An employee may not acquire or hold any financial interest that agency employees are prohibited from acquiring or holding by statute, by agency regulation issued in accordance with paragraph (a) of this section, or by reason of an agency determination of substantial conflict under paragraph (b) of this section.
Note 1 to paragraph (a):
There is no statute of Governmentwide applicability prohibiting employees from holding or acquiring any financial interest. Statutory restrictions, if any, are contained in agency statutes which, in some cases, may be implemented by agency regulations issued independent of this part.
Example 1 to paragraph (b): An Air Force employee who owns $33,778 of stock in a major aircraft engine manufacturer is being considered for promotion to a position that involves responsibility for development of a new fighter airplane. If the agency determined that engineering and other decisions about the Air Force's requirements for the fighter would directly and predictably affect the employee's financial interests, the employee could not, by virtue of 18 U.S.C. 208(a) , perform these significant duties of the position while retaining stock in the company. The agency can require the employee to sell the stock as a condition of being selected for the position rather than allowing the employee to recuse from particular matters.
Example 1 to paragraph (c)(1): A regulatory agency has concluded that ownership by its employees of stock in entities regulated by the agency would significantly diminish public confidence in the agency's performance of its regulatory functions and thereby interfere with the accomplishment of its mission. In its supplemental agency regulations, the agency may prohibit its employees from acquiring or continuing to hold stock in regulated entities.
Example 2 to paragraph (c)(1): An agency that insures bank deposits may, by supplemental agency regulation, prohibit its employees who are bank examiners from obtaining loans from banks they examine. Examination of a member bank could have no effect on an employee's fixed obligation to repay a loan from that bank and, thus, would not affect an employee's financial interests so as to require recusal under § 2635.402 . Nevertheless, a loan from a member bank is a discrete financial interest within the meaning of paragraph (c) of this section that may, when appropriate, be prohibited by supplemental agency regulation.
Example 1 to paragraph (c)(2): The Foundation for the Preservation of Wild Horses maintains herds of horses that graze on public and private lands. Because its costs are affected by Federal policies regarding grazing permits, the Foundation routinely comments on all proposed rules governing use of Federal grasslands issued by the Bureau of Land Management (BLM). BLM may require an employee to resign from their uncompensated position as Vice President of the Foundation as a condition of a promotion to a policy-level position within the Bureau rather than allowing the employee to rely on recusal in particular cases.
5 C.F.R. §2635.403