FINRA Rule 3220: $300 Gift Limit, Exceptions, and Recordkeeping

FINRA Rule 3220 caps business-related gifts at $300 per person per year, a limit that took effect on March 30, 2026, tripling the longstanding $100 ceiling. The rule applies when a member firm or an associated person gives something of value to an employee of another organization in connection with that employer’s business. Firms that exceed the cap, keep sloppy records, or treat gifts as entertainment without meeting the hosting requirements face fines, suspensions, and in serious cases industry bars.

What the $300 Limit Covers

No member firm or associated person may give anything of value exceeding $300 per individual per year to any person where the payment relates to the business of the recipient’s employer.¹ The $300 is an aggregate ceiling, not a per-gift cap. A $150 holiday basket in December and a $200 bottle of wine in March to the same person has already breached the limit.

The rule’s reach is narrower than many assume. It covers gifts tied to the recipient’s employer’s business: a portfolio manager at a fund the firm trades with, a research analyst at another broker-dealer, a trader at a counterparty. Two common situations fall entirely outside Rule 3220: gifts from a firm to its own employees, and gifts from a firm or its representatives to individual retail customers.² Those may raise other compliance questions, but not under this rule.

How to Value a Gift

Most gifts are valued at what the firm actually paid, excluding tax and delivery. A basket that cost $120 before $15 shipping counts as $120 against the limit.

Tickets to sporting events and similar events use a different measure: the higher of cost or face value.² A $75 face-value concert ticket bought for $250 on a resale site counts as $250. A $400 face-value ticket bought at a $200 corporate discount counts as $400.

When one gift goes to several named recipients, such as a fruit arrangement sent to a shared office, the firm records each recipient’s name and allocates value pro rata.² A $150 arrangement split among five people is $30 each.

Aggregation Across the Firm

Firms must aggregate every gift given by the firm and every associated person to a particular recipient over the course of a year. If one broker sends $200 and a colleague sends $150 to the same person, the firm has blown the limit for that recipient even though neither gift did so on its own. The firm’s written procedures must state whether aggregation runs on a calendar year, a fiscal year, or a rolling basis starting from the first gift to any recipient.² Without centralized tracking, independent reps can push a recipient over the ceiling without either one knowing.

Business Entertainment Is Separate

Ordinary business entertainment, such as a dinner, a ball game, or a theater outing, does not count toward the $300 gift limit if a representative of the member firm personally hosts the event.³ Hosting means attending throughout and interacting with the guests. Handing someone two tickets and telling them to enjoy the game is a gift, and the full cost counts.

Even with a host present, entertainment cannot be so frequent or extravagant that it raises questions of propriety, and it cannot be conditioned on hitting a sales target.⁴ FINRA draws no bright line on “extravagant.” A steak dinner is fine. A chartered weekend yacht trip probably is not. The test is whether a reasonable observer would see relationship-building or purchased influence.

Gifts Handed Out During an Event

If you hand a gift to a guest during a hosted dinner or outing, the entertainment stays outside the $300 limit, but the gift itself does not. A branded watch given as a door prize counts toward the recipient’s annual total unless it qualifies as a de minimis or promotional item.²

Virtual Entertainment

FINRA extended the entertainment framework to virtual settings with strict hosting conditions. The associated person must control who participates, interact with each attendee during the event, and remain present and visible throughout, which can include appearing on video alongside the entertainment. Food and beverages sent to participants for a virtual meeting can qualify as entertainment under these conditions, but the firm cannot bundle gift cards or other non-food items into the delivery.³

Gifts That Sit Outside the Limit

Several categories of gifts fall entirely outside Rule 3220’s ceiling and recordkeeping requirements. Classifying a business gift into one of these buckets incorrectly is a quick way to attract examiner attention.

Personal Gifts for Life Events

Customary and reasonable gifts tied to infrequent life events, such as a wedding or the birth of a child, are exempt from the dollar limit and recordkeeping requirements if they are genuinely personal and unconnected to the recipient’s employer’s business.¹ FINRA presumes the gift is business-related when the member firm bears the cost, either paying directly or reimbursing the representative.² A wedding gift expensed to the firm counts toward the $300 limit. The personal-gift exception works only when the representative pays out of pocket.

Bereavement Gifts

Customary and reasonable bereavement gifts, such as flowers or a food delivery to a grieving family, are treated as not being in relation to the recipient’s employer’s business. They sit outside the limit and the recordkeeping requirements, and the personal-funds restriction that applies to life-event gifts does not apply here.¹

Disaster Relief Donations

Donations to help someone who suffered losses in a federally declared major disaster are exempt from the gift limit and recordkeeping requirements. FINRA does not treat them as being in relation to the recipient’s employer’s business.¹

De Minimis, Promotional, and Commemorative Items

Small items such as pens, notepads, and modest desk ornaments fall below the de minimis threshold. Logo-branded promotional items of nominal value, such as umbrellas, tote bags, and shirts, are exempt as long as their value is substantially below the $300 limit. Customary commemorative pieces marking a business transaction, like a Lucite tombstone for a closed deal, also sit outside the limit.² None of these require gift-log entries.

Non-Cash Compensation for Specific Products

FINRA’s non-cash compensation rules under Rules 2310 (direct participation programs and REITs), 2320 (variable contracts), 2341 (investment company securities), and 5110 (corporate financing) impose separate restrictions on gifts and incentives tied to selling those products. These rules were updated alongside Rule 3220, with their gift limits also moving from $100 to $300.⁵

These product rules go further than Rule 3220. They prohibit most forms of non-cash compensation beyond narrow exceptions for gifts under $300, business entertainment, training and education meetings, and certain internal firm arrangements. Product sponsors cannot offer trips, prizes, or merchandise to incentivize sales. Internal firm contests are permitted only if based on total production with equal weighting across product types; a contest that rewards selling Fund A more than Fund B is not allowed.⁴

Regulation Best Interest adds a further overlay. Broker-dealers must identify and eliminate sales contests, quotas, bonuses, or non-cash compensation tied to selling specific securities or types of securities within a limited time period.⁴ Any non-cash compensation arrangement needs to be measured against both the FINRA rules and Reg BI’s conflict-of-interest requirements.

Recordkeeping and Supervision

Every business-related gift must be logged with the date, a description, the value, the recipient’s name, and the recipient’s firm. Under Rule 4511, records without a separately specified retention period must be preserved for at least six years.⁶

Supervision requirements under the amended rule are more prescriptive than the prior version. Firms must have systems reasonably designed to ensure gifts are reported, reviewed for compliance, and preserved in records. The person giving the gift cannot be the one who decides whether it qualifies as business-related; that determination belongs to a compliance or supervisory function.¹ Firms also need internal monitoring that flags recipients approaching the annual ceiling. Waiting until the limit is breached before anyone notices is not a defensible supervisory system.

Incomplete or misleading gift records tend to trigger examinations that reach beyond the gift rule. If the gift log looks sloppy, examiners start asking what else the firm is not tracking.

What Happens When a Firm Violates the Rule

FINRA can impose fines, suspensions, and in the most serious cases permanent industry bars for gift-rule violations. The Sanction Guidelines direct adjudicators to weigh factors including whether the violation was intentional, how long it lasted, and whether the firm profited.⁷

Self-reporting and early cooperation can meaningfully reduce penalties. The guidelines list accepting responsibility before detection, voluntarily implementing corrective procedures, attempting restitution, and providing substantial assistance to FINRA’s investigation as mitigating factors. Delaying an investigation, concealing information, or giving misleading testimony pushes sanctions in the opposite direction.⁷ If a firm identifies a Rule 3220 breach internally, bringing it to FINRA almost always produces a better outcome than being found out.

1
FINRA. FINRA Rule 3220 – Influencing or Rewarding Employees of Others
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FINRA. Regulatory Notice 26-05 – FINRA Adopts Amendments to Rule 3220
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FINRA. Gifts, Gratuities and Non-Cash Compensation FAQs
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FINRA. Gifts, Gratuities and Non-Cash Compensation
5
Federal Register. Order Approving a Proposed Rule Change – FINRA Rule 3220 Amendments
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FINRA. FINRA Rule 4511 – General Requirements
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FINRA. FINRA Sanction Guidelines