Gift Limit Increased to $300

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• Gift Limit Increased to $300 
  The SEC approved our proposal to raise the limit on gifts members can give to employees of an institutional customer, vendor, or counterparty from $100 to $300. As part of our FINRA Forward rule modernization initiative, this rule change addresses an ongoing pain point in everyday business. In addition to raising the gift limit, it clarifies that the FINRA Gifts Rule (Rule 3220) does not apply to gifts to individual retail customers. It also addresses valuation, aggregation, supervision, and recordkeeping requirements; and codifies several exceptions, including for personal gifts, bereavement gifts, items of de minimis value, promotional or commemorative items, and donations due to federally declared major disasters. FINRA will announce the effective date of these changes, which were approved by the SEC on Feb. 12, in a regulatory notice. 
   
• SEC Approves Enhanced Framework for Capital Acquisition Brokers 
  The SEC approved FINRA’s proposed rule change to support growth among specialized Capital Acquisition Brokers (CABs). The amendments are part of our ongoing FINRA Forward efforts to promote capital formation without lessening investor protections. Key provisions include expanding the definition of institutional investor to include eligible employees; allowing CABs to act as intermediaries in secondary transactions of unregistered securities between institutional investors; permitting CABs to represent buyers as well as sellers in specified private placement and M&A transactions; and allowing CAB-associated persons to participate in private securities transactions, subject to FINRA Rule 3280. These changes, approved by the SEC on Feb. 10, are designed to encourage more broker-dealers to elect CAB status, benefiting both firms and investors alike. 
   
• New FAQ Issued on Capital Balance Funds 
  The SEC staff recently issued a no-action letter granting specified relief with regard to the securities count, verification, and comparison requirements under SEA Rule 17a-13 for certain capital balance funds. In tandem with this relief, we have published an FAQ to clarify that compliance with the circumstances set out in the SEC staff’s letter will also be deemed to comply with corresponding requirements under FINRA Rule 4522(b)(1) with respect to the capital balance funds. 
   
• ICYMI: FINRA Moves to Align Performance Projection Requirements 
  FINRA filed proposed amendments to Rule 2210 (Communications with the Public) to better align the regulatory requirements for broker-dealers and investment advisers that present performance projections in written communications to investors. In response to our FINRA Forward notices on rule modernization, commenters requested greater harmonization between broker-dealer and investment adviser requirements. 
  
  The proposed amendments would create a narrowly tailored exception to Rule 2210 to permit the presentation of projected performance or targeted returns when member firms meet specified conditions. These include adopting policies and procedures limiting who can receive the performance projections or targeted returns; having a reasonable basis for the criteria and assumptions made in calculating the projections or targeted returns; and providing specified information. The proposal was filed with the SEC on Feb. 10 and will be published for comment in the Federal Register in the near future. 
   
• ICYMI: New Guidance on Use of Negative Consent to Transfer or Assign Customer Accounts 
  FINRA issued Regulatory Notice 26-03 to reduce burdens and guide practices regarding the bulk transfer or assignment of customer accounts by negative consent. The notice, published on Feb. 6, is part of our FINRA Forward initiative to support member firm compliance and addresses feedback we received on modernizing our rules and guidance to reflect modern business practices. 
  
  Effective April 1, where appropriate under the circumstances, members may use negative consent letters without obtaining the staff’s “no objection” to the proposed transfer or assignment of customers’ accounts by negative consent. To empower member compliance, the notice describes our previous guidance regarding the use of negative consent and sets forth effective practices for the use of negative consent in future bulk transfers and assignments. 
   
• ICYMI: FINRA Makes Revised Communications Pilot Permanent 
  Following a successful six-month pilot in which more than half of eligible firms participated, FINRA will now allow firms to upload for review communications that have been revised to comply with applicable standards without incurring an additional filing fee. To qualify, firms must meet certain conditions, such as limiting their revisions to those identified by FINRA’s Advertising Regulation Department in the original review letter. Visit this page for more information.