Exchange Act Rules: Manipulative and Deceptive Devices and Contrivances: Rule 10b5-1
(Questions 120.29, 120.30, and 120.31)
- Directors and officers are currently subject to a mandatory cooling off period that is the later of 90 days after the plan’s adoption, or two business days following the disclosure of the issuer’s financial results in Form 10-Q or Form 10-K for the fiscal quarter when the plan was adopted. The day that Form 10-Q or Form 10-K is filed (whether before or after trading opens) does not count as a business day. For example, if Form 10-K is filed on Monday, the cooling off period applies to Tuesday and Wednesday.
- The rules contain limits on the use of multiple overlapping insider trading plans. An open-market transaction conducted at the direction of a 401(k) plan administrator to match a contribution by the participant with employer stock is not an overlapping plan for Rule 10b5-1.