The main aim of these rules and regulations that were imposed on the members of the Federal Reserve was to include that public confidence was supported and proper guidance was provided to safeguard the community against different conflicts and problems for sure. There have been pretty huge speculations regarding the role of the Federal Reserve in the development of the crypto world for sure. However, according to crypto news current, there are some new rules for the senior officials who are a part of the Federal Reserve for sure.
The Federal Open Market Committee more commonly known as FOMC has provided and also approved of some important rules that would actually ban the senior officials posted at the Federal Reserve from making any transactions with cryptocurrencies for sure. This means all the senior officials present in the Federal Reserve will not be allowed to purchase or hold any particular investments or cryptocurrency.
The news definitely shook the community of crypto and hence there are different verdicts being made for sure. According to the officials, these rules were actually meant to ensure that the public would trust the government, and hence there would be no conflict of interest in the community as well.
This Friday, the announcement has been made by the FOMC that starting from the 1st of May, all the senior officials who are a part of the Federal Reserve that are working at the particular agency would be provided with a time period of just 1 year in order to dispose of different impermissible holdings. The new officials on the other hand will just be provided with 6 months to do the exact same thing.
These new regulations that have been introduced by the FOMC specify that all the senior officials of the Fed include the first research directors and vice presidents of Reserve Bank, staff officers of FOMC, deputy manager, Board division directors, as well as the System Open Market Account Manager are to be prohibited from trading or purchasing cryptocurrency.
These individuals that were designated by the Fed chair, and their spouses and children under 18 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.”
Under the rules, starting on July 1, the purchasing and selling of securities will be permitted with 45 days’ notice, prior approval, and agreement to hold the investment for at least one year. In addition, officials are also prohibited from purchasing and selling during “periods of heightened financial market stress.” Reserve Bank presidents will have 30 days to disclose securities transactions, which will be available to the public “promptly” on their respective Fed websites.
“The Federal Reserve expects that additional staff will become subject to all or parts of these rules after the completion of further review and analysis,” said the announcement.
According to the FOMC, the change in rules — first announced in October 2021 — was intended 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 Federal Reserve Board will also vote on including the changes in codes of conduct at Reserve Banks.
Many U.S. lawmakers have called for legislation to prohibit members of Congress from owning or trading stocks, citing similar concerns. Under the 2012 Stop Trading on Congressional Knowledge Act or STOCK Act, lawmakers are permitted to buy and trade stocks and other investments while in office but are also bound to disclose such actions or face financial penalties.