SEC Issues Social Media Content Filing Guidance
The staff of the Division of Investment Management has issued guidance on when fund firms should file social media content with the SEC where FINRA does not require filing of such material. The SEC requires filing of the material where it discusses fund performance or the fund’s investment merits. However, the staff would not require filing where the interactive content only includes a hyperlink to fund literature, a response to a social media user that includes “discrete factual information,” or incidental use of the word “performance.” In general, whether filing is required will depend on the particular facts and circumstances. Section 24(b) and Rule 497 of the Investment Company Act require filing of certain material if not filed with FINRA, and FINRA generally considers social media content as a public appearance exempt from filing.
OUR TAKE: It is unclear whether the staff will review the filed materials or provide feedback to firms. This guidance may put pressure on FINRA to change its view of social media content and require filing.