To amend title 5, United States Code, to prohibit Members of Congress and their spouses from trading stock, and for other purposes.
The bill would amend title 5 U.S. Code to prohibit Members of Congress and their spouses from holding, purchasing, or selling “covered financial instruments” during the Member’s term of office. A “covered financial instrument” includes securities, security futures, commodities, and similar synthetic interests created through derivatives (such as options). It explicitly excludes diversified mutual funds, diversified exchange-traded funds, the Thrift Savings Plan, and U.S. Treasury securities. The prohibition contains two main exceptions: (1) holdings that a Member or spouse owned immediately before the term begins can continue to be held; and (2) holdings held in a qualified blind trust. Violations could result in civil fines. The amendments would take effect at the start of the 120th Congress (roughly January 2027). The bill also adds a new Subchapter IV (Restrictions Regarding Financial Instruments) to Chapter 131 of title 5.
Key Points
- 1Prohibition scope: A Member of Congress and the Member’s spouse may not hold, purchase, or sell any covered financial instrument during the Member’s term, with limited exceptions.
- 2Definitions: A “covered financial instrument” covers securities, security futures, commodities, and similar economic interests gained through derivatives; excludes diversified mutual funds, diversified ETFs, the Thrift Savings Plan, and U.S. Treasury securities.
- 3Exceptions: (1) pre-term holdings can continue to be held; (2) investments in a qualified blind trust are exempt from the prohibition.
- 4Enforcement and penalties: Violations may incur civil fines under the existing penalty framework referenced in 13106(a).
- 5Effective date: The new restrictions begin on the first day of the One Hundred Twentieth Congress (not immediately, but starting around early 2027).