]]> http://hearsaysocial.com/?p=9876 2013-05-20T22:58:38Z 2013-05-03T05:05:27Z

This week, Hearsay Social had the honor of running the compliance track at  LinkedIn’s Global Financial Services Summit in New York.

We were delighted to host Joe Price, Head of FINRA’s Social Media Task Force, along with Lisa Shalett, CMO of Goldman Sachs; Iain Duke-Richardet, Head of Technology Compliance at Royal Bank of Canada; Sean Shore, Business Conduct and Compliance Manager at National Bank Financial Wealth Management; and our very own Yasmin Zarabi, Compliance Officer at Hearsay Social for an interesting dialogue about the role and future of social media regulation in the industry.

LEFT TO RIGHT: Lisa Shalett, Iain Duke-Richardet, Sean Shore, Joe Price, and Yasmin Zarabi.

Yasmin kicked off the day with a discussion on how organizations must balance the regulatory risk of social media with the clear opportunity for social to support the financial organization. Joe Price then provided an overview about FINRA’s social media regulation.  As a part of this, he clarified the difference between ‘static’ and ‘dynamic’ communication, reiterating that profile pages are static and status updates, tweets, and photos are considered dynamic.

Lisa is a huge advocate for social networking. She is head of brand and digital now, but her prior role as head of compliance and legal at Goldman Sachs gives her great context and credibility to speak on these topics. “There is a huge opportunity with social media,” she said, “if you become an expert now, you have the first mover advantage.”  Lisa continued to stress the opportunity for compliance professionals that embrace social media. She compared the opportunity to email, saying, “it was not long ago that email was innovation.”  And, Lisa suggested that because of the high-visibility of social media, compliance professionals willing to learn social would immediately get themselves a spot at the leadership table. Moreover, Lisa challenged the audience– what is the risk of NOT doing social media?

While the panelists had interesting perspectives and debated many issues, there was mutual agreement around the enormous business opportunity on social media. As long as financial firms and their employees adopt the appropriate policies, procedures, and technology, social media can be incredibly valuable for organizations to stay relevant and drive business in this new era.

See below for more photos and tweets from the event:

LEFT TO RIGHT: Yasmin Zarabi, Joe Price, Sean Shore, Iain Duke-Richardet, and Lisa Shalett.

See more from the event:

]]> 0 Ronny Kerr <![CDATA[BMO, Scotiabank, Sun Life Financial LinkedIn, and Hearsay Social to kick off LIMRA LOMA Canada Conference with Innovation Summit]]> http://hearsaysocial.com/?p=9638 2013-05-03T13:39:24Z 2013-05-02T16:02:38Z Today we are thrilled to announce that on Tuesday, May 7, ahead of the LIMRA LOMA Canada Annual Conference in Toronto, Hearsay Social will be hosting an Innovation Summit for financial industry leaders to discuss the future of financial services and relationship management in the social era.

This will be the second Hearsay Social Innovation Summit, you can see a recap of the inaugural event here:

With a keynote from Kevin G. Lynch, Vice-Chair of BMO Financial Group, former Clerk of the Privy Council, executives from top insurance and financial services organizations (including BMO Financial Group, Scotiabank, and Sun Life Financial) will join Hearsay Social and LinkedIn at the Fairmont Royal York to to talk social sales and marketing.

The disruptive forces of social media are changing the way financial services and insurance companies do business. With the growing availability of social sales productivity tools, these organizations cannot afford to be behind the curve; by participating in this event, participants are committing to exploring the cutting edge of technology.

Speakers include:

  • Kevin G. Lynch, Vice-Chair of BMO Financial Group, former Clerk of the Privy Council
  • Paul Regan, Head of Digital, Scotiabank
  • Michelle Smyth, Director, Social Media, Sun Life Financial (@michelle_smyth)
  • Michael Lock, COO, Hearsay Social (@michaelhlock)

Following the Innovation Summit, Hearsay Social and its partners will be attending the LIMRA and LOMA Canada 2013 Annual Conference at the same location, connecting with corporate leaders across the industry.

Register for the Summit today.

We look forward to exchanging ideas with innovators from around the globe, helping some of the worlds largest organizations identify opportunities to leverage new technologies and build relationships in the social era

]]> 0 Yasmin Zarabi <![CDATA[Social media compliance under the new “twin peaks” UK financial services regulatory structure]]> http://hearsaysocial.com/?p=9748 2013-04-24T22:21:20Z 2013-04-24T20:13:12Z Effective April 1, 2013, the Financial Services Authority’s (“FSA”) split into two new regulatory authorities: the Prudential Regulation Authority (“PRA”) and the Financial Conduct Authority (“FCA”). The PRA, which is part of the Bank of England, is now prudential regulator for banks, building societies, and credit unions (collectively deposit-takers), insurers, and major investment firms. The FCA will regulate “conduct” of financial services firms and regulate the “prudential” standards of financial services firms not regulated by the PRA.

The communications rules that were previously governed under the FSA are now governed by the FCA. As with the FSA, the FCA’s Conduct of Business Sourcebook (“COBS”) requires financial and insurance firms to ensure that their communication and/or financial promotions are fair, clear, and not misleading. The FCA will have the power to ban promotions that don’t meet these standards. Marketing teams will need to be extra diligent in producing clean and accurate descriptions, and compliance teams will need to ensure they have robust approval procedures in place.

In addition, extensive guidance has been provided in Chapter 8 of the FCA’s Perimeter Guidance Manual (“PERG”) on the interpretation of the financial promotion restriction, which is intended to ensure compliant behavior in all forms of communication, including via electronic mediums. If communication through electronic mediums (websites or social networks) invite or induce a person to engage in investment activity, it will be considered a financial promotion. The FCA have recognized the significance of the Internet as a medium for communicating financial promotion in their recent revisions to the PERG manual and make clear that “the test for whether the content on a website involves a financial promotion is no different to any other medium.”

Further guidance as to what may or may not involve financial promotion is set out in chapter 8.22. For example, a hypertext link may, in certain circumstances, be a financial promotion in and of itself, and banners or changeable text may also be considered financial promotion by the FCA. However, there is nothing that specifically deals with financial promotion made via social media.

The communication of financial promotions by a person in the course of business is restricted unless:

  • it is from an authorized person;
  • the content of the communication is approved by an authorized person; or
  • the communication is exempt under the FSMA (Financial Promotion) Order 2005 (SI 2005/1529).

If the relevant postings to social media sites are considered to be “financial promotions,” then these will need to be “approved” by an FCA authorized person before they are published. In order for financial and insurance firms to be compliant with the FCA financial promotions communication rules (namely COBS 4, BCOBS 2, ICOBS 2, and MCOB 3), they should ensure they satisfy the following four pillars of social media compliance:

The Financial Services and Markets Act 2000 (FSMA) imposes criminal sanctions for breaches of the financial promotion restrictions. Additionally, agreements entered into by a person as a consequence of a communication made in breach of the financial promotions restrictions may become unenforceable. If communications and financial promotions are not compliant with the guidelines above, the FCA is also empowered to ban them. This power, granted through FSMA, allows the FCA to remove promotions either immediately from the market or prevent them from being used in the first place, all without having to go through any enforcement process.

How can Hearsay Social help?

Hearsay Social’s enterprise technology enables top financial services firms and their advisors and sales representatives to more efficiently and successfully leverage social media to prospect, retain clients, and expand business, all while minimizing reputational and regulatory risk.

The Hearsay Social Compliance Solution specifically helps legal and compliance teams with the social media regulatory requirements summarized above including policy, training, content, supervision, and record keeping.  With customizable workflows and notifications, the solution radically streamlines the supervision and review process, while the Content Library enables marketing professionals to distribute pre-approved brand content to financial representatives field.

Disclaimer: The material available on this blog is for informational purposes only and not for the purpose of providing legal advice. We make no guarantees on the accuracy of the information provided herein.

]]> 0 Ronny Kerr <![CDATA[Financial services leaders from Goldman Sachs, JPMorgan Chase, and Wells Fargo to join Hearsay Social at LinkedIn FinanceConnect]]> http://hearsaysocial.com/?p=9713 2013-05-01T17:18:06Z 2013-04-23T13:30:05Z Content and conversations fuel the customer journey in the age of social media. Strategic content marketing drives deeper connections with your customers, which ultimately drives more business.

Next Thursday, May 2, at LinkedIn FinanceConnect, executives from the financial services industry, including Claire Huang (CMO, JPMorgan Chase), Lisa Shalett (Head of Brand Marketing and Digital Strategy, Goldman Sachs), and Rachel Perkel, (SVP, Head of Wealth Management Marketing, Wells Fargo Bank), will join Silicon Valley leaders LinkedIn and Hearsay Social to discuss how to use content to best leverage social sales and marketing.

Whether you’re seeking to understand how to balance social media rewards or risks, concerned about traversing the social media regulatory landscape, or just interested in the LinkedIn Influencers program, the LinkedIn Marketing Solutions team has prepared a stellar event.

If you’re attending, be sure to catch Hearsay Social on the following panels:

Compliance track: 2013 Regulatory Landscape  (3:15 – 4:00 PM)

  • Yasmin Zarabi, Senior Director of Legal, Hearsay Social
  • Joe Price, Senior Vice President, Corporate Financing/Advertising Regulation, FINRA
  • Iain Duke-Richardet, Director – Head of Technology & Licensing Compliance, RBC
  • Sean Shore, Manager, Business Conduct, National Bank Financial Wealth Management
  • Lisa Shalett, Head of Brand Marketing and Digital Strategy, Goldman Sachs

Navigating the social media regulatory landscape can be daunting, especially for global firms. In this session, we will discuss the current state of social media compliance and how innovative compliance organizations can evolve to stay ahead of future regulatory and technology changes.

LinkedIn Influencers Roundtable (4:00 – 4:45 PM)

Only four months old, the LinkedIn Influencer program delivers fresh and frequent content to our insight-hungry member base. Three of our most prolific influencers join us to discuss the impact that the combination of content, social, and the professional audience has had on their lives and businesses.

Compliance track: Path from Compliance to ROI (4:00 – 4:45 PM)

  • Michael Lock, COO, Hearsay Social
  • Knut Olson, Senior Vice President, Financial Network, Thrivent Financial for Lutherans
  • Paul Johnston, Vice President and Deputy General Counsel, Thrivent Financial for Lutherans

Many firms get started in social media in order to manage risk, but with the appropriate policies and processes in place, LinkedIn is a valuable asset to the field organization. How do successful firms make the transition from social media compliance to ROI?

]]> 0 Yasmin Zarabi <![CDATA[SEC embraces the use of social media for public companies to broadcast material nonpublic information]]> http://hearsaysocial.com/?p=9698 2013-05-20T22:59:51Z 2013-04-15T21:39:18Z As advocates for social media, Hearsay Social is pleased with the recent Securities Exchange Commission Release noting that publicly held companies may release material non-public information on social media platforms in compliance with Regulation Fair Disclosure (Reg FD) provided that certain steps are taken prior to such disclosure:

(i) advance notice of the type of disclosures that will be made

(ii) the specific social media platforms that will be used (including the channel’s address would be a good practice) so that the public has an opportunity to use such channels to obtain the information

The SEC stance is in line with the reality of state of communications today. Majority of shareholders are using social media today to access real-time financial information, as such, why wouldn’t they also learn about material information of their investments on such forums? Provided that companies and their executives follow their internal communication rules/policy, provide their investors advance notice and a chance to subscribe to or join the right company social media platforms, then shareholders should be able to obtain material non-public information on these forums.

With use of a platform such as Hearsay Social, Companies can now publish pre-approved corporate communications to the public across all social media platforms with the ability to monitor and retain such communication.

Disclaimer: The material available on this blog is for informational purposes only and not for the purpose of providing legal advice. We make no guarantees on the accuracy of the information provided herein.

]]> 0 Ronny Kerr <![CDATA[JFAM Forum: How to reach financial services clients in 2013]]> http://hearsaysocial.com/?p=9623 2013-04-12T20:46:58Z 2013-04-12T20:40:59Z

From left to right: Gina Ballenger, VP, Enterprise Social Media Marketing, Wells Fargo; Chad Smith, Global Social Content Dist. Manager, iShares/Blackrock; Matthew Dunn, Director Social Strategies, Franklin Templeton Investments; Clara Shih, Founder and CEO, Hearsay Social

Yet another successful JFAM Forum took place in San Francisco yesterday focused on one crucial question: What do financial marketers want from their marketing in 2013? Sponsored by Financial Times, Hearsay Social, The Street, and others, the forum brought together speakers and attendees to talk brand reputation and content marketing in financial services, and how new technology like social media affects these hot topics.

As a result of the financial crisis and other factors, firms have lost the trust of their customers. In the morning keynote, Hearsay Social CEO Clara Shih carefully explained that customers increasingly recognize and ignore mailers and impersonal campaigns created by “faceless organizations.”

So what are customers responding to? Personal notes from actual people.

The marketer’s job in 2013 and for years to come is to meet the customer where they actually are–on mobile and social–and engage with them in an authentic, personal manner. Marketers and reps that are good at what they do are rightfully focusing on quality of messages as opposed to quantity.

In the social media age, content is king. Financial firms are quickly learning that by sharing and engaging on social networks, and by leveraging the authenticity and humanness of their field, they can earn back their customers’ trust and business.

]]> 0 Ronny Kerr <![CDATA[Bloomberg TV: SEC OK’s Facebook, Twitter for company disclosures]]> http://hearsaysocial.com/?p=9578 2013-05-20T23:00:02Z 2013-04-03T21:13:40Z U.S. companies, according to the SEC, will now be able to post their earnings on Twitter or update their status on Facebook as long as investors have been told in advance where to look. Watch the below clip for more perspective on the announcement from Hearsay Social Founder Steve Garrity, Graham Fisher’s Josh Rosner, and Bloomberg’s Cory Johnson on Bloomberg Television’s “Street Smart.”

]]> 0 Yasmin Zarabi <![CDATA[Understanding new social media guidelines from the FTC Dot Com Disclosures]]> http://hearsaysocial.com/?p=9476 2013-03-22T21:51:48Z 2013-03-22T20:35:46Z The Federal Trade Commission (FTC) recently issued a long-awaited update to its 2000 Dot Com Disclosures guide, taking into consideration the new online mediums for advertisers, specifically social media. The basic fundamentals of the consumer protection rules for advertisements remain the same, even for social media: advertisements must be truthful, not misleading, and proper disclosures made.

How do these guidelines apply to social media?

There are several important implications for advertisers to consider. First and foremost, the guidelines state that clear and conspicuous disclosures must be posted to avoid deception. If space is limited for the medium (i.e. Twitter) then the ad should be modified or not be made. Secondly, guidelines need to avoid using hyperlinks, but when necessary, they must be clearly marked. Finally, regardless of space constraints, advertisers are required to include disclosures alongside their ads.

Guidelines for posting disclosures

This is an example of a hidden disclosure with an unmarked hyperlink:

Example of a Facebook Page post not following FTC guidance.

If following proper practice, a brand should display its social media advertising disclosures prominently and in close proximity to the claim:

Example of a Facebook advertisement following FTC guidance.

Guidelines for hyperlinks and scrolling

If a hyperlink is necessary, then make sure it is specifically named and conspicuously placed. For example, in this tweet, the celebrity endorsing this product has clearly stated that they are a spokesperson for the product and that the pertinent information associated with the tweet can be found in the corresponding Bit.ly hyperlink:

@FamousCeleb: I’m a spokesperson for BarLite and it changed my life. More information: Bit.ly/BarLite #liteonlife

In the case of a long text, make sure the disclosure is visible near the claim. If the claim must be placed below a long screen of text, be sure to hyperlink the claim or disclosure within the text at the top of the screen.

Guidelines for pop-up disclosures

Pop-up disclosures are best when the disclosure is displayed before the decision to purchase is made.

For example, within the shopping cart experience on the advertiser’s website, the customer must be prompted to read the disclosure and confirm they have done so.

Ultimately, the advertiser needs to do everything they can to ensure that the consumer is aware of and has read all of the necessary disclosures associated with the product.

Disclaimer: The material available on this blog is for informational purposes only and not for the purpose of providing legal advice. We make no guarantees on the accuracy of the information provided herein.

]]> 0 Yasmin Zarabi <![CDATA[New SEC guidance: Not all social media communications require filings with FINRA]]> http://hearsaysocial.com/?p=9355 2013-03-27T20:59:00Z 2013-03-18T16:47:18Z On March 15th the Securities and Exchange Commission (SEC) through its Division of Investment Management issued a guidance to clarify the obligations of mutual funds and other investment companies to seek review of materials posted on their social media sites.

As a result of abundance of caution to be compliant with the filing requirements of Section 24(b) of the Investment Company Act of 1940 or Rule 497 under the Securities Act of 1933 and Financial Industry Regulatory Authority (“FINRA”) Rule 2210.1, many investment companies and mutual funds have been overly filing their social media communications with FINRA. Given such increase of filings, SEC clarifies the requirements by providing real life examples of the kinds of communications that funds, advisers and the public engage in and that would be subject to a requirement to file with FINRA, along with examples of communications that would not trigger a filing requirement.

Here are examples of social media communications that generally DO NOT NEED to be filed:

  • An incidental mention of a specific investment company or family of funds not related to a discussion of the investment merits of the fund.
  • The incidental use of the word “performance” in connection with a discussion of an investment company or family of funds, without specific mention of some or all of the elements of a fund’s return.
  • A factual introductory statement forwarding or including a hyperlink to a fund prospectus or to information that is filed pursuant to Section 24(b) or Rule 497.
  • An introductory statement not related to a discussion of the investment merits of a fund that forwards or includes a hyperlink to general financial and investment information such as discussions of basic investment concepts or commentaries on economic, political, or market conditions.
  • A response to an inquiry by a social media user that provides discrete factual information that is not related to a discussion of the investment merits of the fund. The response may direct the social media user to the fund prospectus or to access information filed with FINRA pursuant to Section 24(b) or Rule 497 or to contact the issuer through a different medium (e.g., phone, e-mail).

Here are some examples of social media communications that generally DO NEED to be filed:

  • A discussion of fund performance that provides specific mention of some or all of the elements of a fund’s return (e.g., 1, 5, and 10 year performance) or promotes a fund’s returns.
  • A communication initiated by the issuer that discusses the investment merits of the fund.

It is important that the regulatory authorities continue to protect the public from misleading financial advertisings, but as Hearsay Social encourages the value of social media communication, it is helpful to see authorities applying real life practicality to these different means of communication. We appreciate clarification from the SEC and will continue to work with our investment and mutual funds clients to manage their communications on social media with the appropriate balance, filing communications when appropriate.

Disclaimer: The material available on this blog is for informational purposes only and not for the purpose of providing legal advice. We make no guarantees on the accuracy of the information provided herein.
]]> 0