New guidance from British regulators sets out its approach for regulating financial firms’ use of social media.

The UK Financial Conduct Authority (FCA) published its guidance Friday on financial promotions over social media, such as Twitter and Facebook. The guidance aims to assist firms in their use of social media, and to ensure that they are compliant with FCA requirements.

The guidance stresses that all communications (including financial promotions) must be fair, clear and not misleading. And, it stresses that firms must take account of the fact that communications through social media can reach a wide audience very rapidly when deciding whether to promote through social media, and when deciding on the nature of their promotions.

It says that firms should ensure that their original communication would remain fair, clear and not misleading, even if it ends up in front of a non-intended recipient, through retweets, or sharing on Facebook, for example. “One way of managing this risk is the use of software that enables advertisers to target particular groups very precisely,” it says.

Additionally, the requirement to be fair demands that firms balance how financial products and services are promoted, so that consumers have an appreciation of the relevant risks along with the benefits, it stresses.

Firms should also consider whether it is appropriate to use character-limited media, such as Twitter, or Vine, as a means of promoting complex products, it says. Instead, it may be possible to link to more comprehensive information, provided that the promotion remains compliant in itself, it says. Alternatively, it may be more appropriate to use ‘image advertising’ to promote a firm more generally, it says.

The guidance also sets out specific areas that firms need to consider in further detail, including requirements for approving promotions and record keeping, and provides some solutions and illustrative examples.

“Social media is already an important tool for industry to engage with customers and its use is only likely to grow. Financial promotions, whether on social media or traditional media, must give customers the right information and meet our requirements to be fair, clear and not misleading,” said Tracey McDermott, director of supervision and authorisations at the FCA. “We have had extensive industry feedback during our consultation. We believe this guidance reflects a sensible approach that allows the industry to innovate using new forms of media and at the same time ensures customers get the right level of protection.”