II 

116TH CONGRESS 

1ST SESSION S. 573 

To require the Securities and Exchange Commission to carry out a study 

of Rule 10b5–1 trading plans, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 27, 2019 

Mr. VAN HOLLEN (for himself and Mrs. FISCHER) introduced the following 

bill; which was read twice and referred to the Committee on Banking, 

Housing, and Urban Affairs 

A BILL 

To require the Securities and Exchange Commission to carry 

out a study of Rule 10b5–1 trading plans, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Promoting Trans5 parent Standards for Corporate Insiders Act’’. 

6 SEC. 2. SEC STUDY. 

7 (a) DEFINITIONS.—In this section— 

8 (1) the term ‘‘Commission’’ means the Securi9 ties and Exchange Commission; 


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1 (2) the term ‘‘Rule 10b5–1’’ means section 

2 240.10b5–1 of title 17, Code of Federal Regulations; 

3 and 

4 (3) the term ‘‘trading plan’’ means a plan de5 scribed in paragraph (c)(1)(i)(A)(3) of Rule 10b5– 

6 1. 

7 (b) STUDY.— 

8 (1) IN GENERAL.—The Commission shall carry 

9 out a study of whether Rule 10b5–1 should be 

10 amended to— 

11 (A) limit the ability of issuers and issuer 

12 insiders to adopt a trading plan to a period 

13 during which the issuer or issuer insider, as ap14 plicable, is permitted to buy or sell securities 

15 during issuer-adopted trading windows; 

16 (B) limit the ability of issuers and issuer 

17 insiders to adopt multiple trading plans; 

18 (C) establish a mandatory delay during the 

19 period beginning on the date on which a trading 

20 plan is adopted and ending on the date on 

21 which the first trade is executed under such a 

22 plan; 

23 (D) with respect to a delay established 

24 under subparagraph (C), and depending on the 


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1 findings of the Commission under subparagraph 

2 (A)— 

3 (i) impose the same delay for trading 

4 plans adopted during an issuer-adopted 

5 trading window as opposed to outside of 

6 such a window; and 

7 (ii) provide an exception to such a 

8 delay; 

9 (E) limit the frequency with which issuers 

10 and issuer insiders may modify or cancel trad11 ing plans; 

12 (F) require issuers and issuer insiders to 

13 file with the Commission any adoption of, 

14 amendment to, termination of, and transaction 

15 under a trading plan; or 

16 (G) require the board of directors of an 

17 issuer that has adopted a trading plan to— 

18 (i) adopt policies governing trading 

19 plan practices; 

20 (ii) periodically monitor transactions 

21 made under the trading plan; and 

22 (iii) ensure that the policies of the 

23 issuer discuss the use of the trading plan 

24 in the context of guidelines or requireVerDate Sep 11 2014 04:27 Mar 05, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S573.IS S573

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1 ments with respect to equity hedging, hold2 ing, and ownership. 

3 (2) ADDITIONAL CONSIDERATIONS.—In car4 rying out the study required under paragraph (1), 

5 the Commission shall consider, with respect to each 

6 amendment considered by the Commission under 

7 that paragraph— 

8 (A) how the amendment may clarify and 

9 enhance existing prohibitions against insider 

10 trading; 

11 (B) the impact that the amendment may 

12 have on the ability of an issuer to attract a per13 son to become an issuer insider; 

14 (C) the impact that the amendment may 

15 have on capital formation; 

16 (D) the impact that the amendment may 

17 have on the willingness of an issuer to operate 

18 as a public company; and 

19 (E) any other consideration that the Com20 mission considers necessary and appropriate for 

21 the protection of investors. 

22 (c) REPORT.—Not later than 1 year after the date 

23 of enactment of this Act, the Commission shall submit to 

24 the Committee on Banking, Housing, and Urban Affairs 

25 of the Senate and the Committee on Financial Services 


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1 of the House of Representatives a report that contains all 

2 findings and determinations made in carrying out the 

3 study required under subsection (b). 

4 (d) RULEMAKING.—After completing the study re5 quired under subsection (b), the Commission shall, subject 

6 to public notice and comment, amend Rule 10b5–1 in a 

7 manner that is consistent with the results of the study. 

Æ 


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