FINRA Proposes to Update the Gift Rule

On June 4, 2025 FINRA’s weekly email announced that it has filed with the SEC a proposal to change Rule 3220 (the Gifts Rule) governing gifts and gratuities. While much of the proposed rule is either a clarification or codification of existing requirements, the proposal does increase the dollar value that can be given as gifts.

FINRA Rule 3220 Update: Key Takeaways

The core rule remains unchanged

It prohibits members and their associated persons from giving anything of value, directly or indirectly, in excess of a certain dollar amount to any person where such payment or gift is in relation to the business of the recipient’s employer.

Increased Gift Limit

The proposal increases the dollar value of gifts that can be given from $100 to $250 per recipient per year.

Clarified Scope of Applicability

FINRA clarifies that the rule does not apply to gifts given by FINRA member firms to its own associated persons or to gifts given to individual retail clients. 

Codification of Exclusions

The proposal codifies earlier guidance stating that personal gifts, de minimis gifts, promotional and commemorative items are excluded from the rule requirements.

Entertainment Gifts Included

FINRA clarifies that gifts given at entertainment events are subject to the gift rule, and therefore subject to the $250 limit unless it is otherwise exempt (e.g., de minimis, promotional, etc.).

Event Ticket Valuation Revised

The proposal would require that tickets to events be valued at cost (exclusive of tax and delivery charges). This changes the current guidance, which requires they be valued at the higher of cost or market.

De Minimis Threshold Updated

The proposal states that the value of de minimis gifts and promotional items must be substantially below $250. 

Disaster Relief Donations Excluded

The proposal codifies guidance that donations to any person to provide assistance to the individual for losses sustained in a natural event that the President has declared a major disaster would not be considered “in relation to the member’s business” and thus not subject to the Gift Rule.

Procedural Expectations Maintained

Firms will continue to be expected to have reasonably designed procedures for complying with the rule. The procedures must be designed to ensure that covered gifts are (a) reported to the firm, (b) reviewed for compliance, and (c) maintained in the firm’s records. 

Separation of Duties Required

The firm’s procedures must ensure that the person responsible for determining whether a gift is in relation to the business of the recipient’s employer is not the person giving the gift.

Time to Enhance Supervisory Systems

While FINRA’s proposed updates to Rule 3220 modernize certain aspects—such as increasing the gift limit and clarifying exclusions—the core principles remain the same: firms must maintain strong controls and clear procedures to prevent gifts from creating conflicts of interest or regulatory exposure. With the proposed changes introducing nuanced distinctions and documentation expectations, now is the time for firms to review and enhance their supervisory systems.

Partnering with Oyster for Compliance Success

Oyster Consulting’s compliance experts can help your firm assess current gift and entertainment policies, implement effective supervisory procedures, and ensure compliance with evolving FINRA requirements. Whether you need a policy refresh or a comprehensive program review, we provide practical, regulatory-aligned solutions tailored to your business.