Rule2026-19598
Rules of Practice
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 24, 2026
Effective
September 24, 2026
Issuing agencies
Federal Trade Commission
Abstract
The Federal Trade Commission ("Commission" or "FTC") is amending its rules of practice in order to eliminate the agency's post- employment clearance rule.
Full Text
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<title>Federal Register, Volume 91 Issue 184 (Thursday, September 24, 2026)</title>
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[Federal Register Volume 91, Number 184 (Thursday, September 24, 2026)]
[Rules and Regulations]
[Pages 60510-60513]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-19598]
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FEDERAL TRADE COMMISSION
16 CFR Parts 4 and 5
RIN 3084-AB85
Rules of Practice
AGENCY: Federal Trade Commission.
ACTION: Final rule.
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SUMMARY: The Federal Trade Commission (``Commission'' or ``FTC'') is
amending its rules of practice in order to eliminate the agency's post-
employment clearance rule.
DATES: These rule revisions are effective on September 24, 2026.
FOR FURTHER INFORMATION CONTACT: Josephine Liu, (202) 326-2170, Office
of the General Counsel, Federal Trade Commission, 600 Pennsylvania
Avenue NW, Washington, DC 20580.
SUPPLEMENTARY INFORMATION: The Commission is revising certain rules in
parts 4 and 5 of its rules of practice, 16 CFR parts 4 and 5.
Specifically, the Commission is eliminating its existing ethics
clearance rule, revising part 5 to remind current and former employees
of various ethics requirements, and clarifying the disciplinary actions
available for violations of those ethics requirements.
I. Revisions to Part 4--Miscellaneous Rules
The Commission is deleting old Sec. 4.1(b)-(c), which previously
contained the Commission's ethics clearance rule. The ethics clearance
rule is unnecessary, because it is duplicative of other laws,
regulations, and professional responsibility requirements. It is also
inconsistent with the rules of other agencies, which do not impose the
same substantive or procedural requirements. Moreover, because the FTC
is one of the few agencies that attempts to impose additional
requirements on former employees that exceed the government-wide
restrictions, the rule has chilled the agency's ability to recruit and
hire specialists such as economists and technologists who do not face
similar restrictions at other governmental organizations. Finally, the
rule could have the unintended consequence of creating a safe harbor
that protects former employees from liability for violating 18 U.S.C.
207, because it requires the FTC to approve a former employee's
participation in a matter if the agency lacks sufficient information to
deny clearance and that agency approval could provide a defense to
violations of Section 207.
In new Sec. 4.1(a)(3), the Commission is adding a cross-reference
to new Sec. 5.30, to remind former employees of the Commission that
they must comply with the post-government employment restrictions
described there. In light of the Commission's elimination of the ethics
clearance rule, the Commission is making a corresponding deletion of
old Sec. 4.9(b)(10)(ii), which provided that applications for ethics
clearance would be part of the Commission's public record.
II. Revisions to Part 5--Employee Standards of Conduct
The Commission is changing part 5 of its rules to remind current
and former employees of various ethics requirements, and make clear the
disciplinary actions available for violations of those ethics
requirements. These changes include a new subpart D (Sec. 5.30) that
describes post-employment restrictions. Subpart E (Sec. Sec. 5.50-
5.54), regarding disciplinary actions concerning post-employment
conflict of interest, has been renamed ``Disciplinary Actions
Concerning Ethics Requirements and Post-Government Employment
Restrictions.'' This subpart has been streamlined and modified to
conform to current agency practice.
Sec. 5.1: Cross-Reference to Executive Branch-Wide Regulations
In Sec. 5.1, the Commission is clarifying that all agency
employees--including Commissioners, political appointees, and special
Government employees--are governed by the executive branch-wide ethics
regulations. The Commission is also fixing the citation format and
adding an explanatory parenthetical for the cross-reference to the FTC
regulations at 5 CFR part 5701.
Sec. 5.2: Waiver of Insubstantial Financial Conflicts
The Commission is reorganizing and adding clarifying language to
Sec. 5.2. New Sec. 5.2(a) is old Sec. 5.2(d), which has also been
revised for clarity. In new Sec. 5.2(c), the Commission describes the
process an official responsible for appointment must use to obtain a
recommendation from the FTC's Designated Agency Ethics Official for a
waiver, pursuant to 18 U.S.C. 208(b)(1) and 5 CFR 2640.301, of certain
financial interests of an employee that are determined to be not so
substantial as to be deemed likely to affect the integrity of the
employee's services to the Government. In new Sec. 5.2(d), the
Commission is clarifying that the Inspector General is the ``official
responsible for appointment'' for OIG employees. In new Sec. 5.2(e),
the Commission is adding a parenthetical to clarify that the Chairman
cannot be the ``official responsible for appointment'' for himself or
the Inspector General.
Sec. 5.10: Cross-Reference to Executive Branch-Wide Regulations
In Sec. 5.10, the Commission is clarifying that all agency
employees--including Commissioners, political appointees, and special
Government employees--are subject to the executive branch-wide
financial disclosure regulations. The Commission is also updating the
cross-reference to the appropriate chapter of the FTC Administrative
Manual that contains the procedures for filing and reviewing financial
disclosure reports.
[[Page 60511]]
Sec. 5.30: General Prohibitions for Former Employees
New Sec. 5.30 mirrors the government-wide post-employment
restrictions on former employees, limiting the type of work they may
perform for their new employers. This section generally describes the
common prohibitions set forth in 18 U.S.C. 207.
New Sec. 5.30(a) reminds former employees that they must comply
with the requirements of 18 U.S.C. 207 and its implementing regulations
at 5 CFR part 2641 (post-government employment conflict of interest
restrictions), 18 U.S.C. 203 (compensation for representational
services), 41 U.S.C. 2104 (compensation from contractors), and any
other applicable laws, regulations, or rules.
New Sec. 5.30(b)(1) reminds former employees that if they
participated personally and substantially in any particular matter
involving specific parties, they must never (on behalf of someone other
than themselves or the United States) appear before or communicate to
any Federal department, agency, or court regarding that same particular
matter.
New Sec. 5.30(b)(2) reminds former employees that they are
restricted from representing anyone (other than themselves or the
United States) before a Federal agency regarding matters pending under
their official responsibility during their last year of Government
service for two years after they leave the Commission.
New Sec. 5.30(b)(3) reminds former ``senior'' Commission
employees--such as Commissioners, certain Schedule C employees, certain
Intergovernmental Personnel Act employees, Senior Level Executives, and
Senior Executive Service officials who are subject to 18 U.S.C.
207(c)--that they are subject to a one-year ``cooling off'' period
(this period may vary depending on any applicable Ethics Pledge
requirements) in which the former employee must not make any
communication to, or appearance before, any FTC employee to seek
official action on behalf of someone else.
As with 18 U.S.C. 207, new Sec. 5.30(b)(1)-(3) does not address
behind-the-scenes assistance by former employees or a former employee's
knowledge of nonpublic information. The Commission has determined that
addressing these issues in new Sec. 5.30 is unnecessary to protect
against misconduct by former employees. For example, attorney bar rules
generally prohibit attorneys who leave Federal government service from
providing behind-the-scenes assistance for matters in which the
attorney personally and substantially participated during their
government employment. See, e.g., District of Columbia Rules of
Professional Conduct, Rule 1.11(a); N.Y. Rules of Professional Conduct,
Rule 1.11(a).
Sec. 5.50: Submission of Information
The Commission is updating its procedures for disciplinary actions
concerning alleged violations of ethics requirements and post-
employment restrictions to match current agency practice. New Sec.
5.50, which replaces old Sec. 5.53, notes that any person with
information about a possible violation of subparts A-B or D of this
part or 18 U.S.C. 207 may submit a written statement to the FTC's
General Counsel, Designated Agency Ethics Official (``DAEO''), or
Inspector General, where appropriate.
Sec. 5.51: Referrals
New Sec. 5.51(a) streamlines old Sec. 5.54. As provided in new
Sec. 5.51(a), the General Counsel or DAEO will make a preliminary
determination of whether the matter warrants or requires the
involvement of other agencies or authorities. If so, the General
Counsel or DAEO will expeditiously transmit any available information
to the FTC's Inspector General or else to the Department of Justice
(``DOJ'') or the U.S. Office of Government Ethics (``OGE''), as
appropriate.
Under new Sec. 5.51(b), which incorporates old Sec. 5.56(b), the
General Counsel also will determine whether the matter should be
referred to the disciplinary committee of the bar(s) of which any
employee or former employee who is an attorney is a member.
To mitigate the possibility of conflicting investigations, new
Sec. 5.51(c) specifies that, if the General Counsel or DAEO transmits
information alleging a crime or severe misconduct to the DOJ, OGE, or
bar disciplinary authority under Sec. 5.51(a) or (b), the General
Counsel or DAEO will also notify the FTC's Inspector General.
Sec. 5.52: Investigation or Proceeding
New Sec. 5.52(a) reinforces the existing requirement, as already
specified in 5 U.S.C. 406 and the FTC's Administrative Manual, that the
agency must cooperate fully in any Inspector General investigation of
possible violations of subparts A-B or D of this part or 18 U.S.C. 207.
The agency will also cooperate fully with any similar investigations by
the Department of Justice or U.S. Office of Government Ethics.
New Sec. 5.52(b) sets out how the agency will request information
from the Inspector General after the conclusion of any Inspector
General investigation or Department of Justice prosecution.
Given the Inspector General's investigative role, the Commission no
longer requires old Sec. Sec. 5.55-5.66, which were intended for use
if the agency conducted its own investigation of the former employee.
Sec. 5.53: Sanctions
New Sec. 5.53 updates old Sec. 5.67. As specified in new Sec.
5.53, if an employee or former employee is convicted of violating 18
U.S.C. 207 or other Federal laws related to conduct described in part
5, or if the factual findings in the Inspector General's report support
a finding that the employee or former employee violated subparts A-B or
D of this part, the Commission may adopt the record of the criminal or
civil proceeding or Inspector General report as its record. The
Commission may order such additional disciplinary action as it deems
warranted, including: (a) reprimand; (b) suspension from participating
in a particular matter or matters before the Commission; or (c)
prohibiting the person from making, with the intent to influence, any
formal or informal appearance before, or any oral or written
communication to, an FTC employee on any matter or business on behalf
of any other person (except the United States) for a period not to
exceed 5 years.
Sec. 5.54: Judicial Review
New Sec. 5.54 incorporates old Sec. 5.68. New Sec. 5.54 explains
that a person against whom the Commission has issued an order imposing
disciplinary action under this part may seek judicial review of the
Commission's determination in the United States District Court for the
District of Columbia by filing a petition for such review within 60
days of receipt of notice of the Commission's final decision.
III. Procedural Requirements
A. The Administrative Procedure Act and Regulatory Flexibility Act
Because these rule revisions relate solely to agency personnel,
procedure, or practice, publication for notice and comment is not
required under the Administrative Procedure Act. 5 U.S.C. 553(a)(2),
(b).
For this reason, the requirements of the Regulatory Flexibility Act
are also inapplicable. 5 U.S.C. 601(2), 604(a).
[[Page 60512]]
B. E.O. 14215, Ensuring Accountability for All Agencies; E.O. 12866,
Regulatory Planning and Review; E.O. 14192, Unleashing Prosperity
Through Deregulation
E.O. 12866 states that agencies should assess the costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, and distributive impacts). E.O. 14215 requires all executive
branch departments and agencies, including independent agencies, to
submit all their proposed and final significant regulatory actions to
the Office of Management and Budget (OMB) for review. OMB determined
that this final rule is not a significant regulatory action under E.O.
12866.
Executive Order 14192 requires that any new incremental costs
associated with certain significant regulatory actions ``shall, to the
extent permitted by law, be offset by the elimination of existing costs
associated with at least 10 prior regulations.'' OMB's guidance to
agencies implementing E.O. 14192 defines two types of E.O. 14192
actions: an E.O. 14192 regulatory action and an E.O. 14192 deregulatory
action.\1\ The guidance defines an E.O. 14192 deregulatory action as
``an action that has been finalized and has total costs less than
zero.'' \2\ The guidance further explains that ``an E.O. 14192
deregulatory action qualifies as both (1) one of the actions used to
satisfy the provision to repeal or revise at least 10 existing
regulations for each regulation issued, and (2) a cost savings for
purposes of the total incremental cost allowance.'' \3\ OMB determined
that this final rule is an E.O. 14192 deregulatory action.
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\1\ OMB, M-25-20, Guidance Implementing Section 3 of Executive
Order 14192, Titled ``Unleashing Prosperity Through Deregulation''
(Mar. 26, 2025), <a href="https://www.whitehouse.gov/wp-content/uploads/2025/02/M-25-20-Guidance-Implementing-Section-3-of-Executive-Order-14192-Titled-Unleashing-Prosperity-Through-Deregulation.pdf">https://www.whitehouse.gov/wp-content/uploads/2025/02/M-25-20-Guidance-Implementing-Section-3-of-Executive-Order-14192-Titled-Unleashing-Prosperity-Through-Deregulation.pdf</a>.
\2\ Id. at 4.
\3\ Id.
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C. Paperwork Reduction Act
The removal of old Sec. 4.1(b)-(c) will eliminate the need for the
Paperwork Reduction Act (PRA) burden associated with these rule
provisions, currently estimated at 60 burden hours and $9,000 annually.
After publication of this final rule, the FTC will submit a request to
OMB to revise PRA information collections associated with OMB Control
No. 3084-0169 (FTC Administrative Activities).
D. Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Office of Information and Regulatory Affairs designated this rule
as not a ``major rule,'' as defined by 5 U.S.C. 804(2).
List of Subjects
16 CFR Part 4
Administrative practice and procedure, Freedom of information,
Public record, Sunshine Act.
16 CFR Part 5
Administrative practice and procedure, Conflicts of interest,
Government employees.
For the reasons set forth in the preamble, under the authority of
15 U.S.C. 46(g), the Federal Trade Commission amends title 16, chapter
I, subchapter A of the Code of Federal Regulations as follows:
PART 4--MISCELLANEOUS RULES
0
1. The authority citation for part 4 continues to read as follows:
Authority: 15 U.S.C. 46.
0
2. In Sec. 4.1, add paragraph (a)(3) and remove and reserve paragraphs
(b) and (c) to read as follows:
4.1 Appearances.
(a) * * *
(3) Former Commission employees. Former employees of the Commission
must comply with the restrictions described in Sec. 5.30.
* * * * *
0
3. In Sec. 4.9, remove and reserve paragraph (b)(10)(ii).
0
4. Revise and republish part 5 to read as follows:
PART 5--STANDARDS OF CONDUCT
Sec.
5.1 Cross-reference to executive branch-wide regulations.
5.2 Waiver of insubstantial financial conflicts.
5.10 Cross-reference to executive branch-wide regulations.
5.30 General prohibitions for former employees.
5.50 Submission of information.
5.51 Involvement of other agencies or authorities.
5.52 Investigation or proceeding.
5.53 Sanctions.
5.54 Judicial review.
Authority: 5 U.S.C. 7301; 5 U.S.C. 13105, 13109, 13124, 13142;
15 U.S.C. 46(g); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215,
as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306; 5
CFR part 2635.
Subpart A--Employee Conduct Standards and Financial Conflicts of
Interest
Sec. 5.1 Cross-reference to executive branch-wide regulations.
All employees, including Commissioners, political appointees, and
special Government employees, of the Federal Trade Commission (FTC) are
subject to and should refer to the ``Standards of Ethical Conduct for
Employees of the Executive Branch'' at 5 CFR part 2635 (``executive
branch-wide Standards of Conduct'') and to the FTC regulations at 5 CFR
part 5701 (fundraising and prior approval for outside employment) that
supplement the executive branch-wide Standards of Conduct.
Sec. 5.2 Waiver of insubstantial financial conflicts.
(a) Pursuant to 18 U.S.C. 208(b)(1) and 5 CFR 2640.301, certain
disqualifying financial interests may be waived by the FTC upon a
written determination that they are not so substantial as to be deemed
likely to affect the integrity of an employee's services.
(b) Employees or special Government employees will not be subject
to remedial or disciplinary action or to criminal prosecution under 18
U.S.C. 208(a), if they make a full disclosure in writing to the
official responsible for their appointment of the nature and
circumstances of the particular matter involved and of their
conflicting financial interest relating thereto, and receive in advance
a written determination made by such official that the interest is not
so substantial as to be deemed likely to affect the integrity of the
services which the Government may expect from the employee or special
Government employee.
(c) Prior to issuing a written determination as described in
paragraph (b) of this section, the official responsible for appointment
must obtain from the FTC's Designated Agency Ethics Official a written
recommendation to issue the Section 208 waiver. Pursuant to 5 CFR
2640.303, the FTC's Designated Agency Ethics Official must consult with
the U.S. Office of Government Ethics prior to issuing the written
recommendation.
(d) For the purposes of paragraph (b) of this section, the
``official responsible for appointment'' is the Executive Director in
all cases where the employee is classified at grade GS-15 or below, or
at a comparable pay level, except that each Commissioner is the
``official responsible for appointment'' of advisors in the
Commissioner's immediate office, and the Inspector
[[Page 60513]]
General is the ``official responsible for appointment'' of employees in
the Office of the Inspector General.
(e) In all other cases (except with respect to the Chairman himself
or the Inspector General), the Chairman is the ``official responsible
for appointment.''
Subpart B--Financial Disclosure Requirements
Sec. 5.10 Cross-reference to executive branch-wide regulations.
Employees, including Commissioners, political appointees, and
special Government employees, of the Federal Trade Commission are
subject to and should refer to the executive branch-wide financial
disclosure regulations at 5 CFR part 2634, and to the procedures for
filing and review of financial disclosure reports found in Chapter 5 of
the FTC Administrative Manual.
Subpart C--[Reserved]
Subpart D--Post-Government Employment Restrictions
Sec. 5.30 General prohibitions for former employees.
(a) Former employees of the Commission must comply with the
requirements of 18 U.S.C. 207 and its implementing regulations at 5 CFR
part 2641 (post-government employment conflict of interest
restrictions), 18 U.S.C. 203 (compensation for representational
services), 41 U.S.C. 2104 (compensation from contractors), and any
other applicable laws, regulations, or rules.
(b) Former employees should be aware that, among other
restrictions, 18 U.S.C. 207 generally:
(1) Prohibits former employees from knowingly, with the intent to
influence, communicating to, or appearing before, an employee of the
United States on behalf of anyone (other than themselves or the United
States) in connection with a particular matter involving a specific
party or parties, in which they participated personally and
substantially as employees of the Commission, and in which the United
States is a party or has a direct and substantial interest; \1\
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\1\ It is important to note that the same particular matter may
continue in another form or in part. In determining whether two
particular matters involving specific parties are the same, all
relevant factors should be considered, including the extent to which
the matters involve the same basic facts, the same or related
parties, related issues, the same confidential information, and the
amount of time elapsed. 5 CFR 2641.201(h)(5). For example, where a
former employee intends to participate in an investigation of
compliance with a Commission order, submission of a request to
reopen an order, or a proceeding with respect to reopening an order,
the matter will be considered the same as the adjudicative
proceeding or investigation that resulted in the order. A former
employee who is uncertain whether the matter in which they plan to
participate is wholly separate from any matter that was pending
during their tenure should seek advice from the FTC Designated
Agency Ethics Official.
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(2) Restricts former employees from representing anyone (other than
themselves or the United States) before a Federal agency regarding a
particular matter involving a specific party or parties pending under
their official responsibility during their last year of Government
service for two years after they leave the Commission; and
(3) Imposes upon former ``senior'' Commission employees who are
subject to 18 U.S.C. 207(c) a one-year ``cooling off'' period (this
period may vary depending on any applicable Ethics Pledge requirements)
in which such former employees must not make any communication to, or
appearance before, any FTC employee to seek official action on behalf
of anyone (other than themselves or the United States).
(c) Former employees who are attorneys, and their firms, should
consult their respective State bar rules regarding conflicts that are
imputed to them and their firms.
Subpart E--Disciplinary Actions Concerning Ethics Requirements and
Post-Government Employment Restrictions
Sec. 5.50 Submission of information.
Any person may submit a written statement to the FTC's General
Counsel, the Designated Agency Ethics Official (DAEO), or the Inspector
General, where appropriate, setting forth information indicating a
possible violation of subparts A-B or D of this part or 18 U.S.C. 207.
Sec. 5.51 Involvement of other agencies or authorities.
(a) The General Counsel or DAEO will make a preliminary
determination of whether the matter warrants or requires the
involvement of other agencies or authorities. If so, the General
Counsel or DAEO will expeditiously transmit any available information
to the agency's Inspector General or else to the Department of Justice
or the U.S. Office of Government Ethics, as appropriate.
(b) When the employee or former employee involved is an attorney,
the General Counsel will also determine whether the matter should be
referred to the disciplinary committee of the bar(s) of which the
attorney is a member.
(c) If the General Counsel or DAEO transmits information alleging a
crime or severe misconduct to the Department of Justice, U.S. Office of
Government Ethics, or bar disciplinary authority under paragraphs (a)
or (b) of this section, the General Counsel or DAEO will also notify
the agency's Inspector General.
Sec. 5.52 Investigation or proceeding.
(a) The Office of the General Counsel will ensure that the agency
cooperates fully in any investigation of possible violations of
subparts A-B or D of this part or 18 U.S.C. 207 by the Office of
Inspector General, the Department of Justice, or the U.S. Office of
Government Ethics.
(b) Upon the conclusion of an investigation by the Inspector
General or a prosecution by the Department of Justice, the Commission
will request that the Office of Inspector General provide the
Commission with a report.
Sec. 5.53 Sanctions.
When either an employee or former employee is convicted of
violating 18 U.S.C. 207 or other Federal laws related to conduct
described in this part, or the factual findings of the Inspector
General's report support a conclusion that the employee or former
employee violated subparts A-B or D of this part, the Commission may
adopt the record of the criminal or civil proceeding or Inspector
General report as its record. The Commission may order such additional
disciplinary action as it deems warranted, including:
(a) Reprimand;
(b) Suspension from participating in a particular matter or matters
before the Commission; or
(c) Prohibiting the person from making, with the intent to
influence, any formal or informal appearance before, or any oral or
written communication to, an FTC employee on any matter or business on
behalf of any other person (except the United States) for a period not
to exceed 5 years.
Sec. 5.54 Judicial review.
A person against whom the Commission has issued an order imposing
disciplinary action under this part may seek judicial review of the
Commission's determination in the United States District Court for the
District of Columbia by filing a petition for such review within 60
days of receipt of notice of the Commission's final decision.
By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2026-19598 Filed 9-23-26; 8:45 am]
BILLING CODE 6750-01-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.