Fed imposes new rules to restrict trading activity from its hierarchies

The Federal Reserve (Fed) from USA, announced new rules that strongly restrict the investments authorized to its hierarchs, after disclosing transactions of its members that led some to resign.

These new rules “prohibit them from buying individual shares”, carry out transactions “during periods of high tension in the financial markets”, and require them to request authorizations before purchases and sales, as well as to declare them more frequently.

It is about “helping to prevent even the appearance of a conflict of interest,” the institution said in a statement.

“These tougher new rules raise the bar to assure the public we serve that our top officials remain focused on the public mission of the Federal Reserve,” stated Fed Chairman Jerome Powell.

Powell came under fire this week after documents were released showing he made between $ 1 million and $ 5 million from the stock sale in October 2020, just before a sharp drop in the U.S. market the next day. .

These securities, however, were part of an index fund, which brings together several companies listed in the United States, and is not tied to any particular sector.

Two other top officials recently resigned after it was revealed that they traded individual stocks last year, as the Fed sought to sustain the economy amid the pandemic crisis.

Under the new rules, senior Fed officials must give 45 days’ notice for purchases and sales of shares, have authorization before making them, and will have the obligation to maintain these investments for at least one year.

They must also make more regular statements of their operations.

Fed Vice President Richard Clarida also declared transactions of a significant amount, carried out in February 2020, at the beginning of the pandemic, just before the Fed lowered its benchmark rates to sustain the economy.

The chairmen of the Fed’s regional affiliates in Dallas, Robert Kaplan, and Boston, Eric Rosengren, resigned.