The United States Federal Reserve on Thursday issued new
guidelines that go on to ban individual stock purchases by top officials at the
central bank. The Federal Reserve also introduced a broad set of other restrictions on the
investing activities of the officials weeks after reports came out about active trading by some senior policymakers and
triggered a backlash about the ethics and conflict of interest in the practice.

According to the new rules, there will be a limit on the types
of financial securities the Fed’s top officials can own. The rules include an
outright ban on purchases of individual stocks. Holding individual bonds is
also prohibited under the new rules. Any such transaction will require advance
notice and approval, and the investments will have to be locked in for at least
a year.

“These tough new rules raise the bar high in order to
assure the public we serve that all of our senior officials maintain a
single-minded focus on the public mission of the Federal Reserve,” Federal
Reserve Board Chair Jerome Powell said a statement reported by Reuters.

In a press release quoted by the Reuters News Agency, the
Federal Reserve said the new rules were designed to “help guard against
even the appearance of any conflict of interest in the timing of investment
decisions.”

The new rules have been introduced after two of the 12
regional Federal Reserve Bank presidents resigned due to reports coming out about
their active trading during 2020. These trades were done around the time when
the Federal Reserve launched a massive effort to fight the economic impacts of
the COVID-19 pandemic.