New investors, new sources of information

Direct investment in domestic and foreign equities has increased sharply during the pandemic. At the same time, discussion on investing in social media has become more active. During the year, the FIN-FSA has communicated the rules of discussion on investing, which must also be complied with in social media.

Traditionally, information on investing has been sought, for example, in companies’ own sources, books and financial media. In addition, in recent years, growing social media discussion on investing has emerged on Twitter, Instagram, discussion forums and other social media channels.

At the beginning of 2021, a mass force of investors mobilised on the Reddit discussion forum in the United States sent the price of GameStop shares soaring, as Reddit users began to invest fervently in GameStop. Social media discussions are often characterised by invoking emotions, which also played a key role in this case: the discussions painted an impression of hedge funds as enemies of Reddit users and other common people.

The risk of making investment decisions based on incomplete information grows when the threshold to invest is lowered and investments are discussed in social media channels. In such an environment, new investors may be more readily drawn into topical investments without the necessary background checks and understanding of the investment case.

How are these changes viewed in the FIN-FSA?

From the FIN-FSA's perspective, there are two issues in particular that must be considered when it comes to the change in the culture of discussion on investments. Firstly, investment-related discourse takes place in an increasing number of channels. In recent years, the FIN-FSA has received more reports than before of suspicions of potential market abuse related to discussion on investments in social media. The rising number of reports increases the need for supervision work.

Another important concern is the quality of discussion on investments. The participants should bear in mind that discussion should always be as transparent as possible and based on public information. Anyone considering an investment should reflect on from whom or where it pays to take investment ideas: what are the true motives of so-called influencers and what is their expertise based on. It is important for investors to always bear in mind their own responsibility for investments and to examine the asset carefully before making an investment decision. During the year, the FIN-FSA has communicated on the ground rules for discussions on investing, which must also be complied with in social media.

The changes in the investment culture also have positive impacts, since transparency and the amount of information have increased. Digital services have made it easy to start investing, and the atmosphere surrounding investing is also very encouraging.

How should one behave on social media?

1.  Discuss with other investors in different social media channels based on public information and provide justifications for your views.
You contribute to market transparency, and particularly when it comes to smaller and less covered companies, you help increase awareness of them as potential investments.
2. Study the investment object as carefully as possible before making the final investment decision.
You will considerably reduce your risks of making an ill-advised and potentially loss-making investment. Ultimately, you are responsible for your own investment decisions.
3.  Remember source criticism – on social media, you can never know for certain what the other party’s true interests are.
You will considerably reduce your risks of making an ill-advised and potentially loss-making investment.
4.   Bear in mind that intentionally spreading misleading and incorrect information is forbidden.
If you see dissemination of misleading information on an investment on social media, you can report it to the FIN-FSA.
The issue can be investigated more thoroughly if the report contains adequately detailed information on the suspected action (what, where, when, who). You can attach, for example, screenshots of the discussion to the report.
The FIN-FSA may make a referral to the police on the social media comments if there are sufficient grounds to suspect market manipulation after FIN-FSA’s investigation of the matter.
Instructions on reporting suspected market abuse to the FIN-FSA: - FIN-FSA - Report suspected infringement