FINRA’S Revised Gifts Rule
What the New $300 Limit Means for Compliance Programs
In February 2026, the Securities and Exchange Commission approved FINRA’s amendments to Rule 3220, the long-standing rule governing gifts given in connection with business relationships. The update increases the annual gift limit from $100 to $300 per recipient—the first adjustment since the rule was adopted in 1992.
The amendments, effective March 30, 2026, do more than simply raise the threshold. FINRA also codified decades of interpretive guidance, clarified the scope of the rule, and introduced greater flexibility through exemptive relief.
For compliance teams, the change presents both an opportunity and a challenge: while the higher threshold modernizes the rule, firms must still ensure they can effectively track, supervise, and document gifts and entertainment activity across the organization.
Why FINRA Updated the Rule
FINRA originally established the $100 gift limit to prevent improper influence on employees of institutional clients, vendors, and counterparties. Over time, however, inflation significantly reduced the real value of that threshold.
The revised $300 limit reflects both historical inflation and projected future cost increases, while maintaining the rule’s core purpose—preventing conflicts of interest and inappropriate business influence.
Importantly, FINRA emphasized that the rule’s objective remains unchanged. The higher limit should not be interpreted as relaxed compliance expectations.
What the Revised Rule Changes
A Higher Annual Gift Limit
Beginning March 30, 2026, broker-dealers and associated persons may give up to $300 per year to a single recipient when the gift relates to the business of the recipient’s employer.
Firms must still aggregate gifts given to each recipient over the applicable reporting period and maintain records of those gifts.
Although the increase appears straightforward, the higher threshold may actually increase the importance of accurate monitoring. Smaller gifts that previously triggered limits quickly may now accumulate over time, creating greater aggregation risk.
Clearer Regulatory Guidance
The amendment introduces supplementary provisions that codify prior FINRA guidance on gifts and entertainment practices. These provisions address several practical issues firms encounter, including:
- Gift valuation: non-ticket gifts are valued at cost, while event tickets are valued at the higher of cost or face value.
- Aggregation requirements: all gifts to a single recipient must be tracked across the firm.
- 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 clarity while reinforcing supervisory expectations.
Clarified Scope of the Rule
Another important clarification concerns who the rule applies to.
Rule 3220 governs gifts given to employees of institutional clients, vendors, and counterparties, where gifts could influence business decisions made on behalf of an employer.
However, the amended rule confirms that it does not apply to:
- gifts to individual retail customers, or
- gifts from a firm to its own employees.
Many firms historically applied the $100 limit to retail customers as a matter of internal policy. With the rule change, organizations may wish to reconsider whether those voluntary restrictions remain appropriate.
Entertainment: What Did Not Change
Despite the increase in the gift limit, FINRA did not introduce a dollar cap for business entertainment.
Entertainment activities such as meals, sporting events, or hospitality events continue to be governed by a long-standing principles-based standard. Under this framework, entertainment is permissible provided it is ordinary and usual and not so frequent or extensive as to raise questions of propriety.
However, classification remains critical.
If a firm representative attends an event with the client, the activity is treated as entertainment. If a ticket or invitation is provided without the host attending, the item becomes a gift and must be counted toward the $300 annual limit.
This accompanied-versus-unaccompanied distinction remains one of the most common sources of compliance errors during regulatory examinations.
Operational Challenges for Firms
Although the rule provides greater clarity, it also introduces operational considerations that firms must address.
Firm-Wide Aggregation
Rule 3220 requires firms to track all gifts to a recipient across the organization. This includes gifts provided by multiple employees or departments interacting with the same institutional contact.
Manual processes often struggle to maintain accurate cumulative tracking at scale.
Independent Classification
The rule also reinforces that the employee giving the gift should not determine whether the gift is subject to the rule. Classification and compliance review must be conducted through supervisory processes independent of the submitting employee.
Multiple Regulatory Frameworks
FINRA’s update does not affect other regulatory regimes governing gifts and entertainment. Firms must continue to consider overlapping obligations such as:
- MSRB Rule G-20
- ERISA fiduciary requirements
- state and local gift laws
- SEC pay-to-play rules
This complex regulatory environment increases the importance of centralized monitoring and consistent policy enforcement.
Global insurance provider implements Star’s Employee Conflicts of Interest
Leveraging Technology to Manage Gifts and Entertainment
As firms update their policies and supervisory procedures, many are reevaluating the systems used to manage gifts and entertainment activity.
Manual spreadsheets and decentralized approvals make it difficult to enforce aggregation rules, maintain audit-ready records, and identify potential conflicts.
StarCompliance’s Gifts and Hospitality Compliance Solution helps firms operationalize Rule 3220 requirements by providing:
- Automated request and approval workflows aligned with firm policies
- Real-time aggregation tracking across recipients and employees
- Independent classification controls supporting supervisory review
- Centralized audit trails and reporting
These capabilities allow compliance teams to monitor gifts and entertainment activity more effectively and demonstrate regulatory oversight.
Closing the Gap with Expense Integration
Another challenge firms face is reconciling pre-approved gift requests with expense reporting systems.
Employees may submit expense reports that differ from originally approved amounts, creating gaps in gift tracking and cumulative totals.
To address this, StarCompliance is developing a native integration with Concur, with additional connectors planned for other expense platforms. These integrations will allow firms to reconcile expense submissions with approved gift records and maintain accurate monitoring across the full lifecycle of gifts and entertainment activity.
Preparing for the New Rule
With the amended rule taking effect in March 2026, firms should take several steps now:
- Update written supervisory procedures to reflect the $300 gift limit and supplementary rules
- Clarify policy distinctions between institutional recipients, retail customers, and internal employees
- Review internal entertainment guidelines and documentation requirements
- Ensure monitoring processes support firm-wide aggregation and independent review
- Evaluate whether technology solutions can strengthen oversight and reporting
The Bottom Line
FINRA’s update to Rule 3220 modernizes a regulatory framework that had remained unchanged for more than three decades. While the higher gift limit provides greater flexibility for routine business interactions, the rule continues to emphasize strong supervision and transparency.
For compliance teams, success will depend not just on updating policies, but on ensuring the firm can accurately track and monitor gifts and entertainment activity across the organization.
Learn More
The revised rule takes effect March 30, 2026. Now is the time for firms to evaluate whether their gifts and entertainment programs are prepared for the new regulatory landscape.
Learn how StarCompliance’s Gifts and Hospitality Compliance Solution can help your firm operationalize Rule 3220, strengthen oversight, and simplify compliance.
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