The US regulator has proposed amendments to Rule 10b5-1 to strengthen disclosure requirements and investor protections against insider trading. This proposal includes modifications that provide an affirmative defense for parties that regularly have access to important nonpublic information, such as corporate officers, directors and issuers.
SEC Chair Gary Gensler, said:
Gary Gensler
Over the past two decades, we’ve heard concerns about and seen gaps in Rule 10b5-1 — gaps that today’s proposals would help fill. These issues speak to the confidence that investors have in the markets. Anytime we can increase investor confidence in the markets, that’s a good thing. It helps investors deciding where to put their money. It lowers the cost of capital for businesses seeking to raise capital, grow, and innovate, and thus facilitates capital formation. I’m pleased to support today’s proposal and, subject to Commission approval, look forward to the public’s feedback.
If the proposal passes, it will impose a cooling off period before trading could begin under a plan, ban on overlapping trading plans, and it will limit single-trade plans to one trading plan per twelve-month period.
