Rule 10b-5 Risk Review & Insider Trading Policies
Help your corporate officers and company manage insider-trading risk with practical policies and properly structured Rule 10b5-1 trading plans.
EXECUTIVE COMPLIANCE
Navigating the Minefield of Insider Trading
Having a compliance manual in place is only one part of the job. Under Rule 206(4)-7, SEC-registered advisers must review their policies and procedures at least annually for adequacy and the effectiveness of implementation. The annual review is most useful when it looks at how the firm is actually operating, what changed during the year, and where the program may need to be updated.
At Ishimbayev Law Firm, we help advisers approach the annual review and ongoing compliance process in a practical way. We support Chief Compliance Officers and management teams with targeted testing, issue-spotting, policy updates, and day-to-day legal guidance so the program stays aligned with the business as it evolves.
Services
Our Rule 10b-5 Risk Review Services Include:
Insider Trading Policy Drafting:
Creating or updating your company’s overarching Insider Trading Policy (ITP) to clearly define MNPI, establish strict blackout/window periods, and assign Chief Compliance Officer oversight.
10b5-1 Trading Plan Structuring:
Designing executive trading plans that are structured to comply with current SEC rules, including mandatory cooling-off periods, restrictions on overlapping plans, and the single-trade limitation.
Pre-Clearance Protocol Management:
Establishing a practical, documented workflow for officers, directors, and key employees to request and receive legal clearance prior to executing any open-market trades.
Section 16 Filings Coordination:
Coordinating Section 16 reporting, including Form 4 filings generally due by the end of the second business day after execution, and reviewing potential short-swing profit issues separately.
why choose us
Why Partner with Ishimbayev Law Firm?
Mastering the New SEC Rules
The era of flexible, easily amendable 10b5-1 plans is over. We guide your executives through the SEC’s updated requirements, including the applicable cooling-off period for directors and officers, and review plans for issues that could draw regulatory scrutiny.
Enabling Executive Liquidity
We understand that executives need to sell shares to pay taxes, buy homes, and diversify their portfolios. We act as strategic partners, building the legal runway that helps them plan equity sales while managing legal and reputational risk.
Corporate Safe Harbor
If an executive trades while aware of MNPI, company policies and controls may also come under scrutiny. A thoughtful insider-trading policy is not a complete shield, but it can help show that the company took reasonable steps to manage trading risk.
Clear, Scenario-Based Training
A policy has limited value if employees do not understand it. We provide targeted training to your board and management team, using real-world scenarios to explain exactly what constitutes MNPI and how to avoid accidental tipping.
FAQ
Frequently Asked Questions
What is a 10b5-1 Trading Plan?
A 10b5-1 plan is a written contract established by a corporate insider to buy or sell a predetermined number of shares at a predetermined time or price. If the plan is created when the insider does not possess MNPI, it may provide an affirmative defense against insider trading allegations when the trades are eventually executed, even if the insider later becomes aware of MNPI before the scheduled trade occurs.
What are the new "cooling-off" periods for 10b5-1 plans?
Under recent SEC amendments, officers and directors must wait the later of (1) 90 days following plan adoption/modification, or (2) two business days following the filing of the Form 10-Q or 10-K for the quarter in which the plan was adopted, up to a maximum of 120 days, before any trades can occur.
Does an OTC company need an Insider Trading Policy?
In most cases, yes. Rule 10b-5 applies to securities traded on the NYSE, Nasdaq, OTC Markets, and other markets. OTC issuers can face insider-trading, promotional, and market-manipulation scrutiny, so written controls are especially important.
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