FINRA Gifts Rule Update: SEC Approves Increase to $300 Gift Limit

The SEC has approved a significant update to FINRA Rule 3220 (the Gifts Rule), increasing the annual gift limit from $100 to $300. This change is part of FINRA’s FINRA Forward rule-modernization-initiative and is intended to address a long-standing operational challenge faced by member firms in everyday business interactions.

FINRA will announce the official effective date of the updated rule in an upcoming regulatory notice. In the meantime, firms should begin evaluating how this change may impact their existing broker-dealer compliance programs and supervisory controls.

Overview of the FINRA Gifts Rule Increase

Under the revised rule, FINRA member firms may give gifts with an aggregate value of up to $300 per individual per year to employees of an institutional customer, vendor, or counterparty. This represents a meaningful increase from the prior $100 limit and reflects FINRA’s recognition that the previous threshold no longer aligned with modern business practices.

For firms navigating these updates, reviewing existing gifts and entertainment policies as part of broader broker-dealer compliance services can help ensure consistency with regulatory expectations once the rule becomes effective. 

Clarification: Gifts to Retail Customers Are Not Covered

In addition to raising the gift limit, the rule update clarifies that FINRA Rule 3220 does not apply to gifts given to individual retail customers. This clarification removes ambiguity that has historically caused confusion for member firms.

While other regulations and firm-specific standards may still apply, this update limits the scope of the FINRA Gifts Rule to institutional relationships. Firms may wish to assess whether their existing compliance manuals and written supervisory procedures accurately reflect this distinction.

Expanded Guidance on Valuation, Aggregation, and Supervision

The updated rule also addresses several operational and compliance considerations that are critical to administering gifts policies effectively, including:

• Valuation: Guidance on how gifts should be valued for purposes of determining compliance with the annual limit
• Aggregation: Clarification that gifts must be aggregated per individual recipient over the course of a calendar year
• Supervision: Reinforcement of the need for supervisory systems reasonably designed to ensure compliance
• Recordkeeping: Expectations for maintaining accurate and complete records of gifts

These elements align closely with broader expectations around supervisory oversight and may warrant coordination with a firm’s ongoing compliance support.

Codified Exceptions to the FINRA Gifts Rule

As part of the FINRA Forward modernization effort, FINRA has codified several exceptions that firms commonly rely on. These include exceptions for:

• Personal gifts based on a personal relationship
• Bereavement gifts
• Items of de minimis value
• Promotional or commemorative items
• Charitable donations related to federally declared major disasters

Codifying these exceptions provides firms with clearer regulatory backing and helps reduce uncertainty during regulatory examinations. Firms preparing for reviews may want to confirm that these exceptions are appropriately documented as part of their regulatory exam preparation.

What Member Firms Should Consider Next

Although the SEC has approved the changes, firms should wait for FINRA’s regulatory notice announcing the effective date before implementing updates. That said, now is an appropriate time to begin reviewing:

• Gifts and entertainment policies
• Written supervisory procedures
• Training materials for associated persons
• Gift tracking and recordkeeping systems

Proactively addressing these areas can help firms avoid last-minute updates and strengthen overall compliance readiness. Many firms choose to address these changes alongside broader reviews of FINRA compliance programs.

Aligning With FINRA Forward Rule Modernization

At Quadrant Regulatory Group, we monitor regulatory developments closely and help firms translate rule changes into practical, real-world compliance solutions.