SEC Adopts Amendments To Insider Trading Rules And Reporting Requirements

In late 2022, the U.S. Securities and Exchange Commission (SEC) adopted final amendments to certain rules and reporting requirements concerning insider trading arrangements, including Rule 10b5-1(c) under the Securities Exchange Act of 1934 (Exchange Act).

Rule 10b5-1(c) provides affirmative defences for issuers and insiders against insider trading liability under section 10(b) of the Exchange Act and Rule 10b-5 thereunder. It permits issuers and insiders to adopt a written plan (known as a "10b5-1 plan") that would carry out pre-planned trades on the basis of pre-established criteria, even if they later become aware of material non-public information (MNPI). The rule amendments impose additional conditions that must be met in order to have the affirmative defences under Rule 10b5-1(c) available. These rule amendments apply to all securities that are listed on a U.S. national securities exchange or are otherwise registered under section 12 of the Exchange Act,