Last year, FINRA issued
Regulatory Notice 10-06 regarding the use of blogs and social networking websites such as Facebook,
Twitter, and LinkedIn by brokers to communicate with the public. The Notice
made clear that the use of such "Web 2.0" tools would be subject
to applicable federal securities laws and self-regulatory organization
(SRO) rules, including the supervision, suitability, and record retention rules.
Brokerage firms have been slow to allow use of social networking sites
in light of FINRA's strict compliance guidelines. But now, Morgan
Stanley Smith Barney expects to be the first major brokerage to allow
its brokers to use such social networking sites.
As reported by Reuters, initially 600 MSSB advisors will be allowed almost full use of LinkedIn
and restricted use of Twitter. MSSB plans to expand the program to the
firm's entire force of 17,800 advisors within six months.
To comply with FINRA's compliance guidelines, MSSB will install technology
to capture and retain all communications on approved social networking sites.