SEC Amends Rule 10b5-1

Introduction

In August 2000, the Securities and Exchange Commission ("SEC") adopted Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which, among other things, established an affirmative defense to a charge of transacting in a security on the basis of material nonpublic information ("MNPI") for trades executed pursuant to a binding arrangement entered into at a time when a person was not in possession of material non-public information about the issuer of the security or the security itself. These arrangements have become known as 10b5-1 Plans. On December 14, 2022, the SEC adopted amendments to Rule 10b5-1 designed to address concerns about opportunistic trading on MNPI pursuant to 10b5-1 Plans. In short, the amendments: (i) condition the availability of the affirmative defense afforded by 10b5-1 Plans on the inclusion of "cooling-off" periods for directors, officers and persons other than the issuer; (ii) create