[Federal Register Volume 64, Number 235 (Wednesday, December 8, 1999)]
[Rules and Regulations]
[Pages 68615-68616]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-31726]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 64, No. 235 / Wednesday, December 8, 1999 /
Rules and Regulations
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FEDERAL RESERVE SYSTEM
5 CFR Part 6801
RIN 3209-AA15
Supplemental Standards of Ethical Conduct for Employees of the
Board of Governors of the Federal Reserve System
AGENCY: Board of Governors of the Federal Reserve System (Board).
ACTION: Final rule; amendment.
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SUMMARY: The Board of Governors of the Federal Reserve System, with the
concurrence of the Office of Government Ethics (OGE), is amending the
Supplemental Standards of Ethical Conduct for Employees of the Board.
This amendment would: eliminate the general prohibition on ownership of
stock in primary dealers for most Board employees; and expand the
availability of stock ownership waivers by allowing waivers to be
granted permitting Board employees to retain bank stock acquired prior
to Federal Reserve employment if the stock does not present a conflict
of interest with the employees' duties.
EFFECTIVE DATE: December 8, 1999.
FOR FURTHER INFORMATION CONTACT: Cary Williams, Managing Senior
Counsel, Legal Division, Board of Governors of the Federal Reserve
System, telephone 202/452-3295, FAX 202/452-3101. For the hearing
impaired only, Telecommunications Device for the Deaf (TDD), Diane
Jenkins, 202/452-3544.
SUPPLEMENTARY INFORMATION: 5 CFR 2635.105 authorizes executive
agencies, with the concurrence of OGE, to publish agency-specific
supplemental regulations necessary to implement their respective ethics
programs. On October 16, 1996, the Board, with OGE's concurrence,
published in the Federal Register a final rule to establish
supplemental standards of ethical conduct for Board employees (61 FR
53827-53830), effective November 1, 1996.
The Board, with OGE's concurrence, now amends its supplemental
standards in two respects:
First, the amendment modifies the prohibition against ownership of
stock in primary government securities dealers to apply only to Board
employees who have ongoing access to highly sensitive information
(Class I) collected in connection with Federal Open Market Committee
(FOMC) deliberations and decisions, and identified as such by the FOMC
Committee. The Board believes that the current prohibition of share
ownership in primary dealers for all Board employees is unnecessarily
broad and that the prohibition properly should be extended only to
those employees where the possibility of the appearance of a conflict
of interest occurs. For that reason, the Board is retaining but
liberalizing this provision, so as to allow such share ownership except
for those Board employees who have ongoing access to Class I FOMC
information.
Second, the amendment explicitly provides for waivers to be granted
permitting Board employees to retain bank stock acquired prior to
Federal Reserve employment if the stock does not present a conflict of
interest with the employees' duties. The current regulation states that
waivers may be available if ownership or control was acquired through
inheritance or gift, as a result of a merger or other change in
corporate structure, or otherwise without specific intent of the
employee, spouse or minor child to acquire the interest. The purpose of
the amendment is to make clear that new Board employees need not, in
every case, divest banking organization stock previously acquired, and
that a waiver may be available if a new employee is not involved in
bank regulatory matters. This revision would not change the existing
prohibition on any current employee (or an employee's spouse or child)
purchasing stock in a depository institution or its affiliate (except
in the case of a spouse in compensation for the spouse's employment).
Matters of Regulatory Procedure
Administrative Procedure Act
Pursuant to 5 U.S.C. 553(a)(2), (b) and (d), the Board has
determined that good cause exists for waiving the regular notice of
proposed rulemaking, opportunity for comment, and 30-day delayed
effective date as to this final rule amendment. This action is being
taken because it is in the public interest that this rule, which
concerns matters of agency organization, practice and procedure and
which relieves certain restrictions placed on Board employees, become
effective on the date of publication.
Regulatory Flexibility Act
The Board has determined under the Regulatory Flexibility Act (5
U.S.C. chapter 6) that this regulation will not have a significant
economic impact on a substantial number of small entities because it
primarily affects Board employees and their families.
Paperwork Reduction Act
The Board has determined that the Paperwork Reduction Act (44
U.S.C. chapter 35) does not apply because this regulation does not
contain any information collection requirements that require the
approval of the Office of Management and Budget.
List of Subjects in 5 CFR Part 6801
Conflict of interests, Government employees.
Dated: November 23, 1999.
Jennifer J. Johnson,
Secretary, Board of Governors of the Federal Reserve System.
Approved: November 30, 1999.
Stephen D. Potts,
Director, Office of Government Ethics.
For the reasons set forth in the preamble, the Board of Governors
of the Federal Reserve System, with the concurrence of the Office of
Government Ethics, is amending 5 CFR part 6801 as follows:
PART 6801--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES
OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
1. The authority citation for part 6801 continues to read as
follows:
Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government
Act of 1978); 12 U.S.C. 244, 248; E.O. 12674, 54 FR 15159, 3 CFR,
1989 Comp., p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR,
1990 Comp., p. 306; 5 CFR 2635.105, 2635.403(a), 2635.502, 2635.803.
[[Page 68616]]
2. Section 6801.103 is amended by:
a. Revising paragraph (a)(2);
b. Redesignating paragraphs (c)(1)(i) and (c)(1)(ii) as (c)(1)(ii)
and (c)(1)(iii), respectively; and
c. Adding a new paragraph (c)(1)(i).
The revision and addition read as follows:
Sec. 6801.103 Prohibited financial interests.
(a) * * *
(2) A primary government securities dealer or any of its
affiliates, if such employee has regular, ongoing access to Class I
Federal Open Market Committee information.
* * * * *
(c) * * *
(1) * * *
(i) Prior to Federal Reserve employment;
* * * * *
[FR Doc. 99-31726 Filed 12-7-99; 8:45 am]
BILLING CODE 6210-01-P
