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FINRA Guidance on Gifts and Entertainment: Rule 3220

FINRA Guidance on Gifts and Entertainment: Rule 3220

 

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Full video transcript available below:

Hello, everyone, and welcome to today's webinar, hosted by me, Joe Boyhan of MCO and Jennifer Lin, Partner and Head of the Compliance Group at DLA. 

Today's webinar is titled, "Best Practices to Keep your Firm SEC and FINRA Compliant this Season." The slides and recording will be emailed to all registrants after the session. 

 

So moving on to the next slide, to cover some FINRA guidance on gifts and entertainment. As mentioned, under FINRA Rule 3220, persons making gifts and giving gratuities are subject to a $100 per year per person limit for those items given in relation to business of the recipient's employer. Whether or not a gift made is business related depends on several factors. That includes whether or not a pre-existing relationship existed between the associated person and the recipient and whether the associated person paid for the gift out of their own personal bank account without reimbursement from the firm. 

Additionally this limitation does not, without reimbursement from the firm, apply to life cycle events or to nominal or promotional items, provided that the nominal or promotional value still falls within the $100 limitation.

With respect to giving entertainment gifts, such as concert or sporting event tickets, these items will be considered a gift within the purview of the rule, if the giver, for example, the firm or an associated person, does not also attend the event. One of the key things on the broker dealer side is that certain recordkeeping and supervisory requirements also apply, so firms and associated persons should be sure to verify their requirements under FINRA Rule 3220, as well as the terms of the written supervisory procedures to ensure compliance. 

 

 

 

This webinar was co-hosted with www.dlallc.com

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