The US Securities and Exchange Commission (SEC) approved amendments to FINRA’s Rule 3220 in February 2026, raising the annual gift limit from $100 to $300 per recipient — the first change to the rule since its introduction in 1992.
The amendments, which came into effect on 30 March 2026, go well beyond a simple threshold increase. FINRA has also codified decades of interpretive guidance, sharpened the scope of the rule, and introduced greater flexibility through exemptive relief, claims Star Compliance.
For compliance teams, the changes represent both an opportunity to modernise internal processes and a new set of operational challenges to address.
When FINRA first established the $100 gift limit, the intention was to prevent improper influence on employees of institutional clients, vendors, and counterparties. Over time, however, inflation steadily eroded the real-world value of that figure, rendering it increasingly out of step with everyday business costs.
The revised $300 threshold has been calibrated to account for both historical inflation and anticipated future cost increases, while preserving the rule’s original purpose: preventing conflicts of interest and inappropriate business influence. FINRA has been clear that the higher limit should not be read as a relaxation of compliance expectations.
From 30 March 2026, broker-dealers and associated persons may give up to $300 per year to a single recipient where the gift relates to the business of that recipient’s employer. Firms must continue to aggregate gifts to each recipient across the applicable reporting period and maintain detailed records.
While the increase may appear straightforward, the higher ceiling could, in practice, increase aggregation risk — smaller gifts that previously hit the limit quickly may now accumulate over a longer period before triggering scrutiny.
The amendment also introduces supplementary provisions that formalise prior FINRA guidance on a range of practical matters. These include how gifts are valued — non-ticket items at cost, event tickets at the higher of cost or face value — and the requirement to track all gifts to a single recipient across the entire firm. Certain categories, such as personal gifts tied to life events, bereavement gifts, and promotional or commemorative items, may fall outside the annual limit.
A further clarification concerns the rule’s scope. Rule 3220 applies to gifts given to employees of institutional clients, vendors, and counterparties, where there is potential for a gift to influence business decisions made on behalf of an employer. The amended rule confirms that it does not apply to gifts to individual retail customers or from a firm to its own employees.
Many firms had historically applied the $100 limit to retail customers as a matter of internal policy, and organisations may wish to reassess whether those voluntary restrictions remain appropriate in light of the change.
Despite the revision to the gift threshold, FINRA has not introduced a monetary cap for business entertainment. Meals, sporting events, and hospitality functions continue to be governed by a principles-based standard under which entertainment is permissible provided it is ordinary, usual, and not so frequent or extensive as to raise questions of propriety.
Classification, however, remains critical. Where a firm representative attends an event alongside a client, the activity is treated as entertainment. Where a ticket or invitation is provided without the host present, the item becomes a gift and must count towards the $300 annual limit. This accompanied-versus-unaccompanied distinction is among the most common sources of compliance errors identified during regulatory examinations.
The amended rule introduces several operational considerations that compliance teams will need to work through carefully.
Firm-wide aggregation remains one of the most significant practical challenges. Rule 3220 requires firms to track all gifts to a recipient across the organisation, including those provided by multiple employees or departments interacting with the same institutional contact. Manual processes often struggle to maintain accurate cumulative totals at scale.
Independent classification is another area of focus. The rule reinforces that the employee submitting a gift for approval should not be the one determining whether it falls within the rule’s scope. Classification and compliance review must sit within supervisory processes that are independent of the individual submitting the request.
Firms must also contend with a broader regulatory landscape. FINRA’s update does not affect other overlapping regimes, including MSRB Rule G-20, ERISA fiduciary requirements, state and local gift laws, and SEC pay-to-play rules. Managing these multiple frameworks increases the importance of centralised monitoring and consistent policy enforcement.
As firms revise their policies and supervisory procedures, many are looking afresh at the systems used to manage gifts and entertainment activity. Manual spreadsheets and decentralised approval processes make it difficult to enforce aggregation requirements, maintain audit-ready records, and surface potential conflicts in a timely way.
A separate challenge involves reconciling pre-approved gift requests with expense reporting systems. Employees may submit expense reports that differ from originally approved amounts, creating gaps in gift tracking and cumulative totals.
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