FINRA Raises the Gift Limit: What It Means for Your Business

For the first time in over 30 years, FINRA has updated its gift rule. The SEC recently approved amendments to FINRA Rule 3220, raising the per-person gift limit from $100 to $300 annually. This threshold had not changed since 1992.

While the rule directly applies to broker-dealers, its implications extend further. The $300 figure now represents a regulatory baseline for what constitutes a "reasonable" business gift. Expect business leaders across all industries to point to this change as justification for raising internal gift limits. Compliance and legal teams should be prepared for that conversation.

A Note on Recordkeeping and Supervision

For FINRA-covered firms, you must maintain a separate record of all gifts, in any amount, for the period required under SEC rules. Importantly, compliance or another independent function should decide whether a gift is business-related, not the person giving it. Certain categories don't require recordkeeping at all: personal gifts paid out of pocket, bereavement gifts, de minimis items, and disaster donations. Covered firms’ written supervisory procedures must be updated to reflect the new threshold, and training programs aligned.

For firms outside FINRA's direct reach, this framework offers a useful model for individual programs.

Life Event Gifts

Many people bump against these limits for life events, like births or weddings. The new $300 limit will bring some relief, but be mindful of perception and who is paying. These gifts can fall outside the limit entirely, but only if the employee pays out of pocket. If the firm reimburses or the employee uses a corporate card, FINRA presumes it's a business gift and the cap applies. Bereavement gifts (flowers, food) may not carry the same restriction, but you should remain prudent and consider consistency of approach and reputational perceptions. Be clear with employees about when they can expect reimbursement and when they're on their own.

What You Can Do

1. Use this as a prompt to revisit your G&E program holistically. Don't just change the number. Take the opportunity to clarify valuation rules, aggregation methods, and the line between business gifts, personal gifts, and entertainment. Many companies have informal practices that have drifted from their formal policies given the $100 was in place for decades. Now is a good time to bring them back into alignment.

2. Think carefully before raising your limits. Higher limits create more headroom, but also more risk if the increase is used inconsistently or aggressively. If you do raise limits, make sure you have the monitoring infrastructure to support it and training for your team about responsible use.

3. Be proactive about monitoring. Compliance teams should track how employees actually use any increased limits. Consider deploying an AI agent that can query your G&E portal to surface trends and outliers in real time: who's clustering near the cap, which clients are receiving concentrated attention, whether gift activity spikes around deal timelines. Did gifting patterns change after the rule change? Catching patterns early lets you address issues before they become problems.

This is the new landscape for the foreseeable future. Whether FINRA directly covers your firm  or not, now is a good time to consider your approach to ensure you have the tools in place to monitor what's actually happening on the ground.

Questions? Reach out to your usual contact.

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