Banning U.S. politicians from trading on the stock exchange: an overview of the proposal from the Democrats
The U.S. government is developing a bill that would ban politicians from trading on the stock exchange. According to it, congressmen will not have the right to carry out various operations on the platforms while they perform duties in the White House. The ban may also apply to family members of politicians.
The author of the bill is Democratic Senator Jon Ossoff. While the document is still in development, it will need to gain support from the Republican Party in order to move forward. The exact wording of the document is still unknown, but experts assume that if the initiative is approved, congressmen will have to transfer their assets into “blind” trusts when they take office. That’s exactly what Ossoff himself did when he entered office in 2020. His example has boosted the Democratic Party’s approval rating, but other politicians are in no hurry to drop out of the bargaining chip just yet. They may have to do so soon, despite their reluctance.
According to analysts, the implementation of the bill has a high chance, as evidenced by polls of U.S. citizens. 76% of the respondents support the idea of politicians and their relatives not engaging in stock market activities during their term in the parliament.
The U.S. stock market is a great mechanism for easy interaction between investors and companies. Its main advantage is the variety of instruments. For example, there are more than 4 thousand companies’ stocks and approximately one thousand depositary receipts. The U.S. has two major stock exchanges – the NYSE and NASDAQ, which account for more than 50% of the global stock market turnover.
The processes on the platforms are regulated by government agencies, primarily the Federal Reserve and the SEC – the Commission, which deals with securities. Due to the clear control of functioning, investing in the U.S. stock market has minimal risks and is characterized by reliability. There is a wide choice of issuers, which are represented in different sectors of the economy, which makes the market popular around the world. U.S. exchanges provide high liquidity, so the investor does not lose a lot of money on transaction costs. The American legislation has clearly defined all the regulations for operations in the stock market, which provides maximum protection for all participants. A striking example is insurance of up to 500 thousand dollars for securities and up to 250 thousand dollars for money. All investors working through American brokers get it. Thus, the traders will not lose money, and in case of a dispute, they can prove their case.