II 

117TH CONGRESS 

1ST SESSION S. 564 

To prohibit Members of Congress from purchasing or selling certain 

investments, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 3, 2021 

Mr. MERKLEY (for himself, Mr. WARNOCK, and Mr. BROWN) introduced the 

following bill; which was read twice and referred to the Committee on 

Homeland Security and Governmental Affairs 

A BILL 

To prohibit Members of Congress from purchasing or selling 

certain investments, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Ban Conflicted Trad5 ing Act’’. 

6 SEC. 2. DEFINITIONS. 

7 In this Act— 

8 (1) the term ‘‘commodity’’ has the meaning 

9 given the term in section 1a of the Commodity Ex10 change Act (7 U.S.C. 1a); 


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1 (2) the term ‘‘covered investment’’— 

2 (A) means investment in a security, a com3 modity, or a future, or any comparable eco4 nomic interest acquired through synthetic 

5 means such as the use of a derivative; and 

6 (B) does not include— 

7 (i) a widely held investment fund de8 scribed in section 102(f)(8) of the Ethics 

9 in Government Act of 1978 (5 U.S.C. 

10 App.); or 

11 (ii) a United States Treasury bill, 

12 note, or bond; 

13 (3) the term ‘‘covered person’’ means— 

14 (A) a sitting Member of Congress; and 

15 (B) an individual employed as an officer or 

16 employee of Congress required to file a report 

17 under the Ethics in Government Act of 1978 (5 

18 U.S.C. App.); 

19 (4) the term ‘‘future’’ means a financial con20 tract obligating the buyer to purchase an asset or 

21 the seller to sell an asset, such as a physical com22 modity or a financial instrument, at a predetermined 

23 future date and price; and 


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1 (5) the term ‘‘security’’ has the meaning given 

2 the term in section 3(a) of the Securities Exchange 

3 Act of 1934 (15 U.S.C. 78c(a)). 

4 SEC. 3. PROHIBITIONS. 

5 (a) TRANSACTIONS.—Except as provided in sections 

6 4 and 5, no covered person may— 

7 (1) purchase or sell any covered investment; or 

8 (2) enter into a transaction that creates a net 

9 short position in any security. 

10 (b) POSITIONS.—A covered person may not serve as 

11 an officer or member of any board of any for-profit asso12 ciation, corporation, or other entity. 

13 SEC. 4. EXCEPTIONS. 

14 (a) INVESTMENTS HELD BEFORE TAKING OF15 FICE.— 

16 (1) IN GENERAL.—A covered person may have 

17 control over or knowledge of the management of any 

18 covered investment held by the covered person as of 

19 the day before the date on which the covered person 

20 took office. 

21 (2) PROHIBITION ON PURCHASING OR SELL22 ING.—A covered person may not buy or sell any in23 vestment described in paragraph (1) except in the 

24 case of— 


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1 (A) placing the investment in a qualified 

2 blind trust described in section 5; or 

3 (B) divesting themselves of any investment 

4 under subsection (b). 

5 (b) DIVESTITURE.—A covered person may sell a cov6 ered investment during the 6-month period beginning 

7 on— 

8 (1) the date on which the covered person takes 

9 office or begins employment, as applicable; or 

10 (2) the date of enactment of this Act. 

11 SEC. 5. TRUSTS. 

12 (a) IN GENERAL.—On a case-by-case basis, the Se13 lect Committee on Ethics may authorize a covered person 

14 to place their securities holdings in a qualified blind trust 

15 approved by the committee under section 102(f) of the 

16 Ethics in Government Act of 1978 (5 U.S.C. App.). 

17 (b) BLIND TRUST.—A blind trust permitted under 

18 this subsection shall meet the criteria in section 

19 102(f)(4)(B) of the Ethics in Government Act of 1978 (5 

20 U.S.C. App.), unless an alternative arrangement is ap21 proved by the Select Committee on Ethics. 

22 SEC. 6. ADMINISTRATION AND ENFORCEMENT. 

23 (a) ADMINISTRATION.— 

24 (1) IN GENERAL.—The provisions of this Act 

25 shall be administered by the Select Committee on 


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1 Ethics of the Senate and the Committee on Ethics 

2 of the House of Representatives. 

3 (2) GUIDANCE.—The Select Committee on Eth4 ics of the Senate and the Committee on Ethics of 

5 the House of Representatives are authorized to issue 

6 guidance on any matter contained in this Act, in7 cluding— 

8 (A) whether a covered person may hold an 

9 employee stock option, or similar instrument, 

10 that had not vested before the date on which 

11 the covered person was elected; and 

12 (B) the process and timeline for when a 

13 covered person shall no longer serve as an offi14 cer or member of any board of any for-profit 

15 association, corporation, or other entity. 

16 (b) ENFORCEMENT.—Whoever knowingly fails to 

17 comply with this Act shall be subject to a civil penalty 

18 of not less than 10 percent of the value of the covered 

19 investment that was purchased or sold or the security in 

20 which a net short position was created in violation of this 

21 Act, as applicable. 

Æ 


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