Social media risk management is a complicated topic that seems to suggest more questions than answers. With rapidly developing technology and the constantly growing role of social media in personal and business lives, it is almost impossible to predict and mitigate every risk that may arise from using social media for business. Is your software compliant with IT safety requirements and current privacy regulations? Are you spamming your fans? Are your tools and tactics compliant with Twitter and Facebook Terms of Service? Are you following your company’s social media policy when posting online and if yes, are your posts still going to get you into legal trouble with SEC, for example?
These are just a few questions that make companies approach social media with extra care, but luckily (and I say that with caution) more and more guidelines are being issued by various organizations and legal/government institutions to help industries navigate the dangers of “wild” social.
I recently posted a blog about compliance with SEC social media regulations. It appears that the SEC’s approval to use social media for public announcements triggered an NYSE response in a form of a letter to all NYSE-listed companies to remind them “to remain cognizant of the NYSE’s procedures for public release of material information when those companies consider making announcements via social media.” According to the NYSE’s Listed Company Manual, “any company making an announcement expected to materially affect the market for the company’s securities during market hours [must] notify the NYSE by telephone at least 10 minutes prior to the release of the announcement.” The requirement was put in place by the NYSE to determine whether a temporary trading halt should be put on company’s securities to allow investors to evaluate the news properly.
It is important to mention that NYSE guidance concerns material news announcements only, and the above-mentioned letter provides a list of news examples that NYSE considers material. Examples include but are not limited to “earnings, mergers and acquisitions, securities offerings and pricings related to those offerings, major product launches or new patent approvals, and dividend announcements.”
Social media risk management is an evolving topic and there’s sure to be more to follow. You can read more about the NYSE guidance in this article.