The Federal Reserve announced Thursday sweeping new rules barring its top officials from owning individual securities and engaging in active trading.
The ban targets Reserve Bank and Board policymakers along with senior staff who will no longer be allowed to hold individual stocks, individual bonds and direct or indirect investments in agency securities, the Federal Reserve said in a Thursday press release.
Federal Reserve’s policymakers will still have a right to purchase diversified assets free of conflict of interest like mutual funds provided that they submit 45 days’ advance notice and hold investments for at least one year.
“Further, no purchases or sales will be allowed during periods of heightened financial market stress,” the press release read. (RELATED: Top Fed Official Traded Millions In Stocks In 2020, Financial Disclosures Show)
@FederalReserve, following a comprehensive review, announces broad set of new rules that will prohibit the purchase of individual securities, restrict active trading & increase timeliness of reporting & public disclosure by Fed policymakers & senior staff https://t.co/GtCGgiiOcL
— Federal Reserve (@federalreserve) October 21, 2021
“These tough new rules raise the bar high in order to assure the public we serve that all of our senior officials maintain a single-minded focus on the public mission of the Federal Reserve,” Federal Reserve Board Chairman Jerome Powell said.
Democratic Sen. Elizabeth Warren demanded on Monday early October that the Securities and Exchange Commission (SEC) investigate “ethically questionable” stock market trades made by Federal Reserve officials during the pandemic.
“This new report comes within weeks of disclosures revealing that Robert Kaplan, President of the Federal Reserve Bank of Dallas, ‘made multiple million-dollar-plus stock trades in 2020,’ and that Eric Rosengren, President of the Federal Reserve Bank of Boston, ‘listed stakes in four separate real estate investment trusts and disclosed multiple purchases and sales in those and other securities,” Warren wrote in a letter to the SEC.