Reportable Events: Outside Activities, Gifts, and More

A second job, a side deal in securities, a gift to a client's employee, a donation to a mayor, a bankruptcy. Each is a reportable event with its own rule and deadline.

Outside business activities

An outside business activity (OBA) is any work you do for someone other than your firm. FINRA Rule 3270 covers registered persons who act as an employee, independent contractor, sole proprietor, officer, director, or partner of another person. It also covers outside work you get paid for, or expect to be paid for.

Give your firm prior written notice. Prior means before the activity starts.

The firm then decides. It asks whether the activity would interfere with your duties to customers, and whether the public would see it as firm business. It may approve, set conditions, or prohibit.

Passive investments sit outside Rule 3270, and so do private securities transactions.

Driving for a rideshare company on weekends is an OBA. So is an unpaid seat on a charity's board. Pay is not the test.

Private securities transactions

A private securities transaction is any securities transaction outside the regular course or scope of your job. Selling shares in a friend's start-up to your neighbors is the classic case. The industry calls it selling away.

FINRA Rule 3280 covers every associated person, not only registered persons. Give the firm written notice before you take part, and describe the transaction in detail.

What the firm must do next depends on selling compensation. That means any pay from any source tied to the purchase or sale: commissions, finder's fees, securities, profits, or expense reimbursement.

• With selling compensation, the firm must approve or disapprove in writing. If it approves, it records the trade on its own books and supervises it. If it disapproves, you may not take part at all.
• With no selling compensation, the firm acknowledges your notice in writing. It may still set conditions on your participation.

The exam likes to swap these two rules. Rule 3270 covers registered persons; Rule 3280 covers all associated persons. Only a compensated private securities transaction needs written approval.

Gifts and gratuities

FINRA Rule 3220 caps gifts at $300 per person per year. The cap counts anything you give in relation to the business of the recipient's employer. It sat at $100 from 1992 until 30 March 2026, so older study guides still print $100. MSRB Rule G-20 matches the $300 figure for dealers that are FINRA members. Municipal advisors and bank dealers outside FINRA stay at $100 until 1 December 2026.

Four kinds of giving fall outside the cap:

• De minimis items and logo promotional items, when the value sits well below $300.
• Customary personal gifts for a life event, such as a wedding or a birth.
• Customary bereavement gifts.
• Payment under a written employment or service contract, with the employer's prior written consent.

Your firm keeps a separate record of gifts. Value a gift at cost, and a ticket at the higher of cost or face value. Add up what you gave one person across the year.

Separate non-cash compensation rules cover direct participation programs, variable contracts, fund shares, and new underwritings. They allow gifts within the limit, occasional meals and tickets, qualifying training meetings, and internal sales contests.

Business entertainment

Business entertainment means hosting a customer or business contact at a meal or event that you attend with them. The $300 gift cap does not apply.

Your attendance decides which rule applies. Take a client to a game and sit with them, and it is entertainment. Hand over the tickets and stay home, and it is a gift.

Entertainment must be neither so frequent nor so extensive that it raises a question of propriety. No dollar figure replaces that standard.

Political contributions

MSRB Rule G-37 stops pay-to-play in the municipal market. A dealer that gives to an official of a municipal issuer may not do negotiated municipal securities business with that issuer for two years.

A municipal finance professional (MFP) is an associated person who sells municipal securities to issuers, solicits municipal business, or supervises someone who does. One MFP's contribution triggers the same two-year ban on the whole dealer.

The de minimis exception protects small local donations. An MFP may give up to $250 per election, and only to a candidate the MFP may vote for. Both conditions must hold. Dealers file Form G-37 with the MSRB each quarter.

Personal events you must disclose

Four kinds of personal trouble go on your Form U4 and show up on BrokerCheck:

• A felony charge or conviction. The charge alone is reportable, so you do not wait for a verdict.
• A financial misdemeanor charge or conviction: securities, false statements, bribery, perjury, forgery, theft, or extortion.
• An unsatisfied judgment or lien against you.
• A personal bankruptcy or a compromise with creditors within the past ten years.

Amend your Form U4 within 30 days of learning the facts. When the event is a statutory disqualification, the deadline drops to 10 days.

Statutory disqualification comes from Section 3(a)(39) of the Securities Exchange Act of 1934. A felony conviction in the past ten years disqualifies you, and so does a conviction for a listed financial misdemeanor.

Your firm runs its own clock. FINRA Rule 4530 makes it report these events within 30 calendar days of knowing, or of when it should have known.

How this gets tested

Most items give a fact pattern and ask what the person must do first. The answer is almost always prior written notice to the firm.

The rest are number questions. Sort them by rule:

• $300, the gift limit per person per year.
• $250 and a vote, the MFP allowance per election.
• Two years, the municipal business ban.
• Ten years, the felony conviction and bankruptcy look-back.
• 30 days, the Form U4 amendment deadline.