Plans to crack down on misleading financial promotions through social media services such as Twitter will move further forward tomorrow.

The FCA's new social media guidance is set to be firmed up as the chance to comment on and shape the proposals ends.
A consultation was launched in August after been "extensive conversations with industry" over the past 18 months during which firms explained difficulties in complying with some of the FCA rules.
In particular, this was the case for the financial promotion rule for character-limited forms of social media such as Twitter.
The FCA said it "recognises that social media particularly are powerful channels of communication" and "does not want to prevent their use".
But it has reminded firms that any form of communication is capable of being a financial promotion, depending on whether it includes an invitation or inducement to engage in financial activity.

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Clive Adamson, director of supervision at the FCA, said: "The FCA sees positive benefits from using social media but there has to be an element of compliance. Primarily, what firms do on social media must ensure customers are at the heart of their business.
"Our overall approach is that financial promotions, whether on social media or traditional media, should be fair, clear and not misleading.
"We have had extensive industry engagement on this issue and we believe our guidance is a sensible approach that doesn't affect industry's ability to innovate using new forms of media.
"We recognise social media are constantly evolving. We, therefore, welcome feedback to the consultation and look forward to continuing the discussion with industry."
Firms should ensure their original communication would remain "fair, clear and not misleading even if it ends up in front of a non-intended recipient through others re-tweeting on Twitter or sharing on Facebook", the FCA said.
The consultation paper set out in further detail specific areas that firms need to consider, and provides some solutions and examples.
These include:

• Promotions for investment products - There is a specific requirement that financial promotions for investment products are identifiable as such. The FCA's view is that – for social media in particular – it is important that, in all cases, it is clear that a promotion is a promotion. One generally accepted way to do this, for character-limited media, is the use of #ad in online posts.
• Stand-alone compliance - Each communication (e.g. a tweet, a Facebook insertion or page, or web page) needs to be considered individually and comply with the relevant rules.
• Risk warnings and other required statements - Firms are reminded that there are requirements to include risk warnings or other statements in promotions for certain products/services. These rules are media-neutral and therefore apply to social media as they would to any other medium. When taken into account with the supervisory approach to standalone compliance, this poses particular challenges for the use of character-limited social media. One solution to the problem of character limitation is to insert images, such as infographics into tweets, which allows relatively unrestricted information to be conveyed. However, where the financial promotion triggers a risk warning or other information required by our rules this cannot appear solely in the image.
• Image advertising – The FCA reminds firms that it remains possible to advertise their presence in the market through 'image advertising' in a way which is unlikely to present difficulties with character limits.

Anyone wishing to take part in the consultation needs to do so by tomorrow.

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