Here is how it would work: The next head of the S.E.C., expected to be named in the coming weeks, could seek to put in place a new rule for broker-dealers, the financial intermediaries that all trades go through and that the agency oversees. The rule would require the broker-dealers to set up a special compliance program for clients known as “politically exposed persons,” a term that financial institutions know well as part of anti-money-laundering and bribery laws.
The S.E.C. compliance program would require the broker-dealers to ask those clients — which could be defined as members of Congress, their spouses and senior members of staff — to personally answer a questionnaire every time a trade is executed, irrespective of whether the trade is instigated by them or a financial adviser. That would eliminate the frequent excuse that Congress members give about not being involved in trades, even when they are….
Source: A Simple Way to End Questionable Stock Trading by Lawmakers – The New York Times
