As reported in today's Society Alert, at an open meeting today, among other things, the SEC proposed amendments to Rule 10b5-1 and Rule 10b5-1 plan and insider trading policy disclosure requirements, and amendments to the share buyback disclosure requirements.
Based on the respective fact sheets, the Rule 10b5-1 and insider trading proposals (which received full Commission support) would:
- Add new conditions to the availability of the affirmative defense under Rule 10b5-1(c)(1)
- Create new disclosure requirements regarding issuers’ insider trading policies and regarding the adopting and termination (including modification) of Rule 10b5- 1 and certain other trading arrangements by directors, officers, and issuers
- Create new disclosure requirements for executive and director compensation regarding the timing of certain equity compensation awards
- Update Forms 4 and 5 to require Section 16 insiders to identify transactions made pursuant to Rule 10b5-1 and to disclose all gifts of securities on Form 4
The proposed amendments to the share buyback rules (supported by SEC Chair Gensler and Commissioners Crenshaw and Herren Lee) would require an issuer to provide more timely disclosure on a new Form SR regarding purchases of its equity securities for each day that it, or an affiliated purchaser, makes a share repurchase, and expand existing periodic disclosure requirements about these purchases.
Comments on these proposals are due 45 days after publication in the Federal Register. The Society, led by the Securities Law Committee, plans to comment on both the Rule 10b5-1/insider trading and share buyback disclosure proposals. Members interested in assisting with these comment letters should contact Kate Kelly at krkelly@fb.com or Ted Allen at tallen@societycorpgov.org.
The SEC also proposed rules on equity swaps, as outlined in this fact sheet, and proposed amendments to rules governing money market funds, as summarized here.
See the SEC’s release and statements from Chair Gensler and Commissioners Crenshaw, Herren Lee, Peirce, and Roisman on the Rule 10b5-1 plan and related disclosures proposal and the SEC’s release and statements from Chair Gensler and Commissioners Crenshaw, Herren Lee, Peirce (dissenting) and Roisman (dissenting) on the share buyback disclosure amendments.
Additional resources on these proposals are available on our Insider Trading/Rule 10b5-1 and Capital Allocation/Capital Structure pages, respectively.