Effective Date Set for Amendments to Insider Trading Rules

The effective date for SEC amendments to Exchange Act Rule 10b5-1 ("Trading on the basis of material nonpublic information") is February 27, 2023. The notice was published in the Federal Register.

As previously covered, the rule amendments impose new conditions to obtain an affirmative defense against allegations of insider trading. The rule amendments (i) establish a cooling off period between entry into a plan and initiation of trading, (ii) prohibit the use of multiple, overlapping Rule 10b5-1 plans, (iii) strengthen the "good faith" requirement and (iv) require disclosures as to the limits of a Rule 10b5-1 trade, including the amount of the securities that should be bought or sold, the acceptable trading prices and the permitted trading days.