In his prepared remarks before the CFO Network Summit, SEC Chair Gary Gensler announced that he asked SEC staff to recommend changes to Rule 10b5-1 for the Commission’s consideration that may include four- to six-month cooling off periods, plan cancellation restrictions, mandatory disclosure requirements, and limits on the adoption of multiple plans, in addition to other reforms including the relation between Rule 10b5-1 and company share buybacks. Last month, we reported that former SEC Acting Chair Allison Lee indicated to Senate Banking Committee members Elizabeth Warren (D-MA), Sherrod Brown (D-OH), and Chris Van Hollen (D-MD), in response to their February 2021 letter concerning abusive Rule 10b5-1 plan practices (which we reported on here), that she had instructed staff to review the rule for possible changes, including as respects, e.g., public disclosure, cooling off periods, and short-swing profits.
As we reported last week, a panel discussion on Rule 10b5-1 plans is on the June 10 Investor Advisory Committee meeting agenda.
See this Sullivan & Cromwell memo; these posts from Jim Hamilton’s World of Securities Regulation, Cooley and Bryan Cave; and these articles from the WSJ and Pensions & Investments.
This post first appeared in the weekly Society Alert!