Nasdaq ISE has filed an immediately effective rule change that would increase its annual business-gift limit from $100 to $300 and align its compliance framework with FINRA Rule 3220. Although the amendment is directed primarily at exchange members and their associated persons, it offers a timely reminder for securities firms to review how they approve, value, aggregate, and document gifts involving customers, vendors, and counterparties.

What Nasdaq ISE Is Changing

On September 3, 2026, Nasdaq ISE, LLC filed a proposed amendment to Options 10, Section 27, its rule governing payments and gratuities given to employees of other organizations. The SEC published notice of the filing on September 10, 2026, under Release No. 34-106325 and File No. SR-ISE-2026-49.

The central change is an increase in the annual limit for business-related gifts from $100 to $300 per recipient. The current $100 limit dates back to 1992. Nasdaq ISE explained that the higher amount reflects inflation and is intended to remain workable for approximately the next decade.

The proposal closely follows amendments to FINRA Rule 3220 that the SEC approved earlier in 2026. Aligning the two rules would allow FINRA to assume regulatory responsibility for the ISE rule under an existing Rule 17d-2 agreement, reducing overlapping requirements for firms that belong to both organizations.

The $300 Limit Is Only Part of the Story

The filing does more than raise the monetary threshold. It incorporates detailed guidance addressing how firms must classify, value, aggregate, supervise, and record gifts.

Gifts given during business entertainment

A gift presented during a business-entertainment event generally remains subject to the $300 limit. The cost of the entertainment itself, however, would not be included in the gift’s value.

This distinction can matter when a firm hosts a meal, conference, sporting event, or similar activity and separately gives attendees merchandise or another item of value.

Valuation requirements

Most gifts would be valued at their cost, excluding taxes and delivery charges. Tickets to sporting and other events would be valued at the higher of their cost or face value.

When a gift is provided to several recipients, the firm would need to identify each recipient and allocate the gift’s value among them on a pro rata basis.

Annual aggregation

Firms would be required to aggregate gifts given by the firm and all its associated persons to the same recipient during the applicable annual period.

Written procedures must specify whether the firm calculates that period using:

• The calendar year;

• The firm’s fiscal year; or

• A rolling period beginning with the first gift to the recipient.

The aggregation rule is designed to prevent firms and their personnel from avoiding the limit through several smaller gifts.

Which Gifts Would Be Excluded?

The proposed rule recognizes several categories that would not count toward the $300 limit when the applicable conditions are satisfied.

Personal and bereavement gifts

Customary and reasonable gifts associated with infrequent life events—such as a wedding or the birth of a child—may be treated as personal rather than business-related. Relevant factors include the parties’ preexisting relationship and whether the associated person paid for the gift personally.

If the firm pays for or reimburses the gift, the gift is presumed to relate to the recipient’s employer’s business rather than a purely personal relationship.

Customary and reasonable bereavement gifts would also be excluded from the limit and related recordkeeping requirements.

De minimis and promotional items

Items of minimal value, such as pens, notepads, or modest desk ornaments, would generally be excluded. Promotional items bearing the firm’s logo—such as tote bags, shirts, or umbrellas—may also qualify if their value is substantially below the $300 threshold.

Customary and reasonable decorative items commemorating a business transaction would receive similar treatment.

Disaster-relief donations

Assistance provided to an individual for losses caused by a federally declared major disaster would not be treated as business-related. This exception may cover assistance following wildfires, hurricanes, tornadoes, earthquakes, and floods.

Gifts to retail customers and a firm’s own personnel

The rule would not apply to gifts given by a firm to its own associated persons or to gifts given to individual retail customers. Its principal focus remains gifts to employees or representatives of another organization, including institutional customers, vendors, and counterparties.

Supervision and Recordkeeping Remain Central

A higher limit does not eliminate the need for internal oversight. ISE members would need systems and written procedures reasonably designed to ensure that covered gifts are:

• Reported to the firm;

• Reviewed for compliance; and

• Preserved in the firm’s records.

Importantly, the person giving the gift should not be solely responsible for deciding whether it is business-related. The filing contemplates review by someone else within the organization to promote a more objective assessment.

The proposal would also allow FINRA staff to grant conditional or unconditional exemptions for good cause when consistent with the rule’s purpose, investor protection, and the public interest.

What Securities Firms Should Do Now

Firms subject to ISE or FINRA requirements should consider reviewing their gifts and entertainment programs before relying on the increased limit. Relevant steps may include:

1. Updating written supervisory procedures and employee guidance;

2. Confirming which annual aggregation method the firm uses;

3. Reviewing gift-reporting and preapproval workflows;

4. Revising valuation rules for event tickets and group gifts;

5. Distinguishing gifts from business-entertainment expenses;

6. Training personnel on personal-gift and de minimis exceptions; and

7. Testing whether records capture gifts across business units and associated persons.

Firms should also remember that an exchange or FINRA limit is not the only consideration. Anti-bribery laws, pay-to-play restrictions, fiduciary obligations, state and local ethics rules, contractual policies, and a recipient organization’s internal standards may impose stricter limits or prohibit a gift altogether.

Effective Date and Comment Process

The filing became effective upon submission under Section 19(b)(3)(A)(iii) of the Securities Exchange Act and Rule 19b-4(f)(6). It ordinarily cannot become operative until 30 days after filing unless the SEC designates a shorter period. The SEC may temporarily suspend the rule change within 60 days of filing and institute proceedings to determine whether it should be approved or disapproved.

Comments should reference File No. SR-ISE-2026-49 and will be due 21 days after the notice is published in the Federal Register.

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This blog post is for informational purposes only and is not legal advice. Please consult with a Launch Legal attorney regarding your specific situation.