8–K Trading Gap Act of 2021
Bill: H.R.4467 | Sponsor: Rep. Maloney, Carolyn B. (D-NY)
Policy area: Finance and Financial Sector

Summary:
8–K Trading Gap Act of 2021
This bill requires certain publicly traded companies to create policies reasonably designed to prevent executive officers and directors from trading their securities after a significant corporate event but before disclosing that event through a public filing. Certain companies required by regulation to adopt a code of ethics are exempt from this requirement.

To amend the Securities Exchange Act of 1934 to require the Securities 
   and Exchange Commission to issue rules that prohibit officers and 
directors of certain companies from trading securities in anticipation 
              of a current report, 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 ``8-K Trading Gap Act of 2021''.

SEC. 2. PROHIBITION ON CERTAIN TRADING IN ANTICIPATION OF A CURRENT 
              REPORT.

    The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is 
amended by inserting after section 10D the following:

``SEC. 10E. PROHIBITION ON CERTAIN TRADING IN ANTICIPATION OF A CURRENT 
              REPORT.

    ``(a) Prohibition.--Not later than 1 year after the date of 
enactment of this section, the Commission shall issue rules that 
require each issuer that is subject to reporting requirements under 
section 13(a) or 15(d) to establish and maintain policies, controls, 
and procedures that are reasonably designed to prohibit executive 
officers and directors of the issuer from purchasing, selling, or 
otherwise transferring any equity security of the issuer, directly or 
indirectly--
            ``(1) with respect to an event described in sections 1 
        through 6 of Form 8-K, between--
                    ``(A) the occurrence of such event; and
                    ``(B) the filing or furnishing of a current report 
                on Form 8-K with respect to such event; and
            ``(2) with respect to an event described in section 7 or 8 
        of Form 8-K, between--
                    ``(A) the date on which the issuer determines that 
                it will disclose such event; and
                    ``(B) the filing or furnishing of a current report 
                on Form 8-K with respect to such event.
    ``(b) Permissible Transactions.--In issuing rules under subsection 
(a), the Commission--
            ``(1) may exempt certain transactions that the Commission 
        determines is appropriate, including those that--
                    ``(A) occur automatically;
                    ``(B) are made pursuant to an advance election; or
                    ``(C) except as provided in paragraph (2), involve 
                a purchase or sale of equity securities that satisfies 
                the conditions under section 240.10b5-1(c) of title 17, 
                Code of Federal Regulations;
            ``(2) may not exempt from those rules a transaction made by 
        an executive officer or director of an issuer under a plan 
        that--
                    ``(A) is described in section 240.10b5-
                1(c)(1)(i)(A)(3) of title 17, Code of Federal 
                Regulations; and
                    ``(B) was adopted--
                            ``(i) with respect to an event described in 
                        sections 1 through 6 of Form 8-K, between--
                                    ``(I) the occurrence of such event; 
                                and
                                    ``(II) the filing or furnishing of 
                                a current report on Form 8-K with 
                                respect to such event; and
                            ``(ii) with respect to an event described 
                        in section 7 or 8 of Form 8-K, between--
                                    ``(I) the date on which the issuer 
                                determines that it will disclose such 
                                event; and
                                    ``(II) the filing or furnishing of 
                                a current report on Form 8-K with 
                                respect to such event; and
            ``(3) shall exempt from those rules--
                    ``(A) issuers required to adopt and administer a 
                code of ethics pursuant section 270.17j-1 of title 17, 
                Code of Federal Regulations, and any other issuers 
                registered under the Investment Company Act of 1940 
                whose investment advisers are required to adopt and 
                administer a code of ethics pursuant to section 
                275.204A-1 of title 17, Code of Federal Regulations; 
                and
                    ``(B) any event where such event is described in 
                sections 1 through 6 of Form 8-K and the issuer has 
                announced such event in a press release or other method 
                of dissemination that complies with the requirements of 
                section 101(e)(2) of Regulation FD (17 CFR Part 
                243.101(e)(2)).
    ``(c) Reference Effective Dates.--Each reference to a rule 
(including each reference to Form 8-K) under this section is a 
reference to such rule as in effect on the date of the enactment of 
this section.''.
                                 <all>