“Social trading” seeks inclusion, highlights regulatory grey area (Yahoo! Finance)

Retail investors relying on “social trading” platforms are looking for ways to level the playing field with hedge funds and other sophisticated money managers. While social trading seeks to benefit from the transparency of sharing ideas and digital engagement practices (DEP) via various platforms, for regulators it hinges on the question of what constitutes a recommendation for a trade. FrontLine’s Founder and President, Amy Lynch, comments that regulations could initially come in the form of required new disclosures when regulated entities and market participants are involved. However, Ms. Lynch states that there is a fine line in determining how investors are influenced by DEP, which creates a challenging situation for determining rule violations and needed regulatory measures. See Yahoo! Finance, “The rise of social trading: How the internet is changing investing”