What is Rule 10b5-1?
What is a 10b5-1 trading plan?
Who can benefit from a 10b5-1 trading plan?

What is Rule 10b5-1?

Rule 10b5-1, adopted by the Securities and Exchange Commission (SEC) in 2000, allows insiders of publicly traded companies to structure trading programs and execute predetermined securities transactions in situations where they previously may not have due to concerns over potential insider-trading liability. Through the implementation of a properly constructed plan, Rule 10b5-1 provides an affirmative defense for corporate insiders to avoid liability for conducting insider-trading.

What is a 10b5-1 trading plan?

While trading plans vary in terms of complexity, every 10b5-1 trading plan must specify the amount, price, and date of the transactions to be completed or provide a written formula for determining amounts, prices, and dates. Additionally, the individual entering into the 10b5-1 plan must do so at a time when he or she is unaware of material, non-public information.

10b5-1 plans provide increased opportunity and flexibility in trading securities to insiders of publicly traded companies by allowing them to trade company shares at all times – not just during open trading windows – as long as the criteria for the trading was set in the past at a time when the person was not aware of any material, non-public information.

Who can benefit from a 10b5-1 trading plan?

Officers, directors, and other insiders of publicly traded companies can all benefit from the increased opportunity and flexibility in trading securities that a 10b5-1 plan provides.

Please contact us for more information on 10b5-1 trading plans*.

*Securities offered through Investors Capital Corporation 800-949-1422. Member FINRA/SIPC. Advisory Services offered through Investors Capital Advisory, 230 Broadway, Lynnfield, MA 01940. Mark Foreman is securities licensed in Minnesota. Privacy Policy

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