Rule 10b5-1

Rule 10b5-1 is a regulation under the Securities Exchange Act of 1934 that requires insiders of publicly traded companies to file a plan with the Securities and Exchange Commission (SEC) before trading their company's stock. The rule is designed to prevent insiders from using their access to material non-public information (MNPI) to make profitable trades.

The rule applies to any person who is an officer, director, or beneficial owner of more than 10% of a company's stock. Insiders must file a plan with the SEC at least two business days before they trade their company's stock. The plan must specify the amount of stock that the insider intends to trade, the price at which they intend to trade it, and the date on which they intend to trade it.

The rule also requires insiders to file a report with the SEC within two business days after they trade their company's stock. The report must include the date of the trade, the number of shares traded, and the price at which the trade was executed.

Rule 10b5-1 is designed to prevent insiders from using their access to MNPI to make profitable trades. By requiring insiders to file a plan with the SEC before they trade their company's stock, the rule gives the SEC time to investigate any potential violations. The rule also requires insiders to report their trades to the SEC within two business days, which helps to ensure that the public is aware of any insider trading activity.

Rule 10b5-1 is an important regulation that helps to protect investors from insider trading. The rule is clear and easy to understand, and it has been effective in deterring insider trading activity.