The Federal Reserve Board ("FRB") announced a new rule set applicable to FRB policymakers and senior staff that will prohibit them from (i) purchasing individual stocks, (ii) investing in individual bonds and in agency securities and (iii) entering into derivatives.
The FRB stated that the new rules will limit senior Federal Reserve officials to purchasing diversified investment vehicles (e.g., mutual funds) and require Reserve Bank presidents to publicly disclose financial transactions within 30 days.
Commentary
In its press release, the FRB mentioned this rule set occurred after comprehensive review of its trading and ethics rules. The review was prompted by scrutiny of recent trading activity of the former Presidents of the Federal Reserve Banks of Boston and Dallas. The new rules eliminate a number of the distinctions that previously existed between Governors and Staff at the Board of Governors (often having the stricter rules) and senior officials at the Federal Reserve Banks.
Primary Sources
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.