10b5-1 plans
How to set up, modify, and terminate 10b5-1 trading plans.
A 10b5-1 plan is a pre-arranged trading plan that gives officers and directors an affirmative defense against insider trading claims.
Cooling-off periods (post-2023 amendments)
- Officers and directors: 90 days, or 2 business days after the next 10-Q or 10-K, whichever is later.
- Other employees: 30 days.
The system enforces these automatically.
Setting up a plan
Operations > 10b5-1 > New Plan. Enter the participant, the broker, the trade rules (number of shares, price thresholds, dates), and the start date. The system computes the earliest legal effective date.
Modifications
Modifications are treated as a new plan with a new cooling-off period. The system flags this in the wizard.
Form 4 disclosure (Wave 12 update)
Form 4 transactions made under an active 10b5-1 plan are auto-tagged with the Rule 10b5-1 disclosure. The Form 4 cover page includes the plan adoption date.
Plan termination
Termination is logged with the reason and timestamp. The system warns that a near-term termination may undercut the affirmative defense.