NEW YORK: The Federal Reserve on Friday adopted an extensive set of restrictions on trading by policymakers and senior Fed staff after an ethics scandal that embroiled policymakers and threatened to shake confidence in the central bank’s integrity.

The Fed said the rules are meant “to ensure public confidence in the impartiality and integrity of the Committee’s work.”

Under the new rules, some of which were first unveiled last October, top Fed officials are banned from purchasing stocks and sector funds, and from holding individual bonds, agency-backed securities, cryptocurrencies, commodities or foreign currencies.

The use of derivatives, short sales and purchasing securities on margin are also banned, and officials will have to give 45 days advance notice and obtain approval for any transaction. All investments must be held for at least a year, the rules say.

Most of the Fed’s new trading restrictions will come into effect on May 1 with pre-clearance and advance notice rules in force from July 1. Current Fed officials will have 12 months to come into compliance, the central bank said; new staff and policymakers will have six months from the date they join.

The Fed put in place the rules after Boston Fed chief Eric Rosengren and Dallas Fed president Robert Kaplan resigned following reports of their active trading in 2020, when the central bank launched a massive effort to fight the economic impact of the COVID-19 pandemic. The Fed’s efforts helped bolster financial markets.

Another policymaker, then Fed Vice Chair Richard Clarida, also came under fire after he corrected a previous financial disclosure in late December to show he sold a stock fund and then swiftly rebought it shortly before the Fed announced a barrage of rescue programs to stem the economic fallout from the pandemic.

However, questions remain about how much back and forth may have occurred over policymakers’ personal trading in a year when markets first cratered, then rebounded on the basis of both massive federal fiscal stimulus and an aggressive rescue effort by the Fed.