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 was the reason for the implementation of these new trading rules?

How do the new rules compare to the previous regulations regarding trading by Fed officials?