4.3 Employee Conduct, Gifts & Selling Away
FINRA strictly regulates conflicts of interest, outside employment, gifts, and unauthorized private securities transactions.
Key FINRA Exam Takeaways
- Gifts & Gratuities (Rule 3220): Maximum $300 per person per year (raised from $100 in March 2026) to employees or agents of another person, such as an institutional customer's staff.
- Business Entertainment Exemption: Dinners, sporting events, and theatre tickets are exempt from the $300 cap PROVIDED the host accompanies the guest.
- Outside Business Activities (OBAs, Rule 3270): Prior written notification to the broker-dealer is required for any compensated outside employment.
- Selling Away (Private Securities Transactions, Rule 3280): Selling securities outside the firm without prior written approval is prohibited.
- Borrowing/Lending: Generally prohibited unless immediate family member or financial lending institution.
Interactive Knowledge Checkpoint • Section 4.3
A registered representative participates in a weekend business venture selling real estate software for compensation. What regulatory step must the representative take?