For the first time in more than three decades, FINRA has raised the annual gift limit under Rule 3220. The Securities and Exchange Commission approved the amendments in February 2026, lifting the per-recipient threshold from $100 to $300 — a figure that had remained untouched since the rule’s introduction in 1992.
According to Star Compliance, taking effect on 30 March 2026, the update does more than simply adjust a number. FINRA has simultaneously codified longstanding interpretive guidance, sharpened the rule’s scope, and introduced greater flexibility through exemptive relief.
For compliance teams, the revision is a double-edged development. The higher threshold brings the rule in line with modern economic realities, yet firms must be more vigilant than ever in tracking, supervising, and documenting gifts and entertainment activity across their organisations.
The original $100 ceiling was designed to prevent improper influence over employees at institutional clients, vendors, and counterparties. Over time, however, inflation steadily eroded its real-world value, making the limit increasingly difficult to justify in practical business contexts.
The revised $300 figure accounts for both historical inflation and projected future cost increases, while preserving the rule’s fundamental purpose: preventing conflicts of interest and inappropriate business influence. Critically, FINRA has been explicit that the higher limit should not be read as a relaxation of compliance expectations. The objective of the rule remains unchanged.
From 30 March 2026, broker-dealers and associated persons may give up to $300 per year to a single recipient where the gift is connected to the business of that recipient’s employer. Firms are still required to aggregate all gifts provided to each recipient over the relevant reporting period and keep records accordingly.
While the increase may appear straightforward, it could paradoxically raise the stakes for accurate monitoring. Smaller gifts that previously hit the $100 ceiling rapidly may now accumulate over a longer period, amplifying aggregation risk if tracking processes are not sufficiently robust.
The amendments also introduce supplementary provisions that formalise prior FINRA guidance on a number of practical issues. On valuation, non-ticket gifts are assessed at cost, while event tickets are valued at the higher of cost or face value. On aggregation, all gifts to a single recipient must be tracked across the entire firm. On exceptions, certain personal gifts tied to life events, bereavement gifts, promotional items, and commemorative items may fall outside the annual limit. By codifying these interpretations, FINRA has provided greater regulatory clarity while reinforcing supervisory expectations.
The amended rule also brings welcome clarity on scope. Rule 3220 governs gifts given to employees of institutional clients, vendors, and counterparties — situations in which a gift could influence decisions made on behalf of an employer. However, it does not apply to gifts made to individual retail customers, nor to gifts from a firm to its own employees.
Many firms historically applied the $100 cap to retail customers as a matter of internal policy. With the rule now amended, organisations may wish to reassess whether those voluntary restrictions remain appropriate or proportionate.
Despite the changes to the gift threshold, FINRA has not introduced any monetary cap on business entertainment. Meals, sporting events, and hospitality activities continue to be governed by a principles-based standard: entertainment is permissible provided it is ordinary and customary, and not so frequent or extensive as to raise questions of propriety.
Classification, however, remains critical. If a firm representative accompanies a client to an event, the activity is treated as entertainment. If a ticket or invitation is provided without the host present, it becomes a gift and must count towards the $300 annual limit. This accompanied-versus-unaccompanied distinction is one of the most common sources of compliance errors identified during regulatory examinations.
The amended rule introduces a number of operational considerations that compliance teams will need to work through carefully.
Firm-wide aggregation remains a significant challenge. Rule 3220 requires that all gifts to a recipient be tracked across the entire organisation, including those provided by multiple employees or departments engaging with the same institutional contact. Manual processes frequently struggle to maintain accurate cumulative totals at scale.
Independent classification is another requirement that the rule reinforces. The employee providing a gift should not be the one to determine whether it falls under the rule. Classification and compliance review must instead be conducted through supervisory processes that sit independently of the submitting employee.
Firms must also bear in mind that FINRA’s update does not affect other regulatory frameworks governing gifts and entertainment. Overlapping obligations — including MSRB Rule G-20, ERISA fiduciary requirements, state and local gift laws, and SEC pay-to-play rules — remain in force. This layered regulatory environment makes centralised monitoring and consistent policy enforcement all the more important.
As firms update their policies and supervisory procedures, many are revisiting the systems they rely on to manage gifts and entertainment activity. Manual spreadsheets and decentralised approvals make it difficult to enforce aggregation requirements, maintain audit-ready records, and surface potential conflicts before they become regulatory issues.
Read the full post on RegTech Analyst
Copyright © 2026 FinTech Global
