Rule 10b5-1 Plans

Rule 10b5-1 Plans
USA
The SEC has adopted Rule 10b5-1 of the Exchange Act which provides an affirmative defense to Rule 10b-5 insider trading liability in circumstances where a trade was not made on the basis of material non-public information. Rule 10b5-1 plans, which are typically implemented by a company after it has gone public, are developed in compliances with Rule 10b5-1 and set out restrictions for purchases or sales of equity securities of the company. A Rule 10b5-1 plan permits corporate officers and directors to sell stock in an orderly manner without fear of insider trading liability.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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Look at other dictionaries:

  • Rule 10b5-1 — A rule established by the Securities Exchange Commission (SEC) that allows insiders of publicly traded corporations to set up a trading plan for selling stocks they own. Rule 10b5 1 allows major holders to sell a predetermined number of shares at …   Investment dictionary

  • SEC Rule 10b5-1 — is an administrative rule [http://www.sec.gov/rules/final/33 7881.htm enacted] by the United States Securities and Exchange Commission (SEC) in 2000. The SEC states that Rule 10b5 1 was enacted in order to resolve an… …   Wikipedia

  • Insider trading — is the trading of a corporation s stock or other securities (e.g. bonds or stock options) by individuals with potential access to non public information about the company. In most countries, trading by corporate insiders such as officers, key… …   Wikipedia

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