De Minimis Levels

Question 1

18 USC 208 (Statute)

Answer 1

• FTEs may not
• participate personally and substantially in an official (NIMH) capacity
• in any particular matter in which, to his knowledge, he or any person whose interests are imputed to him under this statute has a financial interest
  
  • • Ex: spouse, minor child, org serves on BoD, negotiating for non-federal employment
• if the particular matter will have a direct and predictable affect on that interest

Question 2

Stocks vs. Funds

Answer 2

• Stocks - investment in a single company
  * * Publicly traded – traded on a stock exchange
  
  • • Private – not traded on a stock exchange
• Mutual funds (incl. ETFs) - hold many investments (meaning potentially hundreds of stocks) in a single fund

Question 3

2640.201(a) – Diversified Mutual Funds

Answer 3

• A diversified mutual fund does not have a policy of concentrating investments in a single industry, business or geographic sector (e.g., business sector, state, or country other than the US).
• May participate in a NIMH particular matter affecting a holding within the fund, regardless of the value of the employee’s interest in the fund.

Question 4

2640.201(b) – Sector Mutual Funds

Answer 4

• A sector fund has a stated policy of concentrating investments (the underlying holdings) in a single economic or geographic sector, e.g., Health care, IT, a specific country other than the US, or bonds of a single state.
• Sector funds may also contain investments in other areas of the economy, and are not limited to just the stated sector. So a health care sector fund may also contain some IT stocks, or vice versa.

Question 5

2640.201(b)(1) – Sector Mutual Funds

Answer 5

• Holding is in a sector other than the stated sector in which the fund concentrates.
• Any $ amount

Example: Pfizer in IT sector fund

Question 6

2640.201(b)(2) - Sector Mutual Funds

Answer 6

When the matter pertains to the sector in which the fund’s investments (ex: companies) are concentrated PROVIDED the aggregate (total combined) value of interests in all sector funds focusing on the same sector do not exceed$50,000(aggregate self, spouse, and minor child).

Example: Pfizer in healthcare sector fund

Question 7

2640.202(a) – Stock / Parties

Answer 7

• Specific Party Matters (such as grants or research collaborations)
• Disqualifying financial interest arises from ownership of securities issues by one or more entities affected by the matter, IF the securities are publicly traded
  AND
• the aggregate market value of the holdings (employee, spouse, minor children) in the securities of all affected entities (parties) does not exceed$15,000.

Note: Cannot apply to private stock.

Question 8

2640.202(b) – Stock / Nonparties

Answer 8

• Specific Party Matters (such as grants or research collaborations)
• Disqualifying financial interest arises from ownership of securities issued by one or more entities that are not parties to the matter but that are affected by the matter, IF the securities are publicly traded
  AND
• the aggregate market value (employee, spouse, minor children) in the securities of all affected parties [including securities exempted under 202(a)] does not exceed$25,000.
• $5,000 (party) + $10,001 (nonparty) = $25,001 so must not participate

Notes: Cannot apply to private stock, nonparty = compositor or otherwise affected

Question 9

2640.202(c) – Stock / General Applicability

Answer 9

• Matters of general applicability (such as policy or rulemaking)
• Disqualifying financial interest arises from ownership of securities issued by one or more entities affected by the matter IF the securities are publicly traded, or are municipal securities
• Aggregate market value (employee, spouse, minor children) of which does not exceed$25,000 in any oneaffected entity
• $50,000 totalin all affected entities

Question 10

717-1

Answer 10

• Report any $ amt of a SAO holding

* Consider whether employee’s NIMH duties overlap with the SAO sector