FINRA published an FAQ concerning broker-dealer personnel hosting a virtual entertainment event or video meeting with employees of institutional customers or third-party broker-dealers where food and beverage will be provided.
The FAQ addresses compliance with FINRA gift and entertainment requirements, including FINRA Rule 3220, which provides that broker-dealers may not give gifts in excess of $100 per year "to any person where such payment is in relation to the business of the recipient's employer." FINRA clarified that broker-dealers that host a virtual business entertainment event may provide food and beverage designed to be consumed during the event without being subject to the $100 gift limit, provided that the cost and frequency of such events "do not raise questions of propriety" and the provision of the food and beverage is not preconditioned on achieving a sales target. FINRA added that hosts of these virtual events should (i) control participation in the events and be visibly present during the event, and (ii) keep records of the events, including the amount and value of the food and beverage provided, as they would for in-person events.
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