Helped an innovative company avoid potential regulatory gray areas with user-generated investment content.
Objective
Help a non-regulated entity prevent inadvertent regulated activity and maintain data security.
Background
A provider of tools, education, and community features for investors sought InnReg’s help to build and operate a compliance program supporting the activities on its platforms. Although it does not act as an investment advisor or broker dealer, it needed to ensure that content on the platform did not cross the line into activities that are regulated by the SEC. In addition, it is critical to follow FTC rules and regulations around marketing content publication.
See also:
Challenges
By offering an environment where end-users contribute content and interact with each other, the firm needed to monitor compliance at scale within an active community.
The firm needs to tread a careful line avoiding the appearance that content directly offers investment advice or impacts equities markets.
The firm also must ensure the security of user data that it manages and maintains.
InnReg's Solution
Planned and implemented a fully-outsourced compliance program and manage it on behalf of the client.
Provided a one-stop-shop for 1) content and data analytics around user activity, 2) review of content, social media, and advertising in accordance with FTC rules, and 3) data protection and security.
Client Results
The client is one of the market-leading companies in its space with a thriving and engaged user community.
Risks of inadvertent regulated activity have been mitigated.
The client continues to remain on the right side of the line and is able to demonstrate that its activities do not require registering as a regulated entity.
The security of user data is managed effectively.
