[Code of Federal Regulations]
[Title 45, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 45CFR73.735-802]

[Page 179-180]
 
                        TITLE 45--PUBLIC WELFARE
 
                           AND HUMAN SERVICES
 
PART 73--STANDARDS OF CONDUCT--Table of Contents
 
                      Subpart H--Financial Interest
 
Sec. 73.735-802  Executive order prohibitions.

    (a) Basic prohibition of Executive Order 11222. (1) An employee 
shall not have a direct or indirect financial interest that conflicts 
substantially, or appears to conflict substantially, with his or her 
duties as a Federal employee.
    (2) An employee need not have a financial interest that actually 
conflicts with his or her duties to violate the prohibition of E.O. 
11222. Any financial interest that could reasonably be viewed as an 
interest which might compromise the employee's integrity, whether or not 
this is in fact true, is subject to this prohibition.
    (3) Except as provided in Sec. 73.735-802 (b) and (c), an employee 
who has an indirect financial interest in a business entity through the 
ownership of shares in a widely-held mutual fund or other regulated 
investment company will not violate E.O. 11222. Stocks in business 
entities held by an intermediary such as a mutual fund are generally too 
remote or inconsequential to affect the integrity of an employee's 
services.
    (b) Employees in regulatory activities. (1) An employee who is 
working in a regulatory activity shall not have a financial interest in 
any company whose business activities are subject to the regulations of 
the particular activity with which the employee is associated, unless 
the regulated activities of the company are an insignificant part of its 
total business operations.
    (2) An employee working in a regulatory activity may not hold shares 
in a mutual fund or other regulated investment company which specializes 
in holdings in industries that are regulated by the particular activity 
in which he or she is employed.

    Example: An employee working for the Bureau of Laboratories, Centers 
for Disease Control, may not hold shares in a regulated investment 
company which specializes in holdings that include medical testing 
laboratories.


[[Page 180]]


    (c) Employees having procurement or contracting responsibilities.
    (1) An employee who serves as a procurement or contracting officer 
shall not have a financial interest in a company or companies with which 
he or she in the course of his or her official duties would be likely to 
have procurement or contracting relationships.
    (2) A procurement or contracting officer may not hold shares in a 
mutual fund or other regulated investment company that specializes in 
holdings in industries with which such officer would be likely to have 
procurement or contracting relationships.

    Example: A contracting officer in the Social Security Administration 
owns shares in the XYZ Mutual Fund which specializes in stock in firms 
manufacturing electronic data processing equipment. Ownership of XYZ 
Mutual Fund shares would be prohibited in this instance. On the other 
hand, a contracting officer for a Public Health Service hospital, who is 
not likely to have responsibility for major contracts relating to 
electronic data processing, could hold such shares.