1. Operations Professionals and Social Media Compliance Hurdles and Business Value for Financial Firms Clara Shih (Moderator/Presenter) Bestselling Author of "The Facebook Era” CEO and Founder of Hearsay Social Dr. Robert Ellis (Panelist)Co-Founder of TwoSorts.com Former SVP, Technology Innovation Portfolio Management Group at Bank of America Alexandra Basak Russell, Esq. (Panelist)Compliance Manager at Hearsay Social SIFMA Annual Operations Conference and Exhibit 2011

2. Agenda Introduction Business value of social media for financial firms Regulatory challenges Putting social media into practice Q&A panel discussion

3. We live in a Social Era facebook 500M users twitter 200M users linkedin 100M 2004 2005 2006 2007 2008 2009 2010

4. Technology eras of our lifetime Social 2011 Internet 1990s PC 1980s Mainframe 1970s

5. 2009: Social networking surpasses email

6. 2010: The year of social media strategy 73.5% of US companies consider social media a top priority —Survey of Chief Marketing Officers Source: Forrester Research

7. 2011: The year of social media execution Source: Burson-Marsteller Communications Group, 2011

8. Your colleagues and your firm’s clients are on social media. Are you? 9 10 out of of your customers are active on social media 23 out of every financial professionals are on at least one social network

9. Agenda Introduction Business value of social media for financial firms Regulatory challenges Putting social media into practice Q&A panel discussion

10. Business value and use cases on social media

12. Relationship-building

13. Referrals

14. Staying top of mind

16. Operations Professionals and Social Media:Compliance Hurdles and Business Value for Financial Firms Alexandra Basak Russell, Esq. Compliance Manager at Hearsay Social

17. Agenda Introduction Business value of social media for financial firms Regulatory challenges Putting social media into practice Q&A panel discussion

18. And new regulatory challenges… Creating and implementing a plan “reasonably designed to monitor” employee communication with the public Complaint handling procedures Record retention and archiving Regulation S-P Principal pre-approval of static communications Suitability concerns for investment products Testimonials and endorsements (Antifraud) Regulation F-D

19. FINRA Regulatory Notice 10-06 Not binding or actionable See also Guide to the Internet for Registered Representatives

21. 5 categories

22. Advertisements (Static communications)

23. Sales literature (Email to 25+ prospective retail customers)

24. Correspondence (IM)

25. Institutional sales material (Broker-to-broker messaging)

28. FINRA regulations governing the use of social media

29. SEC regulations related to the use of social media

30. Takeaways Guidance about certain platforms, applications, and features are constantly evolving Use principles of fairness, discretion, and accuracy Keep it general (think suitability) Don’t report on product or market performance Testimonials present added challenges for certain financial professionals (Investment Adviser’s Act of 1940)

31. Operations Professionals and Social Media:Compliance Hurdles and Business Value for Financial Firms Dr. Robert Ellis Co-Founder of TwoSorts.com Former SVP, Technology Innovation Portfolio Management Group at Bank of America

32. Agenda Introduction Business value of social media Regulation of social media Putting social media into practice Q&A panel discussion

33. It’s a journey we’ve done before Think as well of communication eras Telephone Fax Email IM And in other areaslike systems management Learn from the past – adapt to the new channel

34. Learn from doing email & IM It’s a whole company problem to solve Don’t sell an idea and an ask at the same time Test and Learn - tools, controls, policy Fit social rather than make it fit you Make social part of your product development Listen, Engage, Learn, Promote

35. Challenges Identity – verification and encapsulation Authorization – from entitlements to use Service Management – no such thing Social sites – for members not companies Technology – they all work differently Treat each site differently – from audience to implementation and onto business as usual

36. Good news – challenges solved Social enterprise integration is maturing We can now listen very well We can have a managed service interface We can do pre and post review We can do some triage We don’t need direct social site access Emerging capabilities: Single sign on, mobile convergence

37. Agenda Introduction to social media for business Business value of social media for financial firms Regulation of social media Putting social media into practice Q&A panel discussion