SEC Staff Issues Guidance Permitting Hyperlinks to Cautionary Statements and Legends in Social Media Communications

On April 21, the SEC’s Division of Corporation Finance issued Compliance and Disclosure Interpretations (CDIs) clarifying the staff’s position on the communication by social media of certain required disclosures for securities offerings, proxy solicitations and tender offers. The SEC staff advises that, if specified conditions are satisfied, issuers and other transaction participants may include in a communication an active hyperlink to any cautionary statement or legend required under SEC rules to accompany the other information conveyed in the transmission. The new guidance endorses a common approach employed by market participants to overcome the limitations of some social media platforms (particularly Twitter) on the number of characters or amount of text that can be included in a communication. The staff also indicates in the CDIs that under certain circumstances a re-transmission of an issuer’s offering-related communication by a third party via social media (such as a “re-tweet” on Twitter) will not be attributable to the issuer.

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