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Fed officials will be banned from owning individual stocks, Jerome Powell says in new guidelines

Federal Reserve announces ban on officials owning individual stocks and limits on other activities.

10/24/2021 9:00:00 AM

Federal Reserve announces ban on officials owning individual stocks and limits on other activities.

Two Fed presidents stepped down last month after disclosures that they had engaged in trading of individual securities last year.

owning individual stocks and limits on other activities as well.The ban includes top policymakers such as those who sit on the Federal Open Market Committee, along with senior staff. Future investments will have to be confined to diversified assets such as mutual funds.

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Fed officials can no longer have holdings in shares of particular companies, nor can they invest in individual bonds, hold agency securities or derivative contracts. The new rules replace existing regulations that, while somewhat restrictive, still allowed members to buy and sell stocks.

“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,” Fed Chair Jerome Powell said in a statement.Under the new rules, the officials will have to provide 45 days’ notice in advance of buying or selling any securities that are still allowed. They also will be required to hold the securities for at least a year, and cannot buy or sell funds during “heightened financial market stress,” a news release announcing the moves said. headtopics.com

The rules come on the heels of disclosures that multiple Fed officials had been buying and selling stocks at a time when the central bank’s policies were designed to improve market functioning, particularly during the Covid crisis.Regional presidents Robert Kaplan of Dallas and Eric Rosengren of Boston both resigned shortly after disclosures that they had engaged in trading of individual securities last year. In Kaplan’s case, the moves occurred in large-dollar allotments.

Vice Chairman Richard Clarida also had been featured in the reports. Powell also sold securities last year, though they were exchange-traded funds that tracked market indexes.The announcement stated that reserve bank presidents will have to disclose transactions within 30 days, a requirement already in place for FOMC members and senior staff. The new rules will be incorporated formally “over the coming months,” the release said.

Jeff Cox, CNBCJeff Cox is a finance editor with CNBC.com where he covers all aspects of the markets and monitors coverage of the financial markets and Wall Street. His stories are routinely among the most-read items on the site each day as he interviews some of the smartest and most well-respected analysts and advisors in the financial world.

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These Rules should also be extended to the House and Senate as should blackouts on Trading when Congress has InsiderInformation on companies. InsiderTrading bans at the Fed ... will they finally apply to Congress profkakie Now Congress. There always the possibility of deferred benefits! More than badly needed; it is absolutely necessary. Let’s see how long it will take for the lawyers to find a loophole around this one.

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Fed imposes sweeping new limits on policymakers' investmentsFederal Reserve policymakers and senior staff will be barred from investing in individual stocks and bonds, after questionable trades led two to resign. good now do congress

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Fed imposes sweeping new limits on policymakers' investmentsFederal Reserve policymakers and senior staff will be barred from investing in individual stocks and bonds, after questionable trades led two to resign. good now do congress

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