Social media has effectively altered a number of ways humans operate: the international political scene is different because of its use as a forum for activism; communication technology has changed because of social media’s vital role; business has altered to incorporate a newfound method of marketing. But in one way, business will not change because of social media, according to the Securities and Exchange Commission. As the SEC figures out how the future of business compliance will incorporate online tools, it has decided that a total rewrite of its rules is not necessary because of the new role of social media.
Some specific principles will stay in place. Financial Planning reports that the SEC will maintain its regulations regarding compliance, record keeping, and anti-fraud. The guidance provided for advertising and promotion — especially in terms of the records kept on the material post through advertising channels — will stay the same regarding the inclusion of entities such online social networks.
Senior Counsel at the SEC’s Investment Adviser Regulation Office is quoted in Financial Planning’s report: “Broadly, firms that communicate through social media must retain records of those communications covered by the record-keeping rule. It’s really the content that’s determinative rather than the form of communication used.”
It is no secret that marketing and advertising have experienced an overhaul since the inception of social media; Facebook, Twitter, LinkedIn, and otter popular applications have caused the world of advertising to turn on its head. But in the legal world as well, social media is now a heavy part of legal usage. A 2013 study revealed that social media use among in-house counsel has reached an all-time high; 73 percent of respondents to a survey revealed that they use social media tools. No doubt, the integration of the SEC’s rulings with the future of legal proceedings for businesses will have to flesh out one day.