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Zorluk: OrtaGifts, Gratuities, Political Contributions, and Outside Business Activities

An associated person of a FINRA member firm who attends an annual seminar hosted by a mutual fund sponsor may accept a $150 dinner provided by the host as ordinary business entertainment, provided a representative of the host is present and the entertainment is not preconditioned on achieving sales targets.

Cevap: Cevap

Cevap

True

The statement is true because hosted business entertainment—such as a dinner accompanied by representative personnel of the host—is exempt from FINRA's $100 annual gift restriction as long as it is reasonable in value and not conditional on sales performance.

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1

Identify the relevant regulatory rule governing gifts and entertainment.

FINRA Rule 3220 limits gifts given or received by associated persons in connection with securities business to $100 per recipient per year.

This rule prevents conflicts of interest and improper influence over associated persons.

2

Determine whether the hosted dinner qualifies as a gift or business entertainment.

Because a representative of the host is present, the meal is classified as business entertainment rather than an unconditional gift.

Host presence is the key factor that distinguishes exempt business entertainment from a gift subject to the $100 cap.

3

Verify if secondary criteria for business entertainment compliance are satisfied.

The entertainment is permissible because it is reasonable ($150) and not contingent on achieving sales targets.

Business entertainment must not be so lavish as to create a conflict of interest or be used to circumvent non-cash compensation rules.

Anahtar Kavram

FINRA Rule 3220 Business Entertainment Exception

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Konular

Gifts, Gratuities, Political Contributions, and Outside Business Activities