WASHINGTON, Oct 21 (Reuters) - The U.S. Federal Reserve on
Thursday banned individual stock purchases by top officials at
the central bank and unveiled a broad set of other restrictions
on their investing activities roughly six weeks after reports of
active trading by some senior policymakers triggered an ethics
Following is a full text of the Fed's announcement:
Following a comprehensive review, the Federal Reserve Board
on Thursday announced a broad set of new rules that will
prohibit the purchase of individual securities, restrict active
trading, and increase the timeliness of reporting and public
disclosure by Federal Reserve policymakers and senior staff. As
a result of the new policies, senior Federal Reserve officials
will be limited to purchasing diversified investment vehicles,
like mutual funds.
The new restrictions will apply to both Reserve Bank and
Board policymakers and senior staff and prohibit them from
purchasing individual stocks, holding investments in individual
bonds, holding investments in agency securities (directly or
indirectly), or entering into derivatives. The new rules are
expansive and are designed to place the Federal Reserve's
investment and trading rules at the forefront among major
"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," said Federal Reserve Board Chair Jerome H. Powell.
To help guard against even the appearance of any conflict of
interest in the timing of investment decisions, policymakers and
senior staff generally will be required to provide 45 days'
advance notice for purchases and sales of securities, obtain
prior approval for purchases and sales of securities, and hold
investments for at least one year. Further, no purchases or
sales will be allowed during periods of heightened financial
Reserve Bank presidents now will be required to publicly
disclose financial transactions within 30 days, as Board Members
and senior staff currently do.
The Board and the Reserve Banks will incorporate these new
restrictions into the appropriate Federal Reserve rules and
policies over the coming months.
(U.S. economics team)