Finra wants to up annual gift limit to $175

Regulator seeking common-sense changes to gift and non-cash comp rules for members

Aug 10, 2016 @ 1:12 pm

By Liz Skinner

+ Zoom

Finra proposed increasing to $175 from $100 the amount that a registered representative can spend on an individual per year, and is seeking other updates to its gifts, gratuities and non-cash compensation rules.

"The gift rule is meant to prohibit conflicts of interest so you can't influence a firm to send business in your direction," said Todd Cipperman, founding principal at Cipperman Compliance Services.

The Financial Industry Regulatory Authority Inc. also proposed changes to apply the non-cash compensation restrictions to all securities transactions, not just for sales of mutual funds, variable annuities, direction participation programs and public offerings that the rule applies to currently. These rules limit the way members can accept non-cash compensation for sales.

(More: New Finra execs should toughen investor protection rules)

Additionally, the proposed changes would allow for ordinary and usual business entertainment according to policies and procedures established by the member firms, including those that ensure no quid pro quos and includes defined allowable business entertainment, the brokerage industry self-regulator said.

This approach will be better than following the "amorphous guidelines" that Finra has set up over the years, Mr. Cipperman said.

“All of these changes make sense,” he said. “The $100 gift limit was way too low and should be raised, though $175 seems like an arbitrary number.”

(More: Finra targets variable annuities as 'sweet spot' of scrutiny)

Comments on the proposed changes are due by September 23.

These updates are a result of a Finra rule review that concluded in December 2014 that these directives, as well as those regarding member firms' public communications, needed refreshing.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

Events

Building a practice for tomorrow's tomorrow

Advisers: it is time to take a long view of your practice. Check out some tips and strategies on how to do it (and why) with Tom Stefaniak of Pinnacle Wealth Management.

Video Spotlight

The Search for Income

Sponsored by PGIM Investments

Recommended Video

Path to growth

Latest news & opinion

T. Rowe Price steps up its game to serve financial advisers

The Baltimore-based mutual fund giant is more aggressively targeting financial advisers with a beefed-up wholesale crew and placement on custodial platforms.

The most important tax changes for 2018

The Internal Revenue Service issued inflation adjustments to more than 50 tax provisions for 2018.

Shift to Roth 401(k)s 'highly likely' part of tax reform: former Treasury official Mark Iwry

Mandated contributions to Roth accounts would likely only be partial, as opposed to having a full repeal of pre-tax accounts.

E*Trade acquiring custodian Trust Company of America

Discount broker buying second-tier custodian for $275 million.

Another thousand Dow points higher, and investors yawn

Market milestones keep falling like dominoes, with 51 records broken so far this year.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print