[Code of Federal Regulations]
[Title 5, Volume 3]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 5CFR6801.103]

[Page 793-794]
 
                    TITLE 5--ADMINISTRATIVE PERSONNEL
 
     CHAPTER LVIII--BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
 
PART 6801--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE 
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM--Table of Contents
 
Sec. 6801.103  Prohibited financial interests.

    (a) Prohibited interests. Except as permitted by this section, an 
employee, or an employee's spouse or minor child, shall not own or 
control, directly or indirectly, any debt or equity interest in:
    (1) A depository institution or any of its affiliates; or
    (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.
    (b) Exceptions. The prohibition in paragraph (a) of this section 
does not apply to the ownership or control of a debt or equity interest 
in the following:
    (1) Nonbanking holding companies. A publicly traded holding company 
that:
    (i) Owns a bank and either the holding company or the bank is exempt

[[Page 794]]

under the Bank Holding Company Act of 1956, 12 U.S.C. 1841 et seq., (for 
example, a credit card bank, a nonbank bank or a grandfathered bank 
holding company), and the holding company's predominant activity is not 
the ownership or operation of banks and thrifts;
    (ii) Owns a thrift and its predominant activity is not the ownership 
or operation of banks and thrifts; or
    (iii) Owns a primary government securities dealer and its 
predominant activity is not the ownership or operation of banks, thrifts 
or securities firms.
    (2) Mutual funds. A publicly traded or publicly available mutual 
fund or other collective investment fund if:
    (i) The fund does not have a stated policy of concentration in the 
financial services industry; and
    (ii) Neither the employee nor the employee's spouse exercises or has 
the ability to exercise control over the financial interests held by the 
fund or their selection.
    (3) Pension plans. A widely held, diversified pension or other 
retirement fund that is administered by an independent trustee.
    (c) Waivers. The Board's Designated Agency Ethics Official, in 
consultation with Division management, may grant a written waiver 
permitting the employee to own or control a debt or equity interest 
prohibited by paragraph (a) of this section if:
    (1) Extenuating circumstances exist, such as that ownership or 
control was acquired:
    (i) Prior to Federal Reserve employment;
    (ii) Through inheritance, gift, merger, acquisition, or other change 
in corporate structure, or otherwise without specific intent on the part 
of the employee, spouse, or minor child to acquire the debt or equity 
interest; or
    (iii) By an employee's spouse as part of a compensation package in 
connection with the spouse's employment or prior to marriage to the 
employee;
    (2) The employee makes a prompt and complete written disclosure of 
the interest;
    (3) The employee's disqualification from participating in any 
particular matter having a direct and predictable effect on the 
institution or any of its affiliates does not unduly interfere with the 
full performance of the employee's duties; and
    (4) Granting the waiver would be consistent with Division policy.
    (d) Disqualification. If an employee or an employee's spouse or 
minor child holds an interest in an entity under paragraph (b)(1) or (c) 
of this section, the employee must consult the Designated Agency Ethics 
Official in order to determine whether the employee must be disqualified 
from participating in any particular matter involving that entity or 
affiliate under the conflicts of interest rules of the Office of 
Government Ethics.

[61 FR 53828, Oct. 16, 1996, as amended at 64 FR 68616, Dec. 8, 1999]