SEC Approves FINRA Gift Limit Increase to $300
- Feb 18
- 3 min read
The U.S. Securities and Exchange Commission has just approved FINRA’s long-awaited proposal to raise the annual gift limit under FINRA Rule 3220 from $100 to $300 per person, per year. The $100 cap had been in place since 1992.
FINRA will announce the official implementation date in an upcoming Regulatory Notice, which we expect shortly.
For Britehorn representatives and other FINRA-registered professionals, this change modernizes a decades-old threshold — while also clarifying the compliance rules concerns that underpin the rule.
The Purpose of the Gifts Rule
FINRA has consistently emphasized that Rule 3220 is:
“Designed to avoid improprieties, such as conflicts of interest, that may arise when a member or associated person makes a gift to an employee of another person, such as an institutional customer, vendor, or counterparty with the hope of strengthening the business relationship with them.”
In other words, the rule is about preventing undue influence — not micromanaging social courtesy.
What Is Changing
The SEC-approved amendments include several key updates:
1. Annual Gift Limit Increased to $300
The annual limit per recipient increases from $100 to $300.
This amount is aggregated across all gifts given to that business-related individual during the calendar year.
2. FINRA Authority to Grant Exemptive Relief
FINRA will now have express authority to grant exemptive relief from the Gifts Rule in appropriate circumstances.
3. Codification of Existing Guidance
The rule formally incorporates long-standing interpretive guidance covering:
Gifts incidental to business entertainment
Valuation of gifts
Aggregation of gifts
Personal gifts
Bereavement gifts
De minimis gifts
Promotional or commemorative items
Donations in response to federally declared major disasters
Supervision and recordkeeping
Conforming updates to non-cash compensation rules
Much of this guidance already existed through Notices and interpretive letters; it is now embedded directly in the rule text.
Business Entertainment vs. Gifts
One area that frequently causes confusion is how to treat gifts given during business entertainment events.
Under the approved rule change:
A gift given during a business entertainment event is subject to the $300 annual limit,
unless it qualifies as:
A personal gift under proposed Rule 3220.04
A de minimis gift
A promotional or commemorative item under proposed Rule 3220.06
Importantly, the cost of the entertainment event itself does not count toward the $300 gift limit. Only the value of the tangible gift is counted.
This distinction preserves the longstanding separation between Rule 3220 (Gifts) and Rule 3220’s treatment of business entertainment.
Personal Gifts — Now Clearly Codified
The SEC-approved proposal explicitly codifies language around personal gifts.
The $300 annual maximum does not apply to:
“Gifts that are given for infrequent life events (e.g., a wedding gift or a congratulatory gift for the birth of a child),”
provided that such gifts are:
Customary and reasonable
Personal in nature
Not related to the business of the recipient’s employer
This clarification is helpful for associated persons who have longstanding personal relationships with counterparties or clients. The key analysis remains whether the gift is genuinely personal — not business-motivated.
De Minimis and Promotional/Commemorative Items
FINRA also codified its guidance regarding:
De Minimis Gifts
Items of nominal value that are not intended to influence a business relationship — for example, inexpensive tokens or hospitality-related items — are treated separately under the rule. These remain outside the traditional aggregation concerns when they truly qualify as de minimis.
Promotional or Commemorative Items
Promotional merchandise or commemorative items (such as branded pens, calendars, plaques, or similar low-value items) are addressed in proposed Rule 3220.06. These items are not treated the same as cash-equivalent or substantive gifts and are evaluated under their own standards.
A Modernized Threshold — Not a Relaxed Standard
The increase from $100 (a figure unchanged since 1992) to $300 reflects inflation and modern business realities.
However, the core objective of Rule 3220 remains unchanged. Preventing conflicts of interest and the appearance of impropriety in business relationships. As always, when in doubt, consult Compliance before providing any gift that could raise questions under Rule 3220.
We will circulate additional guidance to our representatives once FINRA issues its Regulatory Notice establishing the effective date.
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