Limitations on Gifts, Gratuities, and Non-Cash Compensation
Broker-dealers may not offer their clients gifts or gratuities in connection with the sale or distribution of municipal securities in excess of $100 per year, except for occasional gifts of meals or tickets to theatrical, sporting, or other entertainments. Non-cash compensation in excess of this amount is, likewise, not allowed.
Occasional gifts of meals or tickets to theatrical or sporting events are allowable if they are hosted by the dealer. Broker-dealers may sponsor legitimate business functions recognized by the IRS as deductible business expenses. Also allowable are gifts of reminder advertising (pens or calendars that display the firm’s logo), as long as they are not too expensive or given too frequently.
This restriction does not apply where compensation is for services rendered, as long as the services and compensation are clearly described in a written contract, and the agreement has the written consent of the person’s employer.
MSRB Rule G-20
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