Examkin

Soru

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

A registered representative purchases two professional hockey tickets valued at 140each(140 each ( 280 total) and mails them to an institutional trade desk manager at a client firm as a gesture of appreciation. The registered representative does not attend the game with the client. Under FINRA Rule 3220 (Gifts and Gratuities), which of the following statements correctly describes the compliance status of this action?

  1. The action constitutes a rule violation because unattended tickets are classified as a gift subject to the $100 annual limit per recipient.Cevap
  2. B
    The action is fully permissible because sporting event tickets are classified as business entertainment, which is completely exempt from gift limitations.
  3. C
    The action is permissible only if the representative submits prior written notice to FINRA and obtains explicit authorization before sending the tickets.
  4. D
    The action is permissible because the $100 limit applies strictly on a per-ticket basis rather than to the aggregate value of the gift.

Cevap

The action constitutes a rule violation because unattended tickets are classified as a gift subject to the $100 annual limit per recipient.
Under FINRA Rule 3220, member firms and associated persons are prohibited from giving anything of value in excess of 100perindividualperyeartoemployeesofotherfirmsinrelationtothebusinessoftheemployer.Althoughstandardbusinessentertainment(suchastakingacustomertodinnerorasportingevent)isexemptfromthe100 per individual per year to employees of other firms in relation to the business of the employer. Although standard business entertainment (such as taking a customer to dinner or a sporting event) is exempt from the 100 limit, this exemption strictly requires that the registered representative accompany the recipient. Because the representative did not attend the game, the total value of 280istreatedasagift,violatingthe280 is treated as a gift, violating the 100 limit.

Adım Adım Çözüm

1
Identify the relevant regulatory rule and core thresholds.
FINRA Rule 3220 restricts gifts and gratuities given by a registered representative to $100 per recipient per year.
Prevents improper influence and conflicts of interest when dealing with employees of other financial entities or clients.
2
Evaluate the distinction between a gift and business entertainment.
If the representative accompanies the client, the event is hosted business entertainment. If the representative does not attend, the full value of the tickets is classified as an unconditional gift.
Hosting requires representative attendance; non-attendance strips the business entertainment classification.
3
Calculate the total gift value and assess compliance.
Two tickets at 140eachequal140 each equal 280 total, exceeding the $100 annual gift threshold.
Since 280>280 > 100, sending unattended tickets is a clear violation of FINRA Rule 3220.

Anahtar Kavram

FINRA Rule 3220 Gift Limit vs. Business Entertainment Exception
Tahmini Süre:1m 0s
Bu soruyu puanla

Konular

Gifts, Gratuities, Political Contributions, and Outside Business Activities