Fed Restricts Trading by Senior Officials After Scandal

The Federal Reserve has introduced new, stringent trading rules for senior officials to prevent conflicts of interest and assure public trust. These rules prohibit the trading of individual stocks, bonds, and derivatives, allowing only diversified investments like mutual funds. Officials must provide a 45-day notice for trades, obtain approval, and hold securities for at least a year. The changes follow concerns over past trading activities by Fed governors and aim to prevent trading on inside information.

What is the main purpose of the new trading rules introduced by the Federal Reserve?

• To reduce the reporting timeline for trades

• To enhance transparency and limit active trading

• To allow senior officials to trade freely

• To increase the number of trades by senior officials

Which types of investments are senior officials allowed to hold under the new rules?

• Individual stocks

• Diversified investments like mutual funds

• Individual bonds

• Derivatives

What is the minimum holding period for securities under the new rules?

• 30 days

• 6 months

• 2 years

• 1 year

How do the new rules compare to the previous regulations?

• They have not changed significantly

• They allow more flexibility in trading

• They are stricter and more comprehensive

• They are more lenient

What is the significance of the 45-day notice requirement in the new rules?

• It shortens the time for trade approval

• It increases the frequency of trades

• It allows officials to trade based on market predictions

• It ensures decisions are made without market influence