Nasdaq ISE Tweaks Options Rule 27 – Zzz-Inducing Change
Published Date: 9/15/2026
Notice
Summary
No summary available.
Analyzed Economic Effects
6 provisions identified: 3 benefits, 2 costs, 1 mixed.
New supervision and recordkeeping duties
Members must have supervisory systems reasonably designed to achieve compliance with Options 10, Section 27 and must ensure payments/gratuities are (a) reported to the Member, (b) reviewed for compliance with the Rule, and (c) maintained in the Member's records. Members need not keep records for gifts that meet the personal, bereavement, de minimis, promotional, or disaster-related exceptions.
Valuation and aggregation rules for gifts
Members must value most gifts at cost (exclusive of tax and delivery). Tickets for sporting or other events must be valued at the higher of cost or face value. Members must aggregate all gifts given by the Member and each associated person to a particular recipient over the year for compliance with the $300 limit and must state whether aggregation is by calendar year, fiscal year, or rolling basis.
Harmonization with FINRA and 17d-2 inclusion
The Exchange amended Options 10, Section 27 to be substantially similar to FINRA Rule 3220 so that it can be incorporated into the Exchange's Rule 17d-2 agreement with FINRA. The change is intended to reduce duplicative regulation for Members that are also FINRA members.
Gift limit raised to $300/year
The Exchange raised the gift limit in Options 10, Section 27 from $100 to $300 per individual per year. The Exchange says the $300 limit accounts for inflation since 1992 and about ten years of expected future inflation.
Exchange may grant rule exemptions
The Exchange will be able to conditionally or unconditionally grant exemptions from any provision of Options 10, Section 27 for good cause, provided the exemption is consistent with the Rule's purpose, investor protection, and the public interest. This authority mirrors FINRA's new Rule 3220(d) and is tied to General 5, Section 3.
Several common exemptions clarified
The rule expressly excludes from the $300 limit and recordkeeping requirements: customary personal gifts for infrequent life events, bereavement gifts that are customary and reasonable, de minimis promotional items (e.g., pens, tote bags) substantially below $300, and donations to individuals for losses from Presidentially declared major disasters (e.g., wildfire, hurricane, tornado, earthquake, flood). It also states the Rule does not apply to gifts from a Member to its own associated persons or to gifts to individual retail customers.
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