The Regulatory Change Is Narrow in Form but Significant in Effect FINRA’s amended Gifts Rule becomes effective on March 30, 2026, following SEC approval on February 12, 2026, and FINRA’s adoption on February 27, 2026. The annual per-recipient gift threshold will increase from $100 to $300, marking the first adjustment since 1992. This is not a deregulation of gifts. It is a recalibration of the monetary threshold accompanied by more explicit supervisory, valuation, aggregation, and recordkeeping obligations. The $300 Threshold Does Not Eliminate Conflict-of-Interest Risk The new limit should not be interpreted as permission to provide gifts whenever the value remains below $300. The regulatory question remains whether a payment or gratuity is connected to the business of the recipient’s employer and whether it could create an improper incentive, conflict, or appearance of influence. A larger threshold changes the permitted amount; it does not change the underlying compliance purpose of preventing bribery, favoritism, and undisclosed commercial pressure. Aggregation Is the Principal Anti-Avoidance Mechanism Firms must aggregate covered gifts provided by the firm and its associated persons to the same recipient during the applicable tracking period. Each firm must define whether aggregation operates on a calendar-year, fiscal-year, or rolling basis beginning with the first gift. This requirement directly targets the practice of dividing a larger benefit into multiple smaller transfers. A firm that reviews transactions individually but fails to identify cumulative exposure may possess a formal policy without possessing an effective control framework. Associated Persons Cannot Be the Final Compliance Judge The amended rule requires supervisory systems reasonably designed to ensure compliance and expressly addresses the danger of self-classification. The individual providing the payment or gratuity cannot be responsible for determining whether it relates to the recipient’s employer. This is a structural control requirement. Firms must create a review process capable of challenging the business purpose, recipient relationship, valuation, and cumulative amount rather than merely recording an employee’s own conclusion. Valuation Rules Reduce Ambiguity but Increase Documentation Pressure Most gifts must be valued at cost, excluding tax and delivery charges. Tickets for sporting or other events are treated differently and must be valued at the higher of cost or face value. The revised approach removes the prior higher-of-cost-or-market-value standard for ordinary gifts, reducing subjectivity in routine calculations. Nevertheless, firms still need reliable documentation showing what was purchased, for whom, when, at what cost, and whether the same recipient received other benefits during the relevant period. Exclusions Are Narrower Than Many Businesses Assume Personal gifts connected to infrequent life events may be excluded when they are customary, reasonable, personal in nature, and unrelated to the recipient’s employer. However, where the firm pays for or reimburses the gift, FINRA treats the benefit as business-related and therefore subject to the rule. Bereavement gifts receive broader treatment, while de minimis, promotional, commemorative, and disaster-related donations may qualify for specific exclusions. These categories are fact-sensitive and should not be converted into automatic exemptions through informal office practice. Business Entertainment Remains a Separate Compliance Fault Line The amended rule addresses gifts provided during business entertainment but does not establish a complete new safe harbor for the entertainment itself. Existing guidance concerning ordinary and usual business entertainment remains relevant. Frequency, scale, context, and the surrounding commercial relationship continue to matter. A meal or event may appear routine in isolation but become problematic when repeated, unusually expensive, directed to a decision-maker, or combined with other benefits. Exemptive Authority Creates Flexibility, Not Informal Discretion FINRA now has explicit authority to grant conditional or unconditional relief under the Rule 9600 Series. This may assist firms facing unusual factual circumstances, but it does not authorize firms or employees to create private exceptions. Until relief is formally available and applicable, the written rule and the firm’s supervisory procedures remain controlling. Reliance on anticipated flexibility is not a substitute for documented approval. The Required Compliance Response Broker-dealers should revise gift policies before the effective date, identify the selected aggregation period, update approval workflows, test recipient-level monitoring, define evidence requirements, and train associated persons on exclusions and escalation duties. Internal audit and compliance testing should examine cumulative patterns rather than isolated entries. The central legal lesson is direct: the threshold is higher, but the duty of supervision is more clearly articulated. Firms that treat the amendment as a spending increase may create precisely the control weakness the rule is designed to prevent.
