PART 6801—SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 1978); 12 U.S.C. 244, 248; E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p.215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p.306; 5 CFR 2635.105, 2635.403(a), 2635.502, 2635.803. Source: 61 FR 53828, Oct. 16, 1996, unless otherwise noted. § 6801.101 Purpose. In accordance with 5 CFR 2635.105, the regulations in this part supplement the Standards of Ethical Conduct for Employees of the Executive Branch found at 5 CFR part 2635. They apply to members and other employees of the Board of Governors of the Federal Reserve System (“Board”). § 6801.102 Definitions. For purposes of this part: (a) Affiliate (b) (1) Debt or equity interest (2) Debt or equity interest (c) Dependent child (1) Unmarried, under the age of 21, and living in the employee's household; or (2) Claimed as a “dependent” on the employee's income tax return. (d) Depository institution (e) Employee (f) Primary government securities dealer (g) Supervisory employee § 6801.103 Prohibited financial interests. (a) Prohibited interests. (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. (1) Nonbanking holding companies. (i) Owns a bank and either the holding company or the bank is exempt under the Bank Holding Company Act of 1956, 12 U.S.C. 1841 et seq., (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. (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. (c) Waivers. (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. [61 FR 53828, Oct. 16, 1996, as amended at 64 FR 68616, Dec. 8, 1999] § 6801.104 Speculative dealings. [Reserved] § 6801.105 Prohibition on preferential terms from regulated institutions. An employee may not accept a loan from, or enter into any other financial relationship with, an institution regulated by the Board, if the loan or financial relationship is governed by terms more favorable than would be available in like circumstances to members of the public. § 6801.106 Prohibition on supervisory employees' seeking credit from institutions involved in work assignments. (a) Prohibition on supervisory employee's seeking credit. (i) The supervisory employee is assigned to the matter; or (ii) The supervisory employee is aware of the pendency of the matter and knows that he or she will participate in the matter by action, advice or recommendation. (2) The prohibition in paragraph (a)(1) of this section also applies for three months after the supervisory employee's participation in the matter has ended. (b) Credit sought by spouse and other related persons. (1) The employee's spouse or dependent child; (2) A company or business if the employee or the employee's spouse or dependent child owns or controls more than 10 percent of its equity; or (3) A partnership if the employee, or the employee's spouse or dependent child is a general partner. (c) Exception. (d) Waivers. § 6801.107 Disqualification of supervisory employees from matters involving lenders. (a) Disqualification required. (1) The employee; (2) The spouse or dependent child of the employee; (3) A company or business if the employee or the employee's spouse or dependent child owns or controls more than 10 percent of its equity; or (4) A partnership if the employee or the employee's spouse or dependent child is a general partner. (b) Exceptions Consumer credit on nonpreferential terms. (i) Credit extended through the use of a credit card; (ii) Credit extended through use of an overdraft protection line; (iii) Amortizing consumer credit (e.g., home mortgage loans, automobile loans); and (iv) Credit extended under home equity lines of credit. (2) Indebtedness of a spouse or dependent child. (i) The indebtedness represents the sole financial interest or responsibility of the spouse, child, company, business or partnership and is not derived from the employee's income, assets or activities; and (ii) The employee has no knowledge of the identity of the lender. (c) Waivers. § 6801.108 Restrictions resulting from employment of family members. A supervisory employee may not participate in any particular matter to which a depository institution or its affiliate is a party if the depository institution or affiliate employs his or her spouse, child, parent or sibling unless the supervising officer, with the concurrence of the Board's Designated Agency Ethics Official, has authorized the employee to participate in the matter using the authorization process set forth in the Office of Government Ethics' Standards of Ethical Conduct at 5 CFR 2635.502(d). § 6801.109 Prior approval for compensated outside employment. (a) Approval requirement. (b) Standard for approval. (c) Definition of employment.