II 

117TH CONGRESS 

1ST SESSION S. 3076 

To amend the Federal Reserve Act to prohibit officers of the Federal Reserve 

from trading certain securities, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 26, 2021 

Mr. BROWN (for himself, Mrs. GILLIBRAND, Mr. MERKLEY, and Mr. 

WARNOCK) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To amend the Federal Reserve Act to prohibit officers of 

the Federal Reserve from trading certain securities, 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 at the Fed Act’’. 

6 SEC. 2. STOCK ACT. 

7 Section 4 of the Federal Reserve Act (12 U.S.C. 341 

8 et seq.) is amended by adding at the end the following: 


kjohnson on DSK79L0C42PROD with BILLS
2 

•S 3076 IS

1 ‘‘Title I of the Ethics in Government Act of 1978 

2 (5 U.S.C. App.), sections 9, 11, 13, and 14 of the STOCK 

3 Act (Public Law 112–105), and section 21A(i) of the Se4 curities Exchange Act of 1934 (15 U.S.C. 78u–1(i)) shall 

5 apply to Federal Reserve bank presidents, vice presidents, 

6 and directors.’’. 

7 SEC. 3. BAN CONFLICTED TRADES. 

8 The Federal Reserve Act (12 U.S.C. et seq.) is 

9 amended by inserting after section 25C (12 U.S.C. 633) 

10 the following: 

11 ‘‘SEC. 25D. BAN CONFLICTED TRADES. 

12 ‘‘(a) DEFINITIONS.—In this section— 

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

14 given the term in section 1a of the Commodity Ex15 change Act (7 U.S.C. 1a); 

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

17 ‘‘(A) means investment in a security, a 

18 commodity, virtual currency, or a future, or any 

19 comparable financial interest acquired through 

20 synthetic means such as the use of a derivative; 

21 and 

22 ‘‘(B) does not include— 

23 ‘‘(i) a diversified mutual fund or in24 vestment trust subject to an exemption 

25 under section 208(b)(2) of title 18, United 


kjohnson on DSK79L0C42PROD with BILLS
3 

•S 3076 IS

1 States Code, and section 2640.201 of title 

2 5, Code of Federal Regulations; or 

3 ‘‘(ii) a United States Treasury bill, 

4 note, or bond; 

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

6 ‘‘(A) a member of the Board of Governors 

7 of the Federal Reserve System; and 

8 ‘‘(B) a president or vice president of a 

9 Federal Reserve bank; 

10 ‘‘(4) the term ‘future’ means a financial con11 tract obligating the buyer to purchase an asset or 

12 the seller to sell an asset, such as a physical com13 modity or a financial instrument, at a predetermined 

14 future date and price; 

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

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

17 Act of 1934 (15 U.S.C. 78c(a)); and 

18 ‘‘(6) the term ‘virtual currency’ means any 

19 cryptocurrency, such as coins or tokens received in 

20 connection with initial coin offerings or issued or 

21 distributed using distributed ledger or blockchain 

22 technology. 

23 ‘‘(b) PROHIBITIONS.—Except as provided in sub24 sections (c) and (d), no covered person may— 

25 ‘‘(1) purchase or sell any covered investment; or 


kjohnson on DSK79L0C42PROD with BILLS
4 

•S 3076 IS

1 ‘‘(2) enter into a transaction that creates a net 

2 short position in any security. 

3 ‘‘(c) EXCEPTIONS.— 

4 ‘‘(1) INVESTMENTS HELD BEFORE TAKING OF5 FICE.— 

6 ‘‘(A) IN GENERAL.—A covered person may 

7 have control over or knowledge of the manage8 ment of any covered investment held by the cov9 ered person as of the day before the date on 

10 which the covered person took office. 

11 ‘‘(B) PROHIBITION ON PURCHASING OR

12 SELLING.—A covered person may not buy or 

13 sell any investment described in subparagraph 

14 (A) except in the case of— 

15 ‘‘(i) placing the investment in a quali16 fied blind trust described in subsection (d); 

17 or 

18 ‘‘(ii) divesting themselves of any in19 vestment under paragraph (2). 

20 ‘‘(2) DIVESTITURE.—A covered person may sell 

21 a covered investment during the 6-month period be22 ginning on— 

23 ‘‘(A) the date on which the covered person 

24 takes office or begins employment, as applica25 ble; 


kjohnson on DSK79L0C42PROD with BILLS
5 

•S 3076 IS

1 ‘‘(B) the date of enactment of this section; 

2 or 

3 ‘‘(C) the date on which the covered person 

4 receives a covered investment through gift or 

5 inheritance. 

6 ‘‘(3) APPROVAL.—Any transaction described in 

7 this subsection shall be approved in accordance with 

8 the rules issued under subsection (f). 

9 ‘‘(d) TRUSTS.— 

10 ‘‘(1) IN GENERAL.—On a case-by-case basis, 

11 the designated agency ethics official of the Board of 

12 Governors may authorize a covered person to place 

13 their securities holdings in a qualified blind trust ap14 proved by the Board under section 102(f) of the 

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

16 ‘‘(2) BLIND TRUST.—A blind trust permitted 

17 under this subsection shall meet the criteria in sec18 tion 102(f)(4)(B) of the Ethics in Government Act 

19 of 1978 (5 U.S.C. App.), unless an alternative ar20 rangement is approved by the Board. 

21 ‘‘(e) ADMINISTRATION AND ENFORCEMENT.— 

22 ‘‘(1) ADMINISTRATION.—The provisions of this 

23 section shall be administered by the Board. 

24 ‘‘(2) ENFORCEMENT.—Whoever knowingly fails 

25 to comply with this section shall be subject to a civil 


kjohnson on DSK79L0C42PROD with BILLS
6 

•S 3076 IS

1 penalty of not less than 10 percent of the value of 

2 the covered investment that was purchased or sold 

3 or the security in which a net short position was cre4 ated in violation of this section, as applicable. 

5 ‘‘(f) OTHER REQUIREMENTS.—Not later than 90 

6 days after the date of enactment of this section, the Board 

7 shall issue rules that require covered persons and senior 

8 staff to— 

9 ‘‘(1) provide 45 days advance notice and prior 

10 approval for any investment transactions; and 

11 ‘‘(2) hold investments for a minimum of 1 year 

12 from the date of the transaction.’’. 

Æ 


kjohnson on DSK79L0C42PROD with BILLS