Gifts Or A Regulation Fine?

Christmas is just around the corner.?

While many of us will have already checked for the holidays and mentally be sitting around a festive feast with our families, in the corporate world these holidays also hold a space for gift giving.?

Giving and receiving gifts to and from teams, referral partners and clients is a wonderful feeling and can strengthen the bonds between people.?

However, where do you draw the line at what’s an acceptable gift and what’s too much??

This is where gifting policies come into place.?

They outline what is acceptable to give but also what is acceptable to receive.?

Now let’s look at why each of these parts is important.?

Giving Gifts

There are a few reasons why gift giving is important both within the business and to outside clients, referral partners, and employees.?

Within the business, making sure the gifts are given equally or not at all is one way to ensure equal treatment of clients.?

Whether we like it or not, choosing to give gifts to some clients and not others around this time of year can be seen as a form of unfair treatment or favoritism. Choosing to give more expensive gifts to some clients rather than others can also be problematic.? You don’t want any one gift to be so large as to create undue influence on your clients.?

A great way to avoid this is a price cap, or instead of gift giving holding an event for the whole team.?

You also need to remind team members not to give large gifts to supplies, clients or contractors as in some cases this can be viewed as a bribe. We’ll break this down a little more in the next section.?

Receiving Gifts?

When it comes to receiving gifts from clients or even more junior staff the biggest thing you need to consider is whether it is a gift… or a bribe.?

The basic principle to distinguish between the two is this.?

A gift is something that is given without any expectation of reciprocation or reward for giving the gift.?

A bribe on the other hand has an anticipated action that will occur after the bribe has been accepted.?

So if you are giving or receiving a gift and knowing that a certain course of action will occur because you are giving that gift, then it could be viewed as a bribe.?

A great way to avoid this from happening in your company is to put a cap on the value of gifts that can be accepted. Or alternatively, having your Chief Compliance Officer review any gifts that are given over a certain monetary value (for example $100).

Common Gift Policies

Some common things companies place in their gift policies are.?

1. No gifts over $100 in value.?
2. No receiving gifts from external sources.?
3. If gifting to team members, each member must receive something of similar value.?
4. No in-office gifts over $10 in value.?
5. Gifts over a certain amount must be reported to the Chief Compliance Officer.?

While some of these may seem harsh compared to not having a policy at all, at the end of the day these policies are here to protect you and your business.

And if you do already have a gift policy in place, make sure to review it with your employees around this time of year to make sure everyone is aware of any policy updates or changes.?

If you are looking to outsource your CCO services before you get hit with a noncompliance notice, then why not send me a message and we can see if the Compliance team at My RIA Lawyer could be a good fit for your compliance needs.