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

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

INTV

Why some retirement plan advisers think Fidelity is invading their turf

InvestmentNews editor Frederick P. Gabriel Jr. and reporter Greg Iacurci talk about this week's cover story that looks at whether Fidelity Investments is stepping on the toes of retirement plan advisers.

Latest news & opinion

Is Fidelity competing with retirement plan advisers?

As the Boston-based mutual fund giant expands the products and services it brings to the retirement market, some financial advisers say the firm is encroaching on their turf.

Gun violence hits investment strategies, sparks political debates with advisers

Screening out weapons companies has limited downside.

Whistleblower said to collect $30 million in JPMorgan case

The bank did not properly disclose that it was steering asset-management customers into investments that would be profitable for JPMorgan Chase.

Social Security underpaid 82% of dually entitled widows and widowers

Agency failed to tell survivors that they could switch to a higher retirement benefit later.

If Finra eases firm oversight of outside business activities, broker-dealers could lose revenue

Brokerage firms would no longer be able to charge reps for supervising nonaffiliated RIAs.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print