Rule 10b5-1 Amendments – More Than Meets the Eye – Implementation Conundrums and Disclosure Challenges

With its December 14, 2022, “Insider Trading Arrangements and Related Disclosures” Final Rule, the SEC created questions and complexities concerning the adoption and use of Rule 10b5-1 plans.  Among other things, the Final Rule imposed new requirements in order to have an effective 10b5-1 plan, and created a new category of plan, a “non-Rule 10b5-1 trading arrangement”, leaving a raft of open questions about the use and disclosure of such plans.  New detailed disclosure requirements include quarterly disclosure of the details of director and executive officer trading plans, annual disclosure with respect to company’s insider trading policies as well as new executive compensation disclosures, all of which will require careful planning and disclosure control considerations.  Finally, the 10b5-1 amendments made significant changes to the section 16 reporting regime.  With a number of overlapping effective dates, companies must quickly develop and implement necessary policies, procedures and controls to address these amendments.  Faculty will discuss practical steps to implement these new rules.

In this Briefing faculty will:

• Review the details of the SEC’s Final Rule 10b5-1 amendments, including the requirements for effective 10b5-1 plans and the related (and unrelated) disclosure requirements now imposed on companies – 15 minutes
• Identify the necessary policies and procedures to implement amended Rule 10b5-1, including – 15 minutes
• The revised “good faith” requirement and officer and director certifications
• Cooling-off period considerations
• Restrictions on “overlapping” and “single-trade” plans
• Effects of modification and termination of plans
• Discuss the implications and steps necessary to develop effective disclosure controls and procedures required to monitor and report quarterly on the adoption, modification and termination of 10b5-1 trading plans and “non-Rule 10b5-1 trading arrangements” – 10-minutes
• Insider trading policies – why companies have them and how they should be modified to address the Rule 10b5-1 amendments – 5 minutes
• Board and compensation committee considerations regarding “close in time” option grants – 5 minutes
• Addressing necessary modifications to Section 16 compliance – 5 minutes
• Considerations affecting bona fide gifts under the 10b5-1 and section 16 amendments – 5 minutes

Who Should Attend:  Accountants and attorneys who deal with SEC reporting and disclosure and related accounting issues, including CFOs, controllers and their staff, internal auditors, partners of public accounting firms and their staff, in-house counsel and outside attorneys

Program Level:  Update 

Prerequisites:  None 

Advanced Preparation:  None

Faculty:

Gary M. Brown

Nelson Mullins Riley & Scarborough LLP

Erin Reeves McGinnis

Nelson Mullins Riley & Scarborough LLP