The Securities and Exchange Commission (SEC) has signed off on a FINRA plan that would raise value limits on gifts from $100 to $300 for registered advisors.
The approval was filed by the SEC on Wednesday in the Federal Register.
FINRA had first filed a proposed rule to the SEC in May, in which it suggested several amendments to FINRA Rule 3220.
According to FINRA, among the changes include “increase the gift limit from $100 to $300 per person per year; provide FINRA authority to grant exemptive relief from the Gifts Rule; and codify existing guidance regarding, among other things, gifts incidental to business entertainment, valuation of gifts, aggregation of gifts, personal gifts, bereavement gifts, de minimis gifts and promotional or commemorative items, donations due to federally declared major disasters, and supervision and recordkeeping, as well as make conforming changes to the gift limits in FINRA’s non-cash compensation rules.”
The proposed rule change also “requires members [of FINRA] to maintain separate records of all payments made or gratuities given in any amount known to the member pursuant to Exchange Act Rule 17a-4.”
According to FINRA, the rule is “designed to avoid improprieties, such as conflicts of interest, that may arise when a member or associated person makes a gift to an employee of another person, such as an institutional customer, vendor, or counterparty with the hope of strengthening the business relationship with them.”
The federal agency previously filed an extension on Dec. 2. and said it would give the SEC until February 12 to approve or shut down the increase.
FINRA had originally announced an increase to $250 to account for “past, and ‘some’ expected, future inflation,” but changed its course following feedback during the initial comment period.
The $100 gift limit has been in effect since 1992, when the SEC increased the cap from $50 to $100.