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HomeCrypto NewsMarketUS Federal Reserve Officials Banned From Investing In Bonds, Securities, Crypto, Commodities, Forex To Avoid Conflict of Interest

US Federal Reserve Officials Banned From Investing In Bonds, Securities, Crypto, Commodities, Forex To Avoid Conflict of Interest

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The US bans Federal Reserves officials from investing in many financial instruments.



According to a decision by Federal Open Market Committee on Friday, Federal Reserve officials are prohibited from trading or investing in cryptocurrencies and other financial instruments to avoid conflicts of interest.

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This Friday, the Federal Open Market Committee announced that the board has unanimously decided to adopt the new rules for investments in different sectors formally. Under the new regulations, officers and executives of major US financial entities will no longer be able to participate in various investment-related activities.

The report writes:

“Under the new rules, senior Federal Reserve officials are prohibited from purchasing individual stocks or sector funds; holding investments in individual bonds, agency securities, cryptocurrencies, commodities, or foreign currencies; entering into derivatives contracts, and engaging in short sales or purchasing securities on margin.”

The rules are intended to provide the public with impartiality and integrity of the committee’s work to ensure that there is no conflict of interest within crucial members of the board and executive body by holding any financial instruments.

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“Aim to support public confidence in the impartiality and integrity of the Committee’s work by guarding against even the appearance of any conflict of interest.” 

The new rules also require executives to obtain prior approval for any financial transactions and holding investments. Officials would not be allowed to purchase and sell in periods of high market fluctuations.

“Additionally, senior Federal Reserve officials will be required to provide 45 days’ non-retractable notice for purchases and sales of securities, obtain prior approval for such transactions, and hold investments for at least one year. Purchases and sales also will be prohibited during periods of heightened financial market stress.”

Once the new policies take effect, Reserve Bank presidents will have to publish their stock transactions over the past 30 days. The financial reports of the Reserve Bank presidents will be posted publicly on the relevant websites.

“When the new policy takes effect, Reserve Bank presidents will be required to publicly disclose securities transactions within 30 days, as Board members and senior Board staff currently do. In addition, financial disclosures filed by Reserve Bank presidents will be promptly posted on the website of the relevant Reserve Bank.”

The rules do not directly represent any negative position towards the crypto market as regulations are being made to avoid conflicts of interest between officials who can alter the US market for their benefit.

Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.

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Mark Brennan
Mark Brennanhttps://thecryptobasic.com/
Mark Brennan has been active in the cryptocurrency sector since 2014. His love and passion for the nascent industry drove him to develop interest in writing about important developments and updates about cryptocurrencies and blockchain. Brennan, who holds a Masters degree in Business Administration, learned about the potential of blockchain technology. Aside from crypto journalism, Brennan runs an education center, where he educates people about the asset class.

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