Today, speaking at a conference, Securities and Exchange Commission Chair Gary Gensler shared some thoughts regarding Rule 10b5-1 plans and how the SEC might "freshen up" the rule. The Chair noted that currently there is no required cooling off period required when an insider establishes a plan and then makes a first trade pursuant to the trading plan. He noted that various proposals, requiring anywhere from four- to six-month cooling off periods from program establishment, have received bipartisan support and merit consideration. The Chair also noted that currently are no limitations on when 10b5-1 plans can be canceled, which seems "upside-down." As a result, he has requested that the Staff consider limitations on when and how plans can be canceled. The Chair noted that there are no mandatory disclosure requirements regarding Rule 10b5-1 plans, and that more disclosures regarding adoption, modification and terms of such plans would enhance confidence in the markets. Finally, he noted that there should be a limit on the number of plans that an insider could adopt.

The Chair also noted that he has asked the Staff to consider additional changes to the rule, including its intersection with company stock buybacks. For the full text of his prepared remarks, see here.

Visit us at

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe - Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2020. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.