SEC Issues Additional C&DIs on Rule 10b5-1 Amendments | Practical Law

SEC Issues Additional C&DIs on Rule 10b5-1 Amendments | Practical Law

The Securities and Exchange Commission (SEC) Division of Corporation Finance issued new compliance and disclosure interpretations (C&DIs) addressing questions on the recent rule amendments to Rule 10b5-1 and related disclosure requirements.

SEC Issues Additional C&DIs on Rule 10b5-1 Amendments

Practical Law Legal Update w-040-5452 (Approx. 4 pages)

SEC Issues Additional C&DIs on Rule 10b5-1 Amendments

by Practical Law Corporate & Securities
Published on 28 Aug 2023 • USA (National/Federal)
The Securities and Exchange Commission (SEC) Division of Corporation Finance issued new compliance and disclosure interpretations (C&DIs) addressing questions on the recent rule amendments to Rule 10b5-1 and related disclosure requirements.
On August 25, 2023, the SEC issued additional compliance and disclosure interpretations (C&DIs) addressing questions on the recent rule amendments to Rule 10b5-1 and related disclosure requirements:
  • Exchange Act Section 16 and Related Rules and Forms C&DIs. New Question 135.04 addresses the applicability of the new checkbox on Form 4 to Rule 10b5-1 plans adopted before the amendments to Rule 10b5-1 became effective.
  • Regulation S-K C&DIs. New Questions 133A.01 and 133A.02 address questions relating to the disclosure requirements of Item 408(a) of Regulation S-K as they apply to:
    • expired or completed trading plans; and
    • any trading arrangement covering securities in which an officer or director has a pecuniary interest.
  • Exchange Act Rules C&DIs. New Questions 120.29-31 discuss:
    • how to determine the cooling-off period required under Rule 10b5-1(c)(1)(ii)(B)(1);
    • whether a 401(k) plan is an overlapping plan for purposes of Rule 10b5-1(c)(1)(ii)(D) that would disqualify a plan participant from relying on Rule 10b5-1 for a concurrent open-market trading plan; and
    • the applicability of the Form 4 checkbox to Rule 10b5-1 plans adopted before the amendments to Rule 10b5-1 became effective (identical to Exchange Act Section 16 C&DI Question 135.04 referenced above).
For more information on the amendments to Rule 10b5-1 and related disclosures, see Legal Updates, SEC Adopts Amendments to Rule 10b5-1 and Related Disclosure Requirements and SEC Issues New C&DIs Related to Rule 10b5-1 Plans. For information on compliance dates relating to Rule 10b5-1 plan disclosures, see SEC Rule Change Compliance Calendar and Filing Checklist.
For more on Rule 10b5-1 plans generally, see Practice Note, Rule 10b5-1 Trading Plans and Rule 10b5-1 Plans: Best Practices Checklist.