As we enter the holiday season, let’sgift-1420683 review the FINRA Rule (3220) on gifts and gratuities. To make sure no one improperly influences or rewards others, FINRA draws a bright line distinction and simply prohibits any business gifts or gratuities in excess of one hundred dollars per individual per year.

Permissible and Prohibited Gifts

Vanessa, a registered rep, wants to send her clients a holiday gift. It would be permissible for her to send gifts to each of her clients provided no single client receives anything of more than $100 in value.

Example:

  1. One $99.00 bottle of wine: Permissible
  2. Two $75.00 tickets to a sporting event: Not permissible (since total value is $150)

What is not considered a gift?

  1. Vanessa takes clients to a $250, fixed-price dinner. Because Vanessa attends, this is not considered a gift and is permissible
  2. Vanessa takes clients to a professional sporting event where the tickets each cost $150. This is permissible provided Vanessa also attends.

By Vanessa attending the two events above, these are not considered gifts, and therefore not subject to the $100 limitation.

Knopman Note

Being familiar with the rules on gifts and gratuities is an important part of your preparation for your FINRA exam. Be sure to have a firm grasp on these rules if you are preparing for the Series 7, Series 79, or Series 24.

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Written by Dave Meshkov
Dave's mission (and job: Managing Director of Course Design) is to make FINRA exam training engaging, approachable, and dare he even say, enjoyable. Having trained and coached over ten thousand students to exam success he knows how to present complex subjects in memorable and understandable ways. Prior to joining Knopman Marks in 2011, Dave practiced bankruptcy law at Weil, Gotshal & Manages and served as a law clerk in a the Southern District of New York Bankruptcy Court working on the General Motors and Lehman Brothers bankruptcies. Building on his legal expertise and training allows him to keep all our courses updated with the latest legislative and rule-making changes. Dave currently trains for the Securities Industry Essentials (SIE) exam and the Top-Off Series 6, 7, 24, 57, 63, 65, 66, 79, 86, 87, and 99 exams. He also delivers executive one-on-one training and shares his passion for learning outside of work as a ski instructor and yoga teacher. Dave graduated magna cum laude from Fordham Law School, and cum laude with a BA from the University of Pennsylvania.