Under FINRA Rule 3220, a registered representative who gives a client two concert tickets … — FINRA SIE (Securities Industry Essentials)

Under FINRA Rule 3220, a registered representative who gives a client two concert tickets valued at $80 each ($ 160 total) without attending the concert with the client has exceeded the annual gift limit of $100 per recipient.

Answer: Answer

Answer

True. Because the representative does not attend the concert with the client, the tickets are categorized as a gift rather than business entertainment, making the

160 total value a violation of FINRA Rule 3220's

100 annual limit per recipient.

The statement is true. Under FINRA Rule 3220, tickets to sporting or cultural events given to clients are considered gifts subject to the

100 annual limit unless the registered representative attends the event with the client. When the representative does not attend, the tickets are treated as a direct gift, and a total value of

160 violates the $100 ceiling.

Step-by-Step Solution

Determine the rule and basic threshold

FINRA Rule 3220 limits gifts given by a registered representative to a customer or business contact to $100 per recipient per calendar year.

To prevent improper influence or compensation to employees of other firms or customers.

Evaluate the attendance condition for event tickets

If the representative accompanies the client, it is classified as business entertainment (exempt from the $100 gift limit). If the representative does not attend, it is classified as a gift.

Business entertainment requires personal interaction and hosting by the associated person.

Calculate ticket value against the gift limit

The total gift value is

160 (

80 × 2), which exceeds the $100 limit.

Since the representative is not attending, the full

160 counts toward the

100 annual gift limit, creating a rule violation.

Key Concept

FINRA Rule 3220 $100 Gift Limit vs. Business Entertainment Exemption

Question

Answer

Step-by-Step Solution

Key Concept

Common Mistakes

Topics