What Constitutes a Gift versus an Entertainment

What Constitutes a Gift versus Entertainment


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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." 

I thought it would be helpful to outline what some of the definitions are with respect to gifts and entertainment. 

Gifts include but are not limited to sporting or other tickets to sporting or other events. Things like candy, baskets, and flowers or promotional items. Essentially any situation where the giver does not accompany the recipient to the event. Entertainment refers to situations where the giver accompanies the recipient to an event. 

So common gifts and entertainment given during the holidays that often violate the gifts and entertainment rule and cause a potential conflict include the items mentioned above, sports tickets, gift cards, extravagant meals, bottles of wine. On the other hand, and I think that this is an important differentiator, is gifts of food and snacks that are sent to the office, that are shared among the staff, are generally deemed to be de minimis and therefore should not be put towards the policy itself. 

The risk of gift and entertainment conflicts can be managed by implementing adequate policies, procedures, and internal controls. Things such as pre-approval, reporting, certifications, and/or testing of this policy is a helpful way for you to manage any of these risks. 




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

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