Thursday, June 20, 2024

Federal Reserve bans officials from trading cryptocurrencies, stocks, commodities

The Federal Open Market Committee (FOMC), Federal Reserve’s policymaking arm, had adopted new rules for trading by senior central bank officials.

It has banned officials from purchasing individual stocks or sector funds, holding investments in individual bonds, agency securities, cryptocurrencies, commodities, or foreign currencies as well as entering into derivatives contracts, and short sales or purchasing securities on margin.

It has also prohibited purchases and sales during periods of heightened financial market stress. The new rules are an addition to the existing rules that bar Federal Reserve officials from holding bank stocks and Treasury securities. They are also not allowed to engage in any financial transactions during a blackout period around FOMC meetings.

This regulation intends to support public confidence in the impartiality and integrity of the FOMC’s work by guarding against the appearance of a conflict of interest.

The rules are also applicable to regional bank presidents, staff officers, bond desk managers, and Fed employees who regularly attend board meetings. This also includes their spouses and minor children. Moreover, officials must give 45-days’ notice before making permissible asset purchases. They have to hold the positions for at least a year.

This comes months after Robert Kaplan and Eric Rosengren – Federal Reserve governors, left their positions in September 2021 following controversy over personal trades.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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