The Federal Open Market Committee, or FOMC, has approved rules that prohibit high-ranking Federal Reserve officials from buying and holding cryptocurrency and other investments.
In a statement on Friday, the FOMC said that starting May 1, the agency’s top Fed officials will have one year to “dispose of all unauthorized assets” and the new officials will have six months. The new rules specify that senior Federal Reserve officials, including senior Fed vice presidents and research directors, FOMC chiefs of staff, the Open System Market Director and Executive Vice President, directors of board divisions, who regularly attend meeting committees, and FRS nominees and their spouses And 18 children are:
“Prohibit the purchase of individual stocks or industry funds; investing in individual bonds, agency securities, cryptocurrencies, commodities, or foreign currencies; entering into derivative contracts; and entering into short selling or the buying of securities on margin.”
According to the rules, from July 1, the sale and purchase of securities will be allowed with 45 days’ notice, prior approval and an investment custody agreement for at least one year. In addition, officials have also imposed a ban on buying and selling during “periods of increased stress in the financial market.” Reserve bank chiefs will have 30 days to disclose the securities transactions, which will be publicly available “immediately” on their Fed websites.
“The Federal Reserve expects that the additional staff will be subject to all or part of these rules upon completion of further review and analysis,” the statement said.
According to the Federal Open Market Committee, the rule change, which was first announced in October 2021, was aimed at “supporting public confidence in the impartiality and integrity of the committee’s work, and preventing even the emergence of any conflict of interest.” The Federal Reserve will also vote to amend the Reserve Banks Code of Conduct.
On the subject: Members of the House of Representatives demand an end to the trading of shares. Cryptocurrency then?
Several US lawmakers have called for legislation that would prevent members of Congress from owning or trading shares, citing similar concerns. Under the Congressional Cessation of Trading in Knowledge or Stock Act of 2012, lawmakers are allowed to buy and sell stocks and other investments while in power, but are also required to disclose such activities or face financial penalties.
