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SEC issues new C&DIs of rules related to social media communications

  • SEC (US Securities and Exchange Commission) Image

Apr 23, 2014

The staff in the SEC’s Division of Corporation Finance has issued new Compliance and Disclosure Interpretations (C&DIs) of rules under the Securities Act of 1933 related to communications with security holders or investors through social media outlets that limit the amount of text to be used in such communications.

The C&DIs clarify that communications made under Rule 165(c)(1), Rule 134(b), Rule 134(d), or Rule 433(c)(2)(1) must contain a legend or statement as required under the rule(s) and that a hyperlink may be used to satisfy the legend or statement requirement only if all of the following conditions are met:

  • The platform through which the electronic communication is sent has technological limitations on the amount of text or number of characters.
  • The information to be communicated with the required legend or statement would cause the communication to exceed the text or character limitation.
  • The communication (1) includes an active hyperlink to the required legend or statement and (2) prominently conveys that the hyperlink contains important information.

The C&DIs also clarify that a third party’s retransmission of a social media message or posting received from an issuer that complied with Rules 134 or 433 would not be attributable to the issuer as long as (1) the third party is “neither an offering participant nor acting on behalf of the issuer or an offering participant” or (2) the issuer is not involved with the retransmission (other than having prepared and distributed the original communication).  

For more information, see Questions 110.01, 110.02, 164.02, 232.15, and 232.16 of the  Securities Act C&DIs on the SEC's Web site.

Correction list for hyphenation

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