Under FINRA rules, a registered representative is permitted to host a client at an educati… — FINRA SIE (Securities Industry Essentials)

Under FINRA rules, a registered representative is permitted to host a client at an educational dinner costing $150 per person without violating the annual$ 100 gift limit, provided the representative personally attends the dinner with the client.

Answer: Answer

Answer

The statement is True.

The statement is true because FINRA Rule 3220 distinguishes standard gifts from business entertainment. When a registered representative accompanies a client to an event or dinner, the expense is categorized as business entertainment and is exempt from the annual $100 gift restriction.

Step-by-Step Solution

Analyze the scenario to determine if the expense is classified as a gift or business entertainment.

The registered representative personally attends the dinner with the client, which classifies the expense as business entertainment under FINRA Rule 3220.

An expense is considered an unconditional gift subject to the $100 limit only when the representative does not host or attend the event with the recipient.

Apply the FINRA Rule 3220 exception for business entertainment.

Because the representative is present, the

150 cost is exempt from the

100 gift limitation.

Normal business entertainment is allowable as long as it is not overly lavish and the representative accompanies the client.

Key Concept

FINRA Rule 3220 Business Entertainment Exception

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Step-by-Step Solution

Key Concept

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