117 S2211 IS: Promoting Transparent Standards for Corporate Insiders Act U.S. Senate 2021-06-24 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

II117th CONGRESS1st SessionS. 2211IN THE SENATE OF THE UNITED STATESJune 24, 2021Mr. 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 AffairsA BILLTo require the Securities and Exchange Commission to carry out a study of Rule 10b5–1 trading plans, and for other purposes.

1.

Short title

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

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, or any successor regulation; 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 180 days 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

Not later than 1 year after the date of enactment of this Act, 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 required under subsection (b).