Following a consultation in August last year, the FCA’s final guidance on social media financial promotions has now arrived.

The regulator’s decision to maintain a “media neutral” approach in a world where technological development rapidly outpaces regulation seems sensible, even if it does throw up a few practical challenges, most particularly in “character-limited” media such as Twitter.

The key requirements remain that all invitations or inducements to engage in investment activity, communicated in the course of a business, must be fair, clear and not misleading and promotional material must be clearly identifiable as such.

To meet this latter requirement in the Twittersphere, the FCA had briefly championed the identifier #ad. Alas, tech savvy respondents to the consultation pointed out the functional drawbacks of this approach (e.g. hashtags are hyperlinked to bring up all tweets utilising the same tag) and the suggestion has therefore been dropped. There is no direct replacement suggested for #ad – it is left that material which is obviously promotional needs no further exposition and only that which is camouflaged as celebrity endorsement or journalistic copy needs to include additional signposting.

The FCA is far from alone in its initial mistake of thinking hashtags were an appropriate prefix for risk warnings. The practice is widespread and will probably remain so despite the consultation until a new common approach is established. Given that your standard risk factor – say, “the value of shares can fall as well as rise” – can weigh in at 45 characters or more (fully one third of your per-Tweet allowance) it is not surprising that more pithy options have been preferred which, appropriate or not, rather suit the hashtag prefix with its scant regard for full sentence construction. Common examples include #CapitalAtRisk (a slender 14 characters) or the ubiquitous, if rather meaningless, #InvestAware – the financial services equivalent of “Enjoy Tennent’s Extra Strong Lager Responsibly”. The sentence “Your capital is at risk” (minus the hashtags and spaced normally) should still do the trick in a relatively quick and simple manner for most straightforward share and service promotions. The spread betting companies (due to their less limited downside potential) and those with complex charging structures will need to go further.

It is possible to expand your Twitter word count using infographic content and some handy examples of compliant and non-compliant promotions are included with the guidance here. However, the FCA point out that the Twitter functionality that allows a user to switch off infographic content means that risk warnings need to appear in the body of the Tweet and cannot be confined to imbedded pictures.

One thing that was not addressed in the guidance was how the advertising regime from the Prospectus Rules (PR 3.3) was to apply in social media situations.

If a firm wishes to promote a share offer made by way of a prospectus, all advertisements of that offer are required to contain a bold and prominent statement to the effect the advertisement is “not a prospectus but an advertisement and investors should not subscribe for the shares on the basis of the advertisement but only the prospectus”.

Even when rationalised down, this statement clocks in at 140 characters plus on its own – leaving no room to expound the merits of the offer nor inform would be investors of where they might locate the document (another requirement of the Prospectus Rules). For the time being promoters may have to trust that common sense will prevail as it seems unlikely that many will want to expend their precious word count warning readers that each Tweet is “not a prospectus”.