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[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 573 Introduced in Senate (IS)]

<DOC>

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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Promoting Transparent Standards for 
Corporate Insiders Act''.

SEC. 2. SEC STUDY.

    (a) Definitions.--In this section--
            (1) the term ``Commission'' means the Securities and 
        Exchange Commission;
            (2) the term ``Rule 10b5-1'' means section 240.10b5-1 of 
        title 17, Code of Federal Regulations; and
            (3) the term ``trading plan'' means a plan described in 
        paragraph (c)(1)(i)(A)(3) of Rule 10b5-1.
    (b) Study.--
            (1) In general.--The Commission shall carry out a study of 
        whether Rule 10b5-1 should be amended to--
                    (A) limit the ability of issuers and issuer 
                insiders to adopt a trading plan to a period during 
                which the issuer or issuer insider, as applicable, is 
                permitted to buy or sell securities during issuer-
                adopted trading windows;
                    (B) limit the ability of issuers and issuer 
                insiders to adopt multiple trading plans;
                    (C) establish a mandatory delay during the period 
                beginning on the date on which a trading plan is 
                adopted and ending on the date on which the first trade 
                is executed under such a plan;
                    (D) with respect to a delay established under 
                subparagraph (C), and depending on the findings of the 
                Commission under subparagraph (A)--
                            (i) impose the same delay for trading plans 
                        adopted during an issuer-adopted trading window 
                        as opposed to outside of such a window; and
                            (ii) provide an exception to such a delay;
                    (E) limit the frequency with which issuers and 
                issuer insiders may modify or cancel trading plans;
                    (F) require issuers and issuer insiders to file 
                with the Commission any adoption of, amendment to, 
                termination of, and transaction under a trading plan; 
                or
                    (G) require the board of directors of an issuer 
                that has adopted a trading plan to--
                            (i) adopt policies governing trading plan 
                        practices;
                            (ii) periodically monitor transactions made 
                        under the trading plan; and
                            (iii) ensure that the policies of the 
                        issuer discuss the use of the trading plan in 
                        the context of guidelines or requirements with 
                        respect to equity hedging, holding, and 
                        ownership.
            (2) Additional considerations.--In carrying out the study 
        required under paragraph (1), the Commission shall consider, 
        with respect to each amendment considered by the Commission 
        under that paragraph--
                    (A) how the amendment may clarify and enhance 
                existing prohibitions against insider trading;
                    (B) the impact that the amendment may have on the 
                ability of an issuer to attract a person to become an 
                issuer insider;
                    (C) the impact that the amendment may have on 
                capital formation;
                    (D) the impact that the amendment may have on the 
                willingness of an issuer to operate as a public 
                company; and
                    (E) any other consideration that the Commission 
                considers necessary and appropriate for the protection 
                of investors.
    (c) Report.--Not later than 1 year after the date of enactment of 
this Act, the Commission shall submit to the Committee on Banking, 
Housing, and Urban Affairs of the Senate and the Committee on Financial 
Services of the House of Representatives a report that contains all 
findings and determinations made in carrying out the study required 
under subsection (b).
    (d) Rulemaking.--After completing the study required under 
subsection (b), the Commission shall, subject to public notice and 
comment, amend Rule 10b5-1 in a manner that is consistent with the 
results of the study.
                                 <all>
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