SEC Approves Tripling Annual Gift Limit to $300
The U.S. Securities and Exchange Commission has approved a FINRA proposal to triple the annual gift limit for broker-dealers from $100 to $300. The decision, finalized this week, represents the first increase to the gift cap since 1992 and is designed to account for decades of inflation while reducing the need for frequent future adjustments.
The change, which amends FINRA Rule 3220, aims to balance the practical realities of modern business courtesies with the need to prevent conflicts of interest and improper incentives.
Previously reported by AltsWire, FINRA proposed the $300 increase in the fall following an initial proposal in June 2025 to increase the gift limit to $250. The self-regulatory organization stated that it was persuaded by public comments suggesting a higher limit was needed to address future inflation and regional differences in the cost of living.
The SEC-approved amendment introduces several related updates. FINRA now has the authority to grant conditional or unconditional exemptions from the rule for “good cause shown, after taking into account all relevant factors and provided that such exemption is consistent with the purposes of the rule, the protection of investors, and the public interest,” providing flexibility for different firm sizes and business models.
The $300 limit will also apply to FINRA’s non-cash compensation rules, affecting direct participation programs, variable contracts, and investment company securities. To clarify scope, the rules explicitly state they do not apply to gifts given to a member’s own associated persons or to individual retail customers.
Codifying Industry Guidance
The SEC order also codifies longstanding interpretive guidance into formal supplementary material, providing clearer compliance benchmarks for firms.
Specifically, the order clarifies:
- Personal gifts: Personal gifts are exempt if for infrequent life events (e.g., weddings, births) and not business-related.
- Bereavement: Customary and reasonable bereavement gifts are not considered business-related.
- De minimis items: Promotional items (e.g., pens, tote bags) are exempt if their value is “substantially below” the $300 limit.
- Disaster relief: Donations to assist victims of presidentially declared major disasters are not subject to the gift limit.
- Valuation: Most gifts are valued at cost; however, tickets for events must be valued at the higher of cost or face value.
Industry groups generally applauded the move, though some advocates – including the Financial Services Institute and Robinhood – had initially pushed for a higher $500 limit. FINRA settled on $300 as a middle ground that it says maintains investor protection while acknowledging regional cost-of-living differences.
SEC Chairman Paul Atkins has signaled a broader focus on streamlining regulations and fostering efficient capital markets. This approval aligns with that shift, as the commission noted the update improves efficiency, transparency, and understanding of the rule’s requirements.
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