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Question

Difficulty: EasyGifts, Gratuities, Political Contributions, and Outside Business Activities

Under FINRA Rule 3220 (Influencing or Rewarding Employees of Others), what is the maximum annual value of gifts or gratuities that an associated person of a member firm may give to an employee of another firm when the gift is given in relation to the securities business of the recipient's employer?

  1. $100 per recipient per yearAnswer
  2. B
    $250 per recipient per year
  3. C
    $500 per recipient per year
  4. D
    Unlimited, provided the firm provides written notification to the SEC prior to giving the gift

Answer

$100 per recipient per year
The correct answer specifies 100perrecipientperyear.UnderFINRARule3220,noassociatedpersonofamemberfirmmaygiveanygiftorgratuityexceeding100 per recipient per year. Under FINRA Rule 3220, no associated person of a member firm may give any gift or gratuity exceeding 100 per individual per year to an employee of another firm if the gift is related to the business of the recipient's employer.

Step-by-Step Solution

1
Identify the governing regulatory rule for gifts and gratuities.
FINRA Rule 3220 regulates gifts given by member firms and associated persons.
Associated persons must adhere to self-regulatory organization rules prohibiting excessive gift-giving that could create conflicts of interest.
2
Determine the maximum annual value threshold per recipient.
The strict limitation established by the rule is $100 per recipient per calendar year.
Unconditional gifts beyond $100 to employees of other firms are strictly prohibited when related to business activities.

Key Concept

FINRA Rule 3220 $100 Annual Gift Limit
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Topics

Gifts, Gratuities, Political Contributions, and Outside Business Activities