BDA today filed with the SEC a letter in support of proposed amendments to FINRA’s “gifts rule.” We told FINRA “BDA supports FINRA’s proposal to raise the annual gift limit from $100 to $250. This increase is sensible and necessary, reflects decades of inflation, and aligns the rule more closely with actual business practices.”
FINRA has proposed to amend their Rule 3220, which restricts the ability of dealers and their employees to provide gifts, gratuities or other items of value to institutional customers. The annual limit on the value of gifts to any one customer would increase from $100 to $250 under the FINRA proposal. The initiative would also codify some guidance around the gifts rule. BDA urged FINRA to modernize its gifts rule in a letter on their retrospective rule review earlier this year.
BDA raised several remaining concerns with respect to Rule 3220. We asked FINRA, for example, to “in the future provide clear and formal clarification regarding the treatment of business entertainment under the rule.” We also asked for attention to issues such as the definition of retail investor under the Rule and treatment of gifts received by FINRA members, which are outside the scope of the Rule.
BDA’s gifts rule letter is available here. Thanks to all who contributed to this project. Please call or write if you have any questions.