Beijing, 22 Oct (Xinhua) -- The US Federal Reserve Board announced new regulations on 21 October restricting the purchase of stocks and bonds by policymakers and high-level officials of the US central bank.
The Fed has also pledged to increase the frequency of reporting and public disclosure of relevant information.
CNN reported that the new rules mean Fed officials will be restricted in buying common investment vehicles such as mutual funds.
U.S. Federal Reserve Chairman Jerome Powell attends a congressional hearing in Washington on June 22. (Xinhua News Agency, photo by Graeme Jennings)
Fed Chairman Jerome Powell said the new rules are designed to raise the bar "to reassure the public we serve that all senior officials at our agency are single-mindedly focused on the Fed's public mission."
To avoid any "even superficial" conflict of interest among these individuals in terms of timing, policymakers and officers will be required to inform the Fed 45 days in advance to buy and sell securities, which can only be bought and sold after approval and held for at least a year.
In addition, during periods of high financial market tension, these people are "not allowed to buy or sell."
Traders work on the New York Stock Exchange on May 12. (Xinhua News Agency, courtesy of the New York Stock Exchange)
The Fed said the restrictions would apply to governing boards as well as regional Fed officials. The new policy will restrict individual holding of bonds, access to the derivatives market or investment in government bond.
The Fed's new rules come as the Boston Fed president and Dallas Fed president take early retirement over the criticism of their stock trading. As part of the new rules, regional Fed leaders will be required to publicly disclose relevant information within 30 days of financial transactions.
Democratic Senator Elizabeth Warren wrote on social media Twitter on the 21st that individual trading of stocks by Fed officials should be included in illegal behavior.
Dennis Kelleher, ceo of the Association for the Improvement of Markets, a nonprofit that advocates financial reform, said: "The Fed's announcement today is long overdue, a good start, but not enough. ”
Kelleher believes the new rules should apply to everyone in the Fed who has news of potential market movements. He suggested that all senior officials at the agency, including the Fed chairman, put all their investments into a confidential trust and not trade them. (Bu Xiaoming)
Source: Xinhua News Agency