New notice warns paid posts and copy trading can trigger registration and enforcement
A viral TikTok clip that says a stock is a “golden opportunity” might now put both the finfluencer and a dealer in regulators’ crosshairs.
Canadian securities regulators have released Joint Staff Notice 31‑369 to clarify when social‑media “finfluencer” activity crosses into regulated advice, trading or promotion – and what that means for registrants and issuers that use them.
The message is blunt: existing securities rules already apply, and regulators are monitoring.
When a post becomes “advice” or “trading”
The Notice says “advice” includes opinions or recommendations about investing in a business or its securities.
Even emojis or hype like “not to be missed” or “golden opportunity” can be treated as investment recommendations, while purely factual explanations of how markets work are not.
“Trading” extends beyond order execution to “any act, advertisement, solicitation, conduct or negotiation directly or indirectly in furtherance of” a sale of a security.
That can capture copy‑trading, where a finfluencer links subscribers to a DIY account that mirrors their trades.
If someone provides advice or engages in trading “for a business purpose,” registration is required.
Regulators look at: repetition and regularity, expectation of compensation, holding out as being in the business, intermediating trades and contacting people to solicit transactions.
A disclaimer that “this is not advice” does not avoid registration.
The narrow comfort of “general advice”
The most relevant carve‑out is the “general advice” exemption.
A finfluencer who gives non‑tailored guidance to a broad audience may not need to register as an adviser.
That relief comes with a key condition: they must disclose any “financial or other interest” in securities they mention.
That covers direct and indirect incentives, including interests held by certain associates. There is no equivalent exemption for trading or acts in furtherance of a trade.
Once a finfluencer starts answering individual questions, recommending specific securities for specific people, or charging for personalised calls, they move off “general advice” and into registerable business.
Paid promotion, referral risk and IR lines
The Notice zeroes in on paid promotion:
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If a finfluencer receives any form of payment to market a registered dealer or adviser, the relationship may be a referral arrangement subject to National Instrument 31‑103 and CIRO rules.
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If they are paid to promote particular securities or undertake investor relations‑type work, they may be acting on behalf of an issuer or registrant, triggering distribution and IR requirements.
Regulators have already sanctioned finfluencers who promoted stocks for issuers without “clear and conspicuous” disclosure that posts were sponsored. Ignorance of the law did not help them.
What “clear and conspicuous” looks like
For finfluencers relying on the general advice exemption or doing paid promotion, the Notice expects:
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specific disclosure of the security, the nature of compensation, who pays and who receives it
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placement where audiences will connect it with the advice or promotion – typically at the start of a video or post
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prominence in the relevant format
A catch‑all line like “I may have a financial interest in some of the securities that I mention” is not enough.
Burying sponsorship details behind a “show more” link or in dense, confusing language also fails the test.
Expectations for registered firms
For wealth firms, the practical risk is not just what finfluencers do, but what regulators may attribute to the firm.
The Notice expects registrants that engage finfluencers to:
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perform due diligence before engagement
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use written agreements that spell out roles, responsibilities and referral terms
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ensure finfluencers describe the firm and its products in a fair, balanced, substantiated and non‑misleading way
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monitor content and correct anything that crosses into recommendations, exaggerates benefits or downplays risks
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train staff on permitted interactions and watch for unapproved activity on the firm’s behalf
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identify, disclose and address material conflicts in the client’s best interest
Order‑execution‑only dealers face an extra constraint: they cannot make recommendations.
They must ensure that links, hosted third‑party content or copy‑trading functionality do not amount to indirect recommendations or facilitation of unregistered advice.
Expectations for issuers
Issuers that hire finfluencers to drum up interest in their securities must treat social‑media content as part of their public disclosure footprint.
Regulators expect issuers to:
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keep content factual and balanced, without misrepresentations or activity that creates a misleading appearance of trading or an artificial price
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avoid selective disclosure of forward‑looking information
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ensure payment for promotional relationships is prominent
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prevent fraudulent or deceptive practices by their promotional partners
Enforcement risk is real
CSA and CIRO staff say they monitor finfluencer activity with domestic and international partners.
Where they find breaches, they can bring enforcement proceedings before administrative tribunals.
Potential outcomes include large fines, cost orders, disgorgement of profits and bans from working in the securities industry.
The Notice effectively sets a checklist: draw a hard line around advice and trading, document and supervise every finfluencer relationship, and treat paid posts as regulated communications – not just clever content.
