In December 2022, the U.S. Securities and Exchange Commission (the “SEC”) amended rules relating to insider trading arrangements and related disclosures. The amendments added conditions to the availability of the affirmative defense to insider trading liability contained in Rule 10b5-1 under the Securities Exchange Act of 1934 (the “Exchange Act”). The amendments were designed to address concerns regarding alleged abuse of the rule by insiders to trade securities on the basis of material nonpublic information (“MNPI”). In addition, the amendments imposed new disclosure requirements regarding an issuer’s insider trading policies and procedures and the adoption, modification, and termination of Rule 10b5-1 plans and similar trading arrangements by directors and officers, as well as new disclosure requirements for executive compensation for certain equity awards made close in time to the issuer’s disclosure of MNPI.

Read the complete piece on the Harvard Law School Forum on Corporate Governance here.