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      FAQs AND SOCIAL MEDIA MARKETING ADVICE FOR INTRODUCING BROKERS (IBs)

      This article provides some guidance for IBs regarding marketing in social media platforms.

      Social Media platforms are an extremely useful tool for IBs to promote their services. However, there are many rules and regulations in the financial sector; therefore, it is important to be aware of them to carry out effective and legal marketing campaigns. The Financial Conduct Authority's (FCA) regulations regarding Social Media advertising have been attached to this article; however, here at Pelican we have picked out some key points for you! 

      Firstly, we are going to include some key DOs and DON'Ts when it comes to financial promotions:

      DONT:

      • Cherry-pick data, especially when it comes to trading performance. In this case you must show at least 12 months of performance in order to market a fund. 
      • Make unsubstantiated, vague or misleading statements: "X fund will guarantee long-term profits and financial security for you and your family". This breaches FCA regulations and you're liable to be sanctioned. 
      • Provide one-sided advertising that ignores the risks associated with trading. 

      DO:

      • State your fund's performance, provided it is factual and it is shown over the last 12 months. For example: "Over the last 12 months our fund made a profit of 15%"
      • Include risks associated with your product, quoting sound facts and figures: "90% of users lose money when they trade with our app". 
      • Make it clear that your post is a promotion/ advert. This can either be done in many ways, but the safest way to do this is by explicitly stating that the post is a promotion. Not doing this is a breach of the FCA's rules and regulations and could lead to sanctions. 

      Below are also some extracts from the FCA's Social Media Guidance for Financial Promotions, these broadly summarise the key points in the document. For more information on financial regulation regarding social media please see this document. 

      "Any form of communication (including through social media) is capable of being a financial promotion, depending on whether it includes an invitation or inducement to engage in financial activity … the key factor is the purpose of the communication rather than who is making it. As it says in the FCA’s guidance at PERG 8.5.2G, there has to be a commercial interest on the part of the communicator. "
      "Where a personal social media account (such as a Twitter account) is used by someone associated with a particular business, that individual and the firm should take care to distinguish clearly personal communications from those that are, or are likely to be understood to be, made in the course of that business. "
      "It is important that in all cases, it is made clear that a promotion is a promotion. This can be by labelling the promotion as such, or it may be clear from the context." 
      "It remains a fundamental requirement that all communications (including financial promotions) are clear, fair and not misleading. This implies balance in how financial products and services are promoted, so that consumers have an appreciation not only of the potential benefits but also of any relevant risks."
      "It may be possible to signpost a product or service with a link to more comprehensive information, provided that the promotion remains compliant in itself."
      Below are two examples of what compliant and non-compliant advertising may look like:
      Screenshot 2021-06-10 at 15.33.06

       Source: FCA Social Media and Communications Guidance

      Below are some Frequently Asked Questions for Introducing Brokers (FAQs)

      How do I sign up as an Introducing Broker to Pelican?

      If you would like to become an IB please click on the following link: https://share.hsforms.com/1ShONLM-nS-26XMpRdAGRLw5gydx and complete the form. You will then be guided through a sequence of simple steps!

      Can I use the amount of money I made from trading yesterday as a promotion on Instagram? 

      No, the FCA rules on financial promotions stipulate you must use a minimum of 12 months of performance to directly market a fund. 

       

      Now under Pelican's umbrella FCA regulation are my signals beyond my pelican service and my presence on the App regulated? 

      No, you are not regulated by us to give signals outside of your master auto-copy account or the confines of the Pelican App (including White Labels). For example on another messaging app like WhatsApp.

       

      We see other people advertising their trades the whole time, how come they are allowed to?

      They are not regulated and are liable to be sanctioned by the Financial Conduct Authority.

       

      Are the rules different for marketing within the European Union?

      The European Union regulations on financial promotions are equivalent to the UK. 

      Furthermore, just because a marketing campaign is carried out outside the UK, you should still be careful since it could have an impact within the United Kingdom. Here is an extract from the FCA's Social Media and Customer Communications Guidelines:

       "Clearly, digital communications of all types, but including social media, are not limited by national borders. There are also of course a number of measures in place within the European Economic Area (EEA) to facilitate trade and commerce within the EEA. As the UK regulator, our rules cover all financial promotions capable of having an effect in the UK, unless an exemption is available."

       

      Is there any way I can share a trade with my social media following?
       Yes, but you can only do this using the share function in the positions page of the Pelican App.
       
      Can I have a free promotional telegram group where I show the analysis behind trades of the day to potential clients?
      Yes, you can discuss the analysis behind trades in a telegram chat, or in any other social media platform provided that the purpose of the message is purely educational and in no way promotional. 
       
      Are we allowed to disclose how many deposits we have received in a week/ month? For example (as long as factual) "30 are clients joined us this week alone!"
      Yes, you are allowed to disclose metrics like this one, provided that they are factual. 
      However, we would like to stress that you cannot cherry-pick trade performance and share it on social media.
       
      Can affiliates post about their own trading profits, whether its Tradingview / Meta Trader etc. If so what do they need to say and/or what disclaimers (if any) are necessary?
      You can only share trading peformance using the "share function" in the Pelican App. You are not able to take any form of screenshot of trading performance and post them in other social media. If you choose to do this you are liable to be sanctioned by the Financial Conduct Authority.
       
      Can we show any results from MetaTrader if it’s copying the true Fx profile?
      No, all results have to be shown within the context of a 12 month track-record.
       
      Do I have to place risk warnings in all of our financial promotions?
      Yes, whenever you are doing a financial promotion i.e. there is a commercial interest on behalf of the communicator you must include a risk warning. 
       
      Can I be made an Appointed Representative of Pelican Trading?
      No, at Pelican we do not endorse Appointed Representatives in any capacity, even as Introducing Appointed Representatives. However, we do form partnerships with Introducing Brokers under our own regulation.