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France’s AMF Issues Public Consultation on the Business Use of Social Media

With social media playing an increasingly important role in communications, France’s financial regulator, the Autorité des Marchés Financiers (AMF), has issued a public consultation to clarify its approach to regulation on the business use of social media by asset management companies and debt securities issuers. According to the AMF, communications and marketing professionals were quick to understand the powerful penetration and distribution of information that these media allowed, and at a lower cost.”
The consultation contains proposals for five different topics:

  • targeting by type of investors
  • archiving
  • treatment of third party publications
  • opinion posting on the internet and on social media
  • internal organization of companies to communicate using social media.

Additionally, since business communication today is being carried over these new channels, AMF advises financial services companies to be responsible for archiving all communications on social media including private messages between two users and messages that may have been deleted from social media.  Moreover, it recommends an archiving policy that is “harmonious, stable over time, organised by type of information, and with an archiving period of sufficient length for investors.”
Since targeting by type of investor is difficult in an open medium such as social media, firms are advised to ensure “standalone compliance” of every tweet or message.  This means that the AMF expects every tweet on its own to be balanced, with benefits and risks equally clear. AMF believes that this ensures that marketing messages are fair, clear and not misleading.
AMF states that retweeting/sharing third party opinions or communications is the responsibility of the company since the company is only sharing such comments because it is favorable.
Regarding internal organization, AMF recommends that asset management companies and debt securities issuers have a policy that clarifies social media communication rules for employees and partners.  To ensure that these new mediums are used appropriately in financial firms, AMF provides a number of proposals ranging from ensuring head of compliance is involved in drafting the editorial policy to asking firms to differentiate and systemize content that needs to be pre-approved and those that don’t.
Overall, the AMF consultation proposals are in agreement with the recent guidance issued by the UK’s Financial Conduct Authority (FCA) and FINRA in the US.  It is important that the regulatory authorities continue to protect the public from misleading financial advertisings but in a way that is practical in today’s digitized world. Hearsay Social intends to provide our recommendations and comments to AMF and will continue to work with our banking clients to manage their communications on social media with the right balance.
The consultation will run until November 13, 2015 and is open for comments, suggestions and questions directed to directiondelacommunication@amf-france.org.
Read the full AMF consultation.