SIE practice questionmediumGift Limits
A registered representative takes a client to a baseball game where the tickets cost $350 each. Does this violate the FINRA gift limit under Rule 3220?
- ANo, because reasonable business entertainment where the host is present is generally not subject to the gift limit✓ Correct answer
- BYes, but only if the client is associated with another FINRA member firm
- CYes, the total exceeds the gift limit
- DNo, because gifts to customers have no dollar limit
Explanation
Why A — No, because reasonable business entertainment where the host is present is generally not subject to the gift limit
FINRA Rule 3220 draws a distinction between gifts and business entertainment. The annual gift limit applies to covered gifts, but reasonable business entertainment where the member or associated person is present is generally not treated as a gift. Entertainment still must be reasonable and consistent with firm policies.
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