If adopted as proposed, the rules will largely expand supervisory resources needed to oversee compliance.

After a two-year silence, the Financial Industry Regulatory Authority (FINRA) has proposed amendments to Rule 3220 (Influencing or Rewarding the Employees of Others) (Gifts Rule) and Rule 3221 (Restrictions on Non-Cash Compensation) (Non-Cash Compensation Rule) and issued a new Proposed Rule 3222 (Business Entertainment) (Business Entertainment Rule) following its retrospective[1] rule review on gifts, gratuities, and non-cash compensation.[2] The comment period expires on September 23, 2016.

These proposed amendments and new rule codify past guidance and interpretation, reorganize and consolidate existing rules, and include several new concepts that would significantly affect current practice for many FINRA member broker-dealers.[3] Of particular note are the new limitations on non-cash compensation and sales contests, the annual limit on gift’s increase from $100 to $175 per person, and a lowered threshold for promotional items to $50 per person. Read More