§ 5501.104 Prohibited financial interests applicable to employees of the Food and Drug Administration. ( a ) *General prohibition.* Except as permitted by paragraph (b) of this section, no employee or spouse or minor child of an employee, other than a special Government employee or the spouse or minor child of a special Government employee, of the Food and Drug Administration shall have a financial interest in a significantly regulated organization.
( b ) *Exceptions.* Notwithstanding the prohibition in paragraph (a) of this section: ( 1 ) An employee or spouse or minor child of an employee may have a financial interest, such as a pension or other employee benefit, arising from employment with a significantly regulated organization. Note to paragraph ( b
)(1):
FDA employees who file public or confidential financial disclosure reports pursuant to 5 CFR part 2634, as opposed to spouses and minor children of such employees, are generally prohibited under § 5501.106(c)(3) from engaging in current employment with a significantly regulated organization.
( 2 ) An employee who is not required to file a public or confidential financial disclosure report pursuant to 5 CFR part 2634, or the spouse or minor child of such employee, may hold a financial interest in a significantly regulated organization if: ( i ) The total cost or value, measured at the time of acquisition, of the combined interests of the employee and the employee's spouse and minor children in the regulated organization is equal to or less than the *de minimis* exemption limit for matters involving parties established by 5 CFR 2640.202(a) or $15,000, whichever is greater (the phrase “time of acquisition” shall mean the date on which the employee actually acquired the financial interest—or on which the financial interest became imputed to the employee under 18 U.S.C. 208—whether by purchase, gift, bequest, marriage, or otherwise, except that with respect to a financial interest that was acquired prior to the employee's entrance on duty as an employee of the Food and Drug Administration, the “time of acquisition” shall be deemed to be the date on which the employee entered on duty);
( ii ) The holding, if it represents an equity interest, constitutes less than 1 percent of the total outstanding equity of the organization; and
( iii ) The total holdings in significantly regulated organizations account for less than 50 percent of the total value of the combined investment portfolios of the employee and the employee's spouse and minor children.
( 3 ) An employee or spouse or minor child of an employee may have an interest in a significantly regulated organization that constitutes any interest in a publicly traded or publicly available investment fund (e.g., a mutual fund), or a widely held pension or similar fund, which, in the literature it distributes to prospective and current investors or participants, does not indicate the objective or practice of concentrating its investments in significantly regulated organizations, if the employee neither exercises control nor has the ability to exercise control over the financial interests held in the fund.
( 4 ) In cases involving exceptional circumstances, the Commissioner or the Commissioner's designee may grant a written exception to permit an employee, or the spouse or minor child of an employee, to hold a financial interest in a significantly regulated organization based upon a determination that the application of the prohibition in paragraph (a) of this section is not necessary to ensure public confidence in the impartiality or objectivity with which HHS programs are administered or to avoid a violation of part 2635 of this title. Note to paragraph ( b
):
With respect to any excepted financial interest, employees are reminded of their obligations under 5 CFR part 2635, and specifically their obligation under subpart D of part 5501 to disqualify themselves from participating in any particular matter in which they, their spouses or minor children have a financial interest arising from publicly traded securities that exceeds the *de minimis* thresholds specified in the regulatory exemption at 5 CFR 2640.202 or from non-publicly traded securities that are not covered by the regulatory exemption. Furthermore, the agency may prohibit or restrict an individual employee from acquiring or holding any financial interest or a class of financial interests based on the agency's determination that the interest creates a substantial conflict with the employee's duties, within the meaning of 5 CFR 2635.403.
( c ) *Reporting and divestiture.* For purposes of determining the divestiture period specified in 5 CFR 2635.403(d), as applied to financial interests prohibited under paragraph (a) of this section, the “date divestiture is first directed” means the date on which the new entrant public or confidential financial disclosure report required by part 2634 of this title or any report required by § 5502.106(c) of this chapter is due.
[61 FR 39763, July 30, 1996, as amended at 70 FR 5558, Feb. 3, 2005]