The Financial Industry Regulatory Authority hopes to file with the Securities and Exchange Commission an update to FINRA Rule 3220, the Gifts Rule, to raise the limit "to catch up with inflation," Bob Colby, FINRA's chief legal officer, said Thursday at FINRA's annual meeting in Washington.
FINRA also plans to "codify the basic premise" that if a registered person gives a gift to a person that's a client of one of their clients, or an employee of one of their clients, but it's for personal reasons — like a wedding present — and it's paid for by the rep, not the firm, that doesn't come with any limit, Colby said.
The current gift limit has been in place since 1992, when the SEC approved an increase from $50 to $100.
The current rule, FINRA Rule 3220 (Influencing or Rewarding Employees of Others), "prohibits any member or person associated with a member, directly or indirectly, from giving anything of value in excess of $100 per year to any person where such payment is in relation to the business of the recipient’s employer."
The rule also requires members to keep separate records regarding gifts and gratuities.
The rule "seeks both to avoid improprieties that may arise when a member firm or its associated persons give anything of value to an employee of a customer or counterparty and to preserve an employee’s duty to act in the best interests of that customer," FINRA states.
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