Chief executives can now post any information in social media as long as they inform investors before hand about their social media strategy.
The Securities and Exchange Commission revealed new disclosure rules on Tuesday on how companies can use social media to disseminate information. While the new rules encourage social media sharing, companies may still reduce interaction on the platform. Many say that companies will opt to limit information-sharing to their official communication lines.
A few months back, the SEC encountered issues with Netflix concerning social media disclosure. During the incident, the raised concerns about information-sharing on the platform. However, the SEC has since made an effort to ease its rules and regulations on social media sharing.
The SEC maintains that companies can use social media as a legitimate outlet for communication. The companies need only clarify which social media sites will be used as official information outlets.