The Financial Industry Regulatory Authority said broker-dealers are updating their practices to address risks related to social media influencers, or "finfluencers," and referral programs after the regulator began conducting an exam sweep last year.
The sweep, announced by FINRA last September, also probes firms on how they "manage their obligations related to information collected from those customers and other individuals that may provide data to firms."
FINRA CEO Robert Cook said on July 22 that a sweep related to "finfluencers" was coming.
Greg Ruppert, executive vice president of Member Supervision at FINRA, said the information released Tuesday provides "some initial themes" from the ongoing targeted exam.
"We hope firms will use this update as an opportunity to look at their practices in this space and consider any potential regulatory obligations," Ruppert said.
The first part of the review focuses on firms' use of social media influencer and referral programs to promote their products and services and recruit new customers. The second part addresses firms' privacy notices and options to opt out regarding the collection and sharing of their usage information.
