Insider Trading & Regulation
Rule 10b5-1 plan
A pre-arranged written trading plan that lets an insider buy or sell on a fixed schedule, providing an affirmative defence against insider-trading liability.
Adopted while not in possession of material non-public information, a 10b5-1 plan fixes the amount, price and timing of future trades. Because the trades are automatic, they carry little signal: a sale under a 10b5-1 plan is closer to noise than to a discretionary exit. The 2023 SEC amendments added a mandatory cooling-off period to curb abuse.