Fed has banned the investments of its senior officials
February 19th, 2022
The US Federal Reserve (Fed) has banned the investments of its senior officials such as stocks, bonds, cryptocurrencies, foreign exchange, and commodities.
A series of rules governing policymakers’ investment activity were adopted, according to a statement released by the Fed.
The guidelines in question are intended to enhance the public’s confidence in the Federal Open Market Committee’s impartiality and integrity, according to the statement (FOMC). The announcement claimed that the purchase of individual stocks or funds by individuals is prohibited.
The guidelines in question, according to the statement, are intended to boost public trust in the Federal Open Market Committee’s impartiality and integrity (FOMC). The authorities also banned investments in bonds, cryptocurrencies, commodities, or foreign exchange, according to the statement, which claimed that purchasing individual stocks or funds by senior Fed officials was illegal under these regulations.
The authorities were forbidden from getting into derivative contracts, selling short, or buying assets on margin, according to the statement.
ANY TRANSACTIONS OF FED OFFICIALS WILL BE REQUIRED TO GET APPROVAL
The Fed officials were required to inform 45 days in advance for the purchase and sale of securities, and approval should be acquired before such transactions, with investments lasting at least one year, according to the statement.
Buying and selling would be forbidden during periods of increased market stress, according to the statement.
Members of the board of directors, regional Fed presidents, vice presidents, research directors, FOMC personnel, System Open Market Account managers and assistants, board department managers who regularly attend Committee meetings, and individuals designated by the President, as well as their spouses and children, are all subject to the rules. will be reported.
According to the statement, the aforementioned rules will take effect on May 1st, with the exception of the rule regulating preliminary notice and pre-approval of transactions, which will take effect on July 1st.
SOME FED SENIOR OFFICIALS’ INVESTMENT HAS BEEN AGENDA
After it was revealed that several senior Fed officials purchased financial assets at a time when the Fed was aggressively supporting markets to counter the financial impacts of the Covid-19 outbreak, the Fed adopted new rules for senior officials’ investments.
Last year, it was reported in the US press that Fed Chairman Jerome Powell, Boston Fed President Eric Rosengren, Richmond Fed President Thomas Barkin, and Dallas Branch President Robert Kaplan owned some of the bank’s assets that it acquired in 2020.
Kaplan and Rosengren announced that they would retire after news about their investment.
Following the public disclosure of bank officials’ personal portfolios, Fed Chairman Powell has ordered a review of the code of ethics for top Fed officials’ financial assets and activities.
The bank said in October of last year that it would restrict investing operations by banning individual stock purchases by monetary policymakers and senior officials.