Authorities approved the new restrictive rules on Friday as a way to build public trust and ensure officials adhere to ethical guidelines.
The United States Federal Reserve (FED) is adopting new restrictions on the investments that its officials can make.
As reported by the media CNBC and fortunethe central bank of the North American nation has announced new rules that will prohibit its employees from trading a number of assets, including bonds, stocks, and cryptocurrencies.
The Federal Open Market Committee (FOMC) approved the new rules this week. The regulation, which had been initially announced in October of last year, will come into effect on May 1. The new restrictions come in response to recent controversy surrounding the officials’ dubious investment practices.
The rules “are intended to support public confidence in the impartiality and integrity of the Committee’s work by avoiding even the appearance of any conflict of interest”, the Fed said in a Friday statement quoted by fortune. Federal Reserve Chairman Jerome Powell added:
These new stringent rules raise the bar in assuring the public we serve that all of our top officials maintain a single focus on the Federal Reserve’s public mission.
Fed officials will not be able to buy Bitcoin
According to reports, the ban will be extended to top policymakers, such as those on the FOMC, along with senior staff.
The move will apply to regional bank presidents and a host of other officials, including staff officers, bond desk managers and Fed employees who regularly attend board meetings. They also extend to spouses and minor children.
The new rules replace existing regulations that, while somewhat restrictive, still allowed officials such as regional presidents to buy and sell shares. Also, they have expanded the initial restrictions laid out in the October document to include cryptocurrencies such as Bitcoin. fortune he cited the rules, which include a variety of assets:
Officials are prohibited from owning individual stocks, sector funds, agency securities, bonds, commodities, cryptocurrencies, foreign currencies and derivative contracts, and from engaging in short sales or buying securities on margin.
According to the report from that outlet, the new rules also require officials to issue a 45-day notice for transactions. They must receive approval prior to any purchase and sale. It also expressly prohibits transactionsduring periods of increased stress in financial markets“.
Authorities added in statements to reporters that any violations will be reviewed on a case-by-case basis. However, they did not provide details on the possible sanctions that could be applied to employees who do not violate the measures.
Measures seek to guarantee ethical practices
Officials who still hold positions in the market will have 12 months to get rid of the prohibited positions. For his part, hehe new FED officials will have six months to do so.
The approval of the stricter measures comes after it was revealed in 2020 that three senior FED officials had engaged in unusual trading activity that raised questions about ethical compliance when the central bank intervened with economic policies to deal with the COVID-19 pandemic situation.
The middle fortune recalls that disclosures showed that the bank’s vice president, Richard Clarida sold at least $1 million worth of shares in February 2020, before buying a similar amount of the same fund a few days later, on the eve of a major FED announcement on measures to cushion the economic crisis. Clarida resigned in January of this year.
The presidents of the Fed of Boston and Dallas, Eric Rosengren and Robert Kaplan, respectively, resigned last year after similar scandals. Rosengren’s 2020 financial disclosure showed multiple transactions in real estate investment trusts, including as the Federal Reserve intervened in that sector of the economy through massive purchases of mortgage-backed securities. Kaplan, former senior executive of Goldman Sachsdisclosed multiple transactions of more than $1 million that year.
as you pointed out CNBCthe US Congress has also been debating a measure that will also restrict its members from owning individual shares, although it has not yet been adopted.
Article by Hannah Estefanía Pérez / DailyBitcoin
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