Year-End Planning for Gifts and Entertainment

November 2014


With the year-end upon us, more firms are considering gifts for giving to clients, vendors, employees, and referral sources to celebrate drawing another successful year to a close. Naturally, this begs the question as to what the regulatory requirements are, including monetary thresholds for giving and receiving gifts.  While the Securities and Exchange Commission (“SEC”) has offered little in the way of formal guidance to investment advisers (“IAs”), FINRA has provided specifications in Rule 3220 for broker-dealers.  This allows the financial industry to evaluate various considerations when formulating their gift policy.  This month’s Risk Management Update will address: (1) what is considered a gift; (2) what value is acceptable; and (3) what compliance considerations must be given when giving or receiving gifts.

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