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Federal reserve Bank o f Dallas DALLAS, TEXAS 75222 Circular No. 73-52 March 9, 1973 RULES OF FEDERAL OPEN MARKET COMMITTEE To All Member Banks in the Eleventh Federal Reserve District: Attached is a pamphlet containing Rules of Organization, Rules Regarding Availability of Information, and Rules of Procedure issued by the Federal Open Market Committee effective February 1, 1973. The pamphlet has been punched for insertion in the ring binder containing the Regulations of the Board of Governors and the Bulletins of this Bank. Your very truly, P. E. Coldwell President Enclosure This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) FEDERAL OPEN MARKET COMMITTEE RULES OF ORGANIZATION RULES REGARDING AVAILABILITY OF INFORMATION (12 CFR 271) RULES OF PROCEDURE (12 CFR 272) As amended effective February 1, 1973 INQUIRIES WITH RESPECT TO THIS PAMPHLET A ny inquiry relating to this pam phlet should be addressed to the Federal Reserve Bank o f the district in w hich the inquiry arises. CONTENTS RULES OF ORGANIZATION Page Page S e c . 1— A u t h o r i t y ................................................... S e c . 2— C o m p o s it io n 5 C o m m i t t e e ........... 5 (a) M e m b e r s .............................. ( b ) Reserve Bank representatives .................. ( c ) Oath o f o f f i c e .................... 5 S e c . 3 — C h a ir m a n of and V ice C h a ir m a n . . . S e c . 4 — St 5 5 5 ............................................................... 5 (a ) Selection o f staff officers . ( b ) Secretary and D eputy and Assistant Secretaries . . . . (c ) Economists .......................... ( d ) General Counsel and A s sistant General Counsel . ( e ) Filling o f vacancies . . . . ( / ) Other staff assistance . . . . 5 a ff S e c . 5— M a na ger a n d S p e c ia l M a n a g er . . 6 6 6 6 6 6 RULES REGARDING AVAILABILITY OF INFORMATION S e c . 27 1 .1 — A u t h o r i t y ..................................... 7 S e c . 2 7 1 .2 — D e f i n i t i o n s ................................... 7 (a) “Information o f the Com m ittee” ......................... ( b ) “Records o f the C om m ittee” ...................... S e c . 271.3— P u b l i s h e d I n f o r m a t i o n .......... ( a) Federal R e g i s t e r .............. ( b ) Policy r e c o r d ................... (c ) Other published informa tion ........................................ Sec. 2 7 1 .4 — R e c o r d s P u b lic (a) (b) (c ) on A v a ila b le to S e c . 271.5— D e f e r m e n t o f A v a i l a b i l i t y o f C e r t a in I n f o r m a t i o n . . . . (a) Deferred availability o f in formation ............................ ( b ) Reasons for deferment o f availability ......................... 7 7 7 7 7 7 Records a v a i l a b l e ............ Place and t i m e ................. Obtaining access to records S e c . 2 7 1 . 7 — S u b p o e n a s ........................................ (a) A dvice by person served ( b ) Appearance by person served ................................... 9 9 7 7 8 8 10 S e c . 2 7 2 .2 — F u n c t i o n s o f C o m m i t t e e . . . 10 S e c . 2 7 2 .3 — M e e t i n g s ........................................... 10 10 10 10 10 10 ( a) P la c e and fr eq u en cy . . . ( b ) A ltern ates .............................. (c) Q u o r u m ................................ ( d ) A tte n d a n c e at m e etin g s . ( e ) M e e tin g a g e n d a s ................ 8 8 RULES OF PROCEDURE S e c . 272 .1 — A u t h o r i t y ........................................ 8 Sec. 271.6— I n f o r m a t i o n n o t D i s c l o s e d . th e R e q u e s t ................... 8 S e c . 272.4 — C o m m i t t e e A c t i o n s ................ (a) A c tio n s at m e etin g s . .. ( b ) A c tio n s b e tw e en m eetin gs ( c ) D e le g a tio n s o f authority ( d ) E ffective d a t e ...................... S e c . 272.5 — N o t i c e a n d P u b l i c P r o c e d u r e 9 RULES OF ORGANIZATION* As amended effective February 1, 1973 SE CT IO N 1— A U T H O R IT Y These rules are issued by the Federal Open Market Committee (the “Com m ittee”) pursuant to the requirement o f section 552 o f Title 5 of the United States Code that every agency shall pub lish in the Federal Register a description o f its central and field organization. SE C T IO N 2— CO M PO SIT IO N OF C O M M IT T E E (a) Members.— The Committee consists of the seven members o f the Board o f Governors o f the Federal Reserve System (the “Board”) and five representatives of the Federal Reserve Banks, each o f w hom is a President or a First V ice President o f a Reserve Bank. ( b ) Reserve Bank representatives.— The rep resentatives o f the Federal Reserve Banks, and an alternate for each representative, are elected by the boards o f directors o f the Reserve Banks in accordance with section 12A o f the Federal R e serve A ct (12 U.S.C. § 263) for terms o f one year com m encing on March 1 of each year. Prior to the first meeting o f the Committee on or after March 1 o f each year, each member o f the C om mittee representing the Federal Reserve Banks shall cause a record o f his election and o f the election o f his alternate to be forwarded to the Secretary o f the Committee. If any question is raised as to the election or eligibility o f a member or alternate, the Committee determines such ques tion before such member or alternate participates in a meeting o f the Committee. In the event a member is absent from a meeting o f the C om m it tee, his alternate, in attending the meeting, shall have the same status as the member for whom he priate Reserve Bank or Banks and such successor serves until the next annual election. (c) Oath o f office.— Each member o f the C om mittee and each alternate take the same oath of office as that prescribed by statute to be taken by officers of the United States. SE C T IO N 3— C H A IR M A N A N D V IC E C H A IR M A N At its first meeting on or after March 1 of each year, the Committee elects a Chairman and a Vice Chairman from among its membership. The Chairman presides at all meetings of the Committee and performs such other duties as the Committee may require. The Vice Chairman per forms the duties o f the Chairman in the absence o f the Chairman. In the absence o f both the Chairman and the V ice Chairman o f the C om mittee, the V ice Chairman o f the Board acts as Chairman of the Committee; and, in the absence o f the Chairman and the V ice Chairman o f the Committee and the V ice Chairman o f the Board, the member o f the Board present with the longest service as a member o f the Board acts as Chair man of the Committee. SE C T IO N 4— S T A F F (a) Selection o f staff officers.— A t its first meeting on or after March 1 o f each year, the Committee selects, from among the officers and employees o f the Board and the Federal Reserve Banks, the following staff officers to serve until the first meeting on or after March 1 of the next following year: Secretary, Deputy Secretary, and one or more Assistant Secretaries; General C oun sel and one or more Assistant General Counsel; is serving. If a member or alternate ceases to be a President or First V ice President o f a Reserve Bank, a successor may be chosen in a special election by the boards o f directors o f the appro * The text is not included in the Code of Federal Regu lations and therefore may not be cited with a code reference. §§ 4-5 and Economists, one or more of whom may be designated as Senior or Associate Economists or given titles reflecting their areas o f particular specialization. ( b ) Secretary and Deputy and Assistant Sec retaries.— The Secretary keeps minutes of actions and records o f discussions at all meetings o f the Committee; he maintains a complete record of the actions taken by the Committee upon all questions o f policy relating to open market oper ations; and he records the votes taken in connec tion with the determination o f open market policies and the reasons underlying each such action. H e has custody o f such minutes and rec ords, and he performs such other duties as the Committee may require. In the absence of the Secretary o f the Committee, the Deputy Secretary or an Assistant Secretary acts as Secretary pro tem. (c ) E conom ists.— The Economists prepare for the use o f the Committee and present to it such information regarding business and credit con ditions and domestic and international economic and financial developments as will assist the C om mittee in the determination o f open market pol icies, and they perform such other duties as the Committee may require. ( d ) General Counsel and Assistant General RULES OF ORGANIZATION C ounsel.— The General Counsel furnishes such legal advice as the Committee may require. In the absence of the General Counsel, an Assistant G en eral Counsel acts as General Counsel pro tem. (e ) Filling o f vacancies.— A t any meeting the Committee may fill any vacancy in the offices described in this section. ( / ) Other staff assistance.— The services o f any officers and employees of the Board and the F ed eral Reserve Banks are made available and are utilized by the Committee as required. SECTIO N 5— M A N A G E R A N D SPEC IA L M A N A G E R The Committee selects a Manager o f the System Open Market Account and a Special Manager for Foreign Currency Operations for such Account, both o f whom shall be satisfactory to the Federal Reserve Bank selected by the C om mittee to execute open market transactions for such Account, and both of whom serve at the pleasure o f the Committee. The Manager and Special Manager keep the Committee informed on market conditions and on transactions they have made and render such reports as the Committee may specify. RULES REGARDING AVAILABILITY OF INFORMATION* (12 CFR 271) As revised effective February 1, 1973 SE C T IO N 27 1 .1 — A U T H O R IT Y This Part is issued by the Federal Open Market Committee (the “C om m ittee”) pursuant to the requirement o f section 552 o f Title 5 o f the United States C ode that every agency shall pub lish in the Federal Register for the guidance o f the public descriptions o f the established places at which, the officers from w hom , and the methods whereby, the public may obtain information, make submittals or requests, or obtain decisions. SE C T IO N 2 7 1 .2 — D E F IN IT IO N S (a) “Inform ation o f the C om m ittee”.— For purposes o f this Part, the term “information of the Com m ittee” means all information coming into the possession o f the Committee or o f any member thereof or o f any officer, employee, or agent o f the Committee, the Board o f Governors o f the Federal Reserve System (the “Board” ) ? or any Federal Reserve Bank, in the performance of duties for, or pursuant to the direction of, the Committee. ( b ) “Records o f the C om m ittee”.— For pur poses o f this Part, the term “records o f the C o m mittee” means rules, statements, opinions, orders, memoranda, letters, reports, accounts, and other papers containing information o f the Committee ( 1 ) a description of its organization; ( 2 ) statements of the general course and method by which its functions are channeled and determined; (3 ) rules of procedure; ( 4 ) substantive rules o f general applicability, and statements of general policy and interpre tations of general applicability formulated and adopted by the Committee; ( 5 ) every amendment, revision, or repeal o f the foregoing; and (6 ) general notices o f proposed rule making. ( b ) P olicy record.— In accordance with sec tion 10 o f the Federal Reserve Act (1 2 U.S.C. 2 4 7 a ), each annual report made to Congress by the Board includes a complete record of the ac tions taken by the Committee during the preceding year upon all matters of policy relating to open market operations, showing the votes taken and the reasons underlying such actions. (c ) Other published inform ation.— From time to time, other information relating to open market operations o f the Federal Reserve Banks is pub lished in the Federal Reserve B u l l e t i n , issued monthly by the Board, in such Board’s annual report to Congress, and in announcements and statements released to the press. Copies of issues o f the B u l l e t i n and o f annual reports o f the Board may be obtained upon request. that constitute a part o f the C om m ittee’s official files. SE C T IO N 271.4— R EC O R D S A V A IL A B L E TO T H E P U B L IC O N R E Q U E S T SE C T IO N 2 7 1 .3 — P U B L IS H E D IN F O R M A T IO N (a) (a) R ecords available.— Records of the C om mittee are made available to any person, upon re Federal Register.— T o the extent required quest, for inspection or copying in accordance by sections 5 5 2 and 553 o f Title 5 o f the United States Code, and subject to the provisions of §§ 271.5 and 271.6, the Com m ittee publishes in the Federal Register, in addition to this Part, * The text corresponds to the Code of Federal Regula tions, Title 12, Chapter II, Part 271; cited as 12 CFR 271. The words “this P art”, as used herein, mean these rules. §§ 271.4-271.6 with the provisions o f this section and subject to the limitations stated in §§ 271.5 and 271.6. Records falling within the exemptions from dis closure set forth in section 552(b) o f Title 5 of the United States Code and in § 2 7 1 .6 .may never theless be made available in accordance with this section to the fullest extent consistent, in the C om mittee’s judgment, with the effective performance o f the C om m ittee’s statutory responsibilities and with the avoidance o f injury to a public or private interest intended to be protected by such exem p tions. ( b) Place and time.— In general, the records o f the Committee are held in the custody of the Board, but certain o f such records, or copies thereof, are held in the custody o f one or more o f the Federal Reserve Banks. Any such records subject to this section will be made available for inspection or copying during regular business hours at the offices o f the Board in the Federal Reserve Building, 20th and Constitution Avenue, Washington, D. C., 205 5 1 , or, in certain in stances as provided in paragraph ( c ) o f this sec tion, at the offices o f one or more designated Federal Reserve Banks. ( c ) Obtaining access to records.— Any person requesting access to records o f the Committee shall submit such request in writing to the Secre tary o f the Board. In any case in which the records requested, or copies thereof, are available at a Federal Reserve Bank, the Secretary o f the Board may so advise the person requesting access to the records. Every request for access to records of the Committee shall state the full name and address o f the person requesting them and shall describe such records in a manner reasonably sufficient to permit their identification without undue difficulty; and such person shall pay a fee in an amount based upon $5 per hour for the time required to locate such records and prepare them for inspec tion plus 10 cents per standard page for any cop y ing thereof. SE C T IO N 2 7 1 .5 — D E F E R M E N T OF A V A IL A B IL IT Y O F C E R T A IN IN F O R M A T IO N ( a) Deferred availability o f information.— In some instances, certain types o f information of the Committee are not published in the Federal Register or made available for public inspection or copying until after such period o f time as the RULES REGARDING IN FORMATION Committee may determine to be reasonably neces sary to avoid the effects described in paragraph ( b ) of this section or as may otherwise be neces sary to prevent impairment of the effective dis charge o f the Committee’s statutory responsi bilities. For example, the C ommittee’s current econom ic policy directive adopted at each meet ing of the Committee is published in the Federal Register approximately 90 days after the date of its adoption; and no information in the records of the Committee relating to the adoption of any such directive is made available for public in spection or copying before it is published in the Federal Register or is otherwise released to the public by the Committee. ( b) Reasons for deferment o f availability.— Publication of, or access to, certain information of the Committee may be deferred because earlier disclosure of such information would (1 ) interfere with the orderly execution of policies adopted by the Committee in the per formance of its statutory functions; ( 2 ) permit speculators and others to gain unfair profits or to obtain unfair advantages by speculative trading in securities, foreign ex change,’ or otherwise; ( 3 ) result in unnecessary or unwarranted disturbances in the securities market; ( 4 ) make open market operations more costly; (5 ) interfere with the orderly execution of the objectives or policies of other Government agencies concerned with domestic or foreign econom ic or fiscal matters; or (6 ) interfere with, or impair the effective ness of, financial transactions with foreign banks, bankers, or countries that may influence the flow of gold and o f dollar balances to or from foreign countries. SECTIO N 27 1 .6 — IN F O R M A T IO N N O T D ISCL O SE D Except as may be authorized by the Committee, information of the Committee that is not available to the public through other sources will not be published or made available for inspection, ex amination, or copying by any person if such in formation (a) is exempted from disclosure by statute or executive order; RULES REGARDING IN F O R M A TIO N ( b ) relates solely to internal personnel rules or practices or other internal practices o f the C o m mittee; (c ) relates to trade secrets or commercial or financial information obtained from any person and privileged or confidential; ( d ) is contained in inter-agency or intra-agency memoranda or letters, including records o f delib erations and discussions at meetings o f the C o m mittee and reports and documents filed by m em bers or staff o f the Committee that would not be routinely available to a private party in litigation with the Committee; ( e ) is contained in personnel, medical, or simi lar files (including financial files) the disclosure o f which would constitute a clearly unwarranted invasion o f personal privacy; or ( / ) is contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use o f any agency responsible for the regulation or supervision o f financial in stitutions. Except as provided by or pursuant to this Part, no person shall disclose, or permit the disclosure of, any information o f the Committee to any per son, whether by giving out or furnishing such in formation or copy thereof, by allowing any person to inspect, examine, or reproduce such informa tion or copy thereof, or by any other means, whether the information is located at the offices o f the Board, any Federal Reserve Bank, or else where, unless such disclosure is required in the performance o f duties for, or pursuant to the di rection of, the Committee. A ny person who may be denied access to records o f the Committee may, within 5 days thereafter, file with the Committee a written request for review o f such action. §§ 271.6-271.7 S E C T IO N 271 .7 — S U B P O E N A S (a) A dvice by person served.— If any person, whether or not an officer or employee o f the Committee, o f the Board, or of a Federal Reserve Bank, has information o f the Committee that may not be disclosed by reason of § 271.5 or § 271.6 and in connection therewith is served with a subpoena, order, or other process requiring his personal attendance as a witness or the production o f documents or information upon any proceed ing, he should promptly inform the Secretary o f the Committee o f such service and of all relevant facts, including the documents and information requested and any facts that may be o f assistance in determining whether such documents or in formation should be made available; and he should take action at the appropriate time to inform the court or tribunal that issued the process, and the attorney for the party at w hose instance the process was issued, if known, of the substance o f this Part. ( b ) Appearance by person served.— Except as disclosure of the relevant information is author ized pursuant to this Part, any person who has information of the Committee and is required to respond to a subpoena or other legal process shall attend at the time and place therein mentioned and decline to disclose such information or give any testimony with respect thereto, basing his refusal upon this Part. If, notwithstanding, the court or other body orders the disclosure o f such information, or the giving o f such testimony, the person having such information of the Committee shall continue to decline to disclose such informa tion and shall promptly report the facts to the Committee for such action as the Committee may deem appropriate. RULES OF PROCEDURE* (12 CFR 272) A s amended effective February 1, 1973 S E C T IO N 2 7 2 .1 — A U T H O R IT Y This Part is issued by the Federal Open Market Committee (the “Com m ittee”) pursuant to the re quirement o f section 552 o f Title 5 o f the United States Code that every agency shall publish in the Federal Register its rules o f procedure. SECTIO N 2 7 2 .2 — F U N C T IO N S OF T H E C O M M IT T E E The procedures followed by the Committee are designed to facilitate the effective performance of the Com m ittee’s statutory functions with respect to the regulation and direction o f open market oper ations conducted by the Federal Reserve Banks and with respect to certain direct transactions be tween the Reserve Banks and the United States. In determining the policies to be followed in such operations, the Committee considers information regarding business and credit conditions and domestic and international econom ic and financial developments, and other pertinent information gathered and submitted by its staff and the staffs o f the Board o f Governors o f the Federal Reserve System (the “Board” ) and the Federal Reserve Banks. Against the background o f such informa tion, the Committee takes actions from time to time to regulate and direct the open market oper ations o f the Reserve Banks. Such policy actions ordinarily are taken through the adoption and transmission to the Federal Reserve Banks of regulations, authorizations, and directives. SE C T IO N 2 7 2 .3 — M E E T IN G S (a) Place and frequency.— The Committee meets in Washington, D.C., at least four times each year and oftener if deemed necessary. M eet ings are held upon the call o f the Chairman o f the Board or at the request o f any three members of the Committee. N otices o f calls by the Chairman o f the Board to other members are given by the Secretary o f the Committee in writing or by telegram. Requests of any three members for the calling of a meeting shall state the time therefor and shall be filed in writing or by telegram with the Secretary w ho shall forthwith notify all m em bers o f the Committee in writing or by telegram. When the Secretary has sent notices to all m em bers o f the Committee that a meeting has been requested by three members and o f the time there for, a meeting is deemed to have been called. If, in the judgment of the Chairman, circumstances require that a meeting be called at such short notice that one or more members cannot be present in Washington, such members may par ticipate in the meeting by telephone conference arrangements. ( b ) Alternates.— W henever any member of the Committee representing Federal Reserve Banks shall find that he will be unable to attend a meet ing of the Committee, he shall promptly notify his alternate and the Secretary of the Committee in writing or by telegram, and upon receipt of such notice the alternate shall advise the Secretary whether he will attend such meeting. (c ) Quorum .— Seven members (including al ternates present and acting in the absence o f members) constitute a quorum for the transac tion o f business; but less than a quorum may adjourn from time to time until a quorum is in attendance. ( d ) Attendance at meetings.— Attendance at C ommittee meetings is restricted to members and alternate members o f the Committee, the Presi dents o f Federal Reserve Banks w ho are not at the time members or alternates, staff officers of the Committee, the Manager and Special M ana ger, and such other advisers as the Committee may invite from time to time. ( e ) M eeting agendas.— The Secretary, in con * The text corresponds to the Code of Federal Regu lations, Title 12, Chapter II, Part 272; cited as 12 CFR 272. RULES OF PROCEDURE sultation with the Chairman, prepares an agenda o f matters to be discussed at each meeting and the Secretary transmits the agenda to the members o f the Committee within a reasonable time in advance o f such meeting. In general, the agendas include approval o f minutes o f actions and ac ceptance o f memoranda o f discussion for previous meetings; reports by the Manager and Special Manager on open market operations since the previous meeting, and ratification by the C om m it tee o f such operations; reports by Economists on, and Committee discussion of, the econom ic and financial situation and outlook; Committee dis cussion o f monetary policy and action with respect thereto; and such other matters as may be con sidered necessary. SECTIO N 27 2 .4 — C O M M IT T E E A C T IO N S ( a ) A ctions at meetings.— Actions are taken at meetings o f the Committee except as described below. ( b ) A ctions between meetings.— Special cir cumstances may make it desirable in the public interest for Committee members to consider an action to modify an outstanding Committee au thorization or directive at a time when it is not feasible to call a meeting. Whenever, in the judg ment o f the Chairman, such circumstances have arisen, the relevant information and recomm enda tions for action are transmitted to the members by the Secretary, and the members communicate their votes to the Secretary. If the action is ap proved by a majority o f the members, advice to that effect is promptly given by the Secretary to the members o f the Committee and to the Reserve Bank selected to execute transactions for the System Open Market Account. All com m uni cations o f recomm ended actions and votes under this paragraph shall be in writing or by telegram; provided that, in exceptional cases when that is not feasible, such communications may be made orally, either in person or by telephone, and the §§ 272.3-272.5 Secretary shall cause a written record to be made without delay. A n action taken between meetings has the force and effect o f an action at a meeting; provided, however, that if a meeting is held before the execution of any operations pursuant to the action, the action is null and void unless it is ratified and confirmed by the Committee at such meeting. ( c ) D elegations o f authority.— In special cir cumstances, the Committee may delegate author ity to take an action, subject to such instructions or guidelines as the Committee deems proper. Such delegations of authority may be made to the Chairman; to a subcommittee consisting o f the Chairman and the V ice Chairman o f the C om mittee and the Vice Chairman o f the Board (or in the absence o f the Chairman or o f the V ice Chairman o f the Board the members o f the Board designated by the Chairman as alternates, and in the absence o f the Vice Chairman of the C om mittee his alternate); or to any other member or members o f the Committee. An action taken pursuant to such a delegation o f authority has the force and effect o f an action taken by the Committee. ( d ) Effective date.— Committee action ordi narily is made effective as o f the time it is taken because the nature of the subject matter and the action taken is such that the public interest and the proper discharge of the Com m ittee’s respon sibilities so require. Occasionally, however, the Committee may specify that an action is to be effective at some different time. SE C T IO N 272.5— N O T IC E A N D PUB L IC PROCEDURE There ordinarily is no published notice o f pro posed action by the Committee or public proce dure thereon, as described in section 553 o f Title 5 o f the United States Code, because such notice and procedure are impracticable, unnecessary, or contrary to the public interest.
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