FINRA Adopts Amendments to Rule 3220 (Influencing or Rewarding Employees of Others)

Regulatory Notice 26-05

Published Date:

February 27, 2026

Effective Date: March 30, 2026

Summary

As part of the FINRA Forward initiative, FINRA has adopted amendments to FINRA Rule 3220 (Influencing or Rewarding Employees of Others) to increase the gift limit from $100 to $300 per person per year; incorporate and substantially codify current guidance and interpretations; and provide for exemptive relief. FINRA has also adopted conforming amendments to raise the gift limit to $300 in Rule 2310 (Direct Participation Programs), Rule 2320 (Variable Contracts of an Insurance Company), Rule 2341 (Investment Company Securities) and Rule 5110 (Corporate Financing Rule – Underwriting Terms and Arrangements). These amendments represent a significant step toward modernizing the rules, while codifying existing guidance in a manner that will promote efficiency without reducing protection for investors.

The text of the rule change is set forth in Attachment A.

Questions concerning this Notice should be directed to:

• Victoria Crane, Vice President and Associate General Counsel, Office of General Counsel (OGC), by [email](javascript:email(1576,'Victoria Crane');) or (202) 728-8104;
• Joseph Savage, Vice President and Associate General Counsel, OGC, by [email](javascript:email(1011,'Joseph Savage');) or (240) 386-4534; or
• Ilana Herscovitz Reid, Associate General Counsel, OGC, by [email](javascript:email(2239,'Ilana Herscovitz Reid');) or (202) 728-8268.

Background & Discussion

The amendments to FINRA Rule 3220 (the “Gifts Rule”) are part of the FINRA Forward initiative, which is intended to modernize FINRA’s rules, guidance and processes, and empower member compliance.1 The Gifts Rule prohibits any member or person associated with a member, directly or indirectly, from giving anything of value in excess of a specified dollar limit per year to any person where such payment is in relation to the business of the recipient’s employer.2 The rule seeks to avoid improprieties, such as conflicts of interest, that may arise when a member or an associated person gives items of value to an employee of another person, such as an institutional customer, vendor or counterparty (“Institutional Customer”) with the hope of strengthening the business relationship with the Institutional Customer. The Gifts Rule does not apply to gifts from a member or its associated persons to individuals who are not employees of an Institutional Customer, including individual retail customers.

Informed by feedback from commenters,3 FINRA has amended the Gifts Rule to increase the gift limit; incorporate and substantially codify current guidance and interpretations; and provide for exemptive relief.4

Key Changes

1. Increased Gift Limit to $300

FINRA has increased the gift limit from $100 to $300 per person per year. This responds to past and ongoing inflation, including the inflation since the gift limit was last raised in 1992.5 A $300 gift limit should account for ongoing inflation at current levels for approximately 10 years, thereby reducing the frequency of future upward adjustments to account for inflation. FINRA intends to review periodically the gift limit to determine if further increases are warranted.

2. Supplementary Material

FINRA has adopted new supplementary material that incorporates and substantially codifies existing guidance and interpretations.6 As discussed in more detail below, the supplementary material clarifies that the Gifts Rule does not apply to gifts from a member to its own associated persons or to individual retail customers; addresses valuation, aggregation, supervision and recordkeeping requirements; and codifies several exceptions for which the gift limit and recordkeeping requirements in the Gifts Rule do not apply.

• Gifts Incidental to Business Entertainment—Rule 3220.01 provides that a gift given during the course of a business entertainment event is subject to the $300 gift limit, unless it is a personal gift or of de minimis value or a promotional or commemorative item. Although gifts given incidental to a business entertainment event are subject to the $300 gift limit, the cost of the business entertainment event itself would not be included in the value of the gift.
• Valuation of Gifts—Rule 3220.02 requires that gifts (other than tickets to sporting or other events) be valued at cost, exclusive of tax and delivery charges. When valuing tickets to sporting or other events, the member must use the higher of cost or face value. FINRA believes it is appropriate to distinguish tickets to sporting or other events from other gifts because such tickets are commonly purchased on secondary markets at a cost that is different from the face value of the ticket, and the face value of tickets is typically readily determinable. If gifts are given to multiple recipients, members should record the names of each recipient and calculate and record the value of the gift on a pro rata per recipient basis.
• Aggregation of Gifts—Rule 3220.03 requires members to aggregate all gifts given by the member and each associated person of the member to a particular recipient over the course of the year for purposes of ensuring compliance with the $300 gift limit. In addition, each member must state in its procedures whether it is aggregating all gifts given by the member and its associated persons on a calendar year, fiscal year or on a rolling basis beginning with the first gift to any particular recipient. The purpose of the aggregation requirement is to assure that the value of multiple gifts given throughout a year to a particular recipient does not exceed the gift limit. The aggregation requirement does not apply to de minimis, promotional, commemorative or personal gifts, as these gifts are not subject to the gift limit.
• Personal Gifts—Rule 3220.04 provides that gifts given for infrequent life events (e.g., a wedding gift or a congratulatory gift for the birth of a child) are not subject to the $300 gift limit or the recordkeeping requirements of the Gifts Rule,7 provided that the gifts are customary and reasonable, personal in nature, and not in relation to the business of the employer of the recipient. In determining whether a gift is “personal in nature and not in relation to the business of the employer of the recipient,” members should consider a number of factors, including the nature of any pre-existing personal or family relationship between the person giving the gift and the recipient, and whether the associated person paid for the gift. When the member bears the cost of the gift, either directly or by reimbursing an associated person, FINRA presumes that such gift is not personal in nature and instead is in relation to the business of the employer of the recipient.
• Bereavement Gifts—Rule 3220.05 provides that customary and reasonable bereavement gifts are not considered to be in relation to the business of the employer of the recipient. Bereavement gifts are therefore not subject to the $300 gift limit or the recordkeeping requirements of the Gifts Rule.
• De MinimisGifts and Promotional Items—Rule 3220.06(a) provides that gifts of a de minimis value (e.g., pens, notepads, modest desk ornaments) or promotional items of nominal value that display the member’s logo (e.g., umbrellas, tote bags, shirts) are not subject to the $300 gift limit or the recordkeeping requirements of the Gifts Rule. The value of a de minimis gift or promotional item must be substantially below the $300 limit. Gifts valued in amounts above or near $300 would not be considered nominal.
• Commemorative Items—Rule 3220.06(b) provides that customary and reasonable solely decorative items commemorating a business transaction are not subject to the $300 gift limit or the recordkeeping requirements of the Gifts Rule. Such solely decorative items commemorating a business transaction are excluded from the requirements of the Gifts Rule even if such items cost more than $300.
• Donations Due to Federally Declared Major Disasters—Rule 3220.07 provides that donations by a member or an associated person to any person, principal, proprietor, employee, agent or representative of another person to provide assistance to the individual for losses sustained in a natural event that the president has declared to be a major disaster, such as a wildfire, hurricane, tornado, earthquake or flood, are not considered to be in relation to the business of the employer of the recipient. Thus, such donations are not subject to the $300 gift limit or the recordkeeping requirements of the Gifts Rule.
• Supervision and Recordkeeping—Rule 3220.08 provides that to have a supervisory system reasonably designed to achieve compliance with the Gifts Rule, members are required to have systems and procedures reasonably designed to ensure that payments and gratuities in relation to the business of the employer of the recipient given by the member and its associated persons to employees of another person are: (i) reported to the member; (ii) reviewed for compliance with the Gifts Rule; and (iii) maintained in the member’s records. Such procedures must be reasonably designed to ensure that an associated person who is giving a payment or gratuity is not responsible for determining whether such payment or gratuity is in relation to the business of the recipient’s employer. Rule 3220.08 also makes explicit that the recordkeeping requirements of the Gifts Rule do not apply to gifts that are excluded from the restrictions of the rule (i.e., personal gifts, bereavement gifts, de minimis gifts, promotional or commemorative items, or donations due to federally declared major disasters).8
• Gifts to a Member’s Associated Persons or Individual Retail Customers—Rule 3220.09 makes clear that the Gifts Rule does not apply to gifts from a member to its own associated persons, or to gifts from a member or an associated person to individual retail customers.9

3. Exemptive Relief

The amendments also authorize FINRA staff to grant exemptions from the Gifts Rule for good cause shown.10

Effective Date

The amendments will become effective on March 30, 2026.

Endnotes

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1 See FINRA Announces New “FINRA Forward” Initiatives to Support Members, Markets and Investors (April 21, 2025).

2 The term “anything of value” is broad and includes both cash and non-cash compensation. It would not, however, include intangible items such as an associated person’s time.

3 See Regulatory Notice 16-29 (August 2016); see alsoRegulatory Notice 25-04 (March 2025).

4 See Securities Exchange Act Release No. 104830 (February 12, 2026), 91 FR 7570 (February 18, 2026) (Order Approving File No. SR-FINRA-2025-003).

5 FINRA used the annual rate of inflation data for the United States from the Federal Reserve Bank of St. Louis website to estimate the change in consumer prices since 1992.

6 By incorporating and substantially codifying existing guidance and interpretations, the amendments supersede such guidance and interpretations. See, e.g., Notice to Members 06-69 (December 2006).

7 See Rule 3220(c).

8 Although recordkeeping is not required for excluded gifts, members may determine to implement a recordkeeping requirement for such gifts as part of their supervisory system to achieve compliance with the Gifts Rule. FINRA recognizes that there are a variety of methods for ensuring compliance with the Gifts Rule. Members should implement a reasonable process for assessing their individual needs and business models to determine systems and procedures that are reasonably designed to achieve compliance with the Gifts Rule.

9 Members may have policies and procedures that restrict or prohibit gifts to individual retail customers.

10 See Rule 3220(d).

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Attachment A
New language is underlined; deletions are in brackets.

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FINRA Rules

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2300. SPECIAL PRODUCTS
2310. Direct Participation Programs
(a) through (b) No Change.
(c) Non-Cash Compensation
(1) No Change.
(2) Restriction on Non-Cash Compensation
In connection with the sale and distribution of direct participation program or REIT securities, no member or person associated with a member shall directly or indirectly accept or make payments or offers of payments of any non-cash compensation, except as provided below. Non-cash compensation arrangements must be consistent with the applicable requirements of SEA Rule 15l-1 (“Regulation Best Interest”) and are limited to the following:
(A) Gifts that do not exceed an annual amount per person fixed periodically by the Board of Governors1 and are not conditioned on achievement of a sales target. (B) through (E) No Change. (d) No Change. 1 The current annual amount fixed by the Board of Governors is $300[100].

2320. Variable Contracts of an Insurance Company
(a) through (f) No Change.
(g) Member Compensation
In connection with the sale and distribution of variable contracts:
(1) through (3) No Change.
(4) No member or person associated with a member shall directly or indirectly accept or make payments or offers of payments of any non-cash compensation, except as provided below. Notwithstanding the provisions of paragraph (g)(1), the following non-cash compensation arrangements are permitted provided that they are consistent with the applicable requirements of SEA Rule 15l-1 (“Regulation Best Interest”):
(A) Gifts that do not exceed an annual amount per person fixed periodically by FINRA1 and are not preconditioned on achievement of a sales target. (B) through (E) No Change.

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2341. Investment Company Securities
(a) through (k) No Change.
(l) Member Compensation
In connection with the sale and distribution of investment company securities:
(1) through (4) No Change.
1
The current annual amount fixed by the Board of Governors is $300[100].

(5) No member or person associated with a member shall directly or indirectly accept or make payments or offers of payments of any non-cash compensation, except as provided below. Notwithstanding the provisions of paragraph (l)(1), the following non-cash compensation arrangements are permitted provided that they are consistent with the applicable requirements of SEA Rule 15l-1 (“Regulation Best Interest”):
(A) Gifts that do not exceed an annual amount per person fixed periodically by FINRA1 and are not preconditioned on achievement of a sales target. (B) through (E) No Change. (m) through (n) No Change.

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3200. RESPONSIBILITIES RELATING TO ASSOCIATED PERSONS

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3220. Influencing or Rewarding Employees of Others
(a) No member or person associated with a member shall, directly or indirectly, give or permit to be given anything of value, including gratuities, in excess of [one hundred dollars] $300 per individual per year to any person, principal, proprietor, employee, agent or representative of another person where such payment or gratuity is in relation to the business of the employer of the recipient of the payment or gratuity. A gift of any kind is considered a gratuity. 1 The current annual amount fixed by the Board of Governors is $300[100].

(b) This Rule shall not apply to contracts of employment with or [to] compensation for services rendered by persons enumerated in paragraph (a) of this Rule provided that there is in existence, prior to the time of employment or before the services are rendered, a written agreement between the member and the person who is to be employed to perform such services. Such agreement shall include the nature of the proposed employment, the amount of the proposed compensation, and the written consent of such person's employer or principal. (c) Subject to Supplementary Materials .04 through .07, a[A] separate record of all payments or gratuities in any amount known to the member, the employment agreement referred to in paragraph (b) of this Rule and any employment compensation paid as a result thereof shall be retained by the member for the period specified by SEA Rule 17a-4. (d) Pursuant to the Rule 9600 Series, FINRA staff, for good cause shown after taking into consideration all relevant factors, may conditionally or unconditionally grant an exemption from any provision of this Rule to the extent that such exemption is consistent with the purpose of the Rule, the protection of investors, and the public interest.

• • • Supplementary Material: ------------------
  .01 Gifts Incidental to Business Entertainment. A gift given during the course of a business entertainment event is subject to this Rule unless it is consistent with the requirements of Supplementary Material .04 or .06 of this Rule. .02 Valuation of Gifts. Gifts must be valued at cost, exclusive of tax and delivery charges, except when valuing tickets for sporting or other events, for which a member

must use the higher of cost or face value. If gifts are given to multiple recipients, members must record the names of each recipient and calculate and record the value of the gift on a pro rata per recipient basis, for purposes of ensuring compliance with the $300 limit in paragraph (a) of this Rule. .03 Aggregation of Gifts. Members must aggregate all gifts given by the member and each associated person of the member to a particular recipient over the course of the year for purposes of ensuring compliance with the $300 limit in paragraph (a) of this Rule. In addition, each member must state in its procedures whether it is aggregating all gifts given by the member and its associated persons on a calendar year, fiscal year, or on a rolling basis beginning with the first gift to any particular recipient. The aggregation requirements of this Supplementary Material do not apply to gifts that are consistent with the requirements of Supplementary Material .04 or .06 of this Rule. .04 Personal Gifts. Gifts that are given for infrequent life events (e.g., a wedding gift or a congratulatory gift for the birth of a child) are not subject to the restrictions in paragraph (a) of this Rule or the recordkeeping requirements in paragraph (c) of this Rule, provided the gifts are customary and reasonable, personal in nature and not in relation to the business of the employer of the recipient. In determining whether a gift is “personal in nature and not in relation to the business of the employer of the recipient,” members should consider a number of factors, including the nature of any pre-existing personal or family relationship between the person giving the gift and the recipient and whether the associated person paid for the gift. When the member bears the cost of the gift, either directly or by reimbursing an associated person, FINRA presumes that such

gift is not personal in nature and instead is in relation to the business of the employer of the recipient. .05 Bereavement Gifts. Bereavement gifts that are customary and reasonable are not considered to be in relation to the business of the employer of the recipient and, therefore, are not subject to the restrictions in paragraph (a) of this Rule or the recordkeeping requirements in paragraph (c) of this Rule. .06 De Minimis Gifts and Promotional or Commemorative Items (a) Gifts of a de minimis value (e.g., pens, notepads, or modest desk ornaments) or promotional items of nominal value that display the member’s logo (e.g., umbrellas, tote bags, or shirts) are not subject to the restrictions in paragraph (a) of this Rule or the recordkeeping requirements in paragraph (c) of this Rule, provided that the value of the gift or promotional item is substantially below the $300 limit. (b) Customary and reasonable solely decorative items commemorating a business transaction are not subject to the restrictions in paragraph (a) of this Rule or the recordkeeping requirements in paragraph (c) of this Rule. .07 Donations Due to Federally Declared Major Disasters. Donations by a member or an associated person to any person, principal, proprietor, employee, agent or representative of another person to provide assistance to the individual for losses sustained in a natural event that the President has declared to be a major disaster, such as a wildfire, hurricane, tornado, earthquake, or flood, are not considered “in relation to the business of the employer of the recipient” for purposes of Rule 3220(a). Such donations are not subject to the restrictions in paragraph (a) of this Rule or the recordkeeping requirements in paragraph (c) of this Rule.

.08 Supervision and Recordkeeping. Rule 3110 requires a member to have a supervisory system reasonably designed to achieve compliance with Rule 3220. To meet these standards, members are required to have systems and procedures reasonably designed to ensure that payments and gratuities in relation to the business of the employer of the recipient given by the member and its associated persons to employees of another person are: (a) reported to the member; (b) reviewed for compliance with this Rule; and (c) maintained in the member’s records. Such procedures must be reasonably designed to ensure that an associated person who is giving a payment or gratuity is not responsible for determining whether such payment or gratuity is in relation to the business of the recipient’s employer. Members are not required to maintain records of gifts that are consistent with the requirements of Supplementary Material .04 through .07 of this Rule. .09 Gifts to a Member’s Associated Persons or Individual Retail Customers. This Rule does not apply to gifts from a member to its own associated persons, or to gifts from a member or an associated person to individual retail customers.

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5100. SECURITIES OFFERINGS, UNDERWRITING AND COMPENSATION
5110. Corporate Financing Rule — Underwriting Terms and Arrangements
(a) through (e) No Change.
(f) Non-Cash Compensation
(1) No Change.
(2) Restrictions on Non-Cash Compensation
In connection with the sale and distribution of a public offering of securities, no member or person associated with a member shall directly or

indirectly accept or make payments or offers of payments of any non-cash compensation, except as provided below. Non-cash compensation arrangements must be consistent with the applicable requirements of SEA Rule 15l-1 ("Regulation Best Interest") and are limited to the following:
(A) Gifts that do not exceed an annual amount per person fixed periodically by the Board of Governors1 and are not preconditioned on achievement of a sales target. (B) through (E) No Change. (g) through (j) No Change.

• • • Supplementary Material: --------------
  .01 through .07 No Change.

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9600. PROCEDURES FOR EXEMPTIONS
9610. Application
(a) Where to File
A member seeking exemptive relief as permitted under Rules 0180, 1210, 1220, 2030, 2114, 2210, 2231, 2241, 2242, 2310, 2359, 2360, 3170, 3220, 4210, 4311, 4320, 4360, 4540, 5110, 5121, 5122, 5123, 5130, 5131, 6183, 6625, 6731, 6732, 8211, 8213, 11870, or 11900, or Municipal Securities Rulemaking Board Rule G-37 shall file a written application with the appropriate department or staff of FINRA. (b) through (c) No Change.

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1
The current annual amount fixed by the Board of Governors is $300[100].