FINRA has proposed a long-awaited update to Rule 3220, commonly known as the “Gifts Rule”, that would raise the annual gift limit from $100 to $250 per recipient. This is the first proposed adjustment to the dollar threshold in over 30 years and is intended to modernize the rule while maintaining its core intent: preventing improper influence in business relationships.

For compliance professionals, the proposal signals an opportunity to revisit existing gift and entertainment policies, training protocols, and recordkeeping systems before any changes become final.

A Quick Refresher: What Rule 3220 Covers

FINRA Rule 3220 prohibits member firms and their associated persons from giving gifts of material value in excess of the annual threshold to employees of another member firm or business counterparty, where the gift relates to the business of the recipient’s employer.

The rule does not apply to occasional meals, sporting events, or entertainment, as long as they are not frequent or excessive and the giver attends.

What’s Changing?

The proposal includes two key updates that compliance teams should note:

  • Annual gift limit raised from $100 to $250 per recipient
    This change aligns the threshold with inflation and modern business practices while maintaining the rule’s ethical safeguards.
  • Formal integration of interpretive guidance
    FINRA would codify long-standing guidance into the rule itself, helping eliminate ambiguity around what qualifies as a gift versus entertainment.

Compliance Implications

While the increase in the gift limit may appear straightforward, gifts and entertainment continue to be a common area of concern during regulatory exams — often due to inconsistent application or poor documentation.

If adopted, the proposed rule changes will require compliance professionals to:

  • Update written policies and procedures to reflect the revised threshold and interpretive language
  • Enhance employee training to reinforce the distinction between gifts, entertainment, and promotional items
  • Maintain accurate books and records to demonstrate compliance with the revised standard
  • Monitor for potential conflicts of interest or patterns that could be perceived as unethical, even if under the dollar threshold

What’s Next?

The proposal is open for public comments through September 4, 2025. Following the comment period, FINRA may make further modifications before submitting the rule to the SEC for final approval.

If finalized, firms should be prepared to swiftly implement changes to internal systems, supervisory processes, and staff education efforts.