05-2776. Rules of Organization

AGENCY:

Federal Open Market Committee.

ACTION:

Notice; amendment to Rules of Organization.

SUMMARY:

The Federal Open Market Committee (the “Committee”) has amended its Rules of Organization to provide that the annual terms of Reserve Bank representatives on the Committee shall begin on the date of the Committee's first regularly scheduled meeting of each calendar year (rather than January 1 of each year). The Committee also has made other minor and technical amendments to its Rules of Organization to conform the rules to current practice and to make the rules gender-neutral.

DATES:

The amendments to the Rules of Organization became effective on February 2, 2005.

FOR FURTHER INFORMATION CONTACT:

Kieran J. Fallon, Assistant General Counsel (202-452-5270), April Snyder, Attorney (202-452-3099), Legal Division; Board of Governors of the Federal Reserve System; or Deborah J. Danker, Deputy Secretary (202-452-3253), Federal Open Market Committee, 20th Street and Constitution Avenue, NW., Washington, DC 20551. Users of Telecommunication Device for Deaf (TTD) only, call [phone].

SUPPLEMENTARY INFORMATION:

The Committee is composed of the members of the Board of Governors of the Federal Reserve System and five representatives of the Federal Reserve Banks. The Reserve Bank representatives on the Committee are elected annually in the manner set forth in section 12A of the Federal Reserve Act (12 U.S.C. 263(a)). An alternate also is elected annually for each Reserve Bank representative, and the alternate serves on the Committee in the absence of the relevant Reserve Bank representative.^[1] The Federal Reserve Act authorizes the Board to prescribe regulations governing the details of the elections of Reserve Bank representatives and alternates.^[2]

The Committee has amended its Rules of Organization to provide that the annual terms of the Committee's Reserve Bank members (and alternates) shall begin on the date of the Committee's first regularly scheduled meeting of each calendar year (rather than on January 1st of each year). With this change, the annual terms of the Committee's Reserve Bank representatives (and alternates) will run from the Committee's first regularly scheduled meeting of a calendar year to the Committee's first regularly scheduled meeting of the next calendar year. The amendment synchronizes the terms of the Reserve Bank representatives (and alternates) with the terms of the Committee's officers and staff, who currently are elected annually at the Committee's first regularly scheduled meeting of each year.

The Committee also has amended its Rules of Organization to clarify that the Committee's officers and staff are elected at the Committee's first regularly scheduled meeting of each year, and to reflect the fact that the Committee currently appoints only one Manager for the System Open Market Account. These changes conform the rules to the Committee's current practice. Finally, the Committee has modified sections 2(b), 4(b), and 5 of its Rules of Organization to make the rules gender-neutral.

The Committee has incorporated the amendments into the Committee's Rules of Organization. The Committee's Rules of Organization are uncodified regulations for use by the Committee, issued pursuant to 5 U.S.C. 552. Because the amendments relate solely to the internal organization, procedure or practice of the Committee, the public notice, public comment, and delayed effective date provisions of the Administrative Procedure Act do not apply.^[3]

For the reasons discussed above, the Committee has amended its Rules of Organization as follows:

1. Section 2(b) of the Rules of Organization is revised to read as follows:

Section 2—Composition of Committee

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(b) Reserve Bank representatives. The representatives of the Federal Reserve Banks, and an alternate for each representative, are elected by the boards of directors of the Reserve Banks in accordance with section 12A of the Federal Reserve Act (12 U.S.C. 263) for annual terms commencing on the date of the first regularly scheduled meeting of the Committee occurring on or after January 1 of each year. Prior to the first regularly scheduled meeting of the Committee on or after January 1 of each year, each member of the Committee representing the Federal Reserve Banks shall cause a record of the member's election and of the election of the member's alternate to be forwarded to the secretary of the Committee. If any question is raised as to the election or eligibility of a member or alternate, the Committee determines such question before such member or alternate participates in a meeting of the Committee. In the event a member is absent from a meeting of the Committee, the member's alternate, in attending the meeting, shall have the same status as the member for whom the alternate is serving. If a member or alternate ceases to be a president or first vice president of a Reserve Bank, a successor may be chosen in a special election by the boards of directors of the appropriate Reserve Bank or Banks and such successor serves until the next annual election.

* * * * *

2. The first sentence of § 3 of the Rules of Organization is revised to read as follows:

Section 3—Chairman and Vice Chairman

At its first regularly scheduled meeting on or after January 1 of each year, the Committee elects a chairman and a vice chairman from among its membership.* * *

3. Paragraphs (a) and (b) of § 4 of the Rules of Organization are revised to read as follows:

Section 4—Staff

(a) Selection of staff officers. At its first regularly scheduled meeting on or after January 1 of each year, the Committee selects, from among the officers and employees of the Board and the Federal Reserve Banks, the following staff officers to serve until the first regularly scheduled meeting on or after January 1 of the next following year: secretary, deputy secretary, and one or more assistant secretaries; general counsel, deputy general counsel, and one or more assistant general counsels; economists, one or more of whom may be designated as senior or associate economists or given titles reflecting their areas of particular specialization; and such other officers as the Committee might wish from time to time.

(b) Secretary and deputy and assistant secretaries. The secretary keeps minutes of actions and records of discussions at all meetings of the Committee; maintains a complete record of the actions taken by the Committee upon all questions of policy relating to open market operations; and records the votes taken in connection with the determination of open market policies and the reasons underlying each such action. The secretary has custody of such minutes and records, and performs such other duties as the Committee may require. In the absence of the secretary of the Committee, the deputy secretary or an assistant secretary acts as secretary pro tem.

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4. Section 5 of the Rules of Organization and its heading are revised to read as follows:

Section 5—Manager

The Committee selects a Manager of the System Open Market Account. The foregoing shall be satisfactory to the Federal Reserve Bank selected by the Committee to execute open market transactions for such Account and shall serve at the pleasure of the Committee. The Manager keeps the Committee informed on market conditions and on transactions made for such Account and renders such reports as the Committee may specify.

By order of the Federal Open Market Committee, February 8, 2005.

Vincent R. Reinhart,

Secretary, Federal Open Market Committee.

Footnotes

1.  Each Reserve Bank representative and alternate must be a president or first vice president of a Reserve Bank.

2.  See 12 U.S.C. 263(a).

3.  See 5 U.S.C. 553(b) and (d).