IIB 117TH CONGRESS 1ST SESSION H. R. 1528 IN THE SENATE OF THE UNITED STATES APRIL 22, 2021 Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs AN ACT 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 Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 17:57 Apr 23, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1528.RFS H1528 pamtmann on DSKBC07HB2PROD with BILLS 2 HR 1528 RFS SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Promoting Trans- 2 parent Standards for Corporate Insiders Act’’. 3 SEC. 2. SEC STUDY. 4 (a) STUDY.— 5 (1) IN GENERAL.—The Securities and Ex- 6 change Commission shall carry out a study of 7 whether Rule 10b5–1 (17 CFR 240.10b5–1) should 8 be amended to— 9 (A) limit the ability of issuers and issuer 10 insiders to adopt a plan described under para- 11 graph (c)(1)(i)(A)(3) of Rule 10b5–1 (‘‘trading 12 plan’’) to a time when the issuer or issuer in- 13 sider is permitted to buy or sell securities dur- 14 ing issuer-adopted trading windows; 15 (B) limit the ability of issuers and issuer 16 insiders to adopt multiple trading plans; 17 (C) establish a mandatory delay between 18 the adoption of a trading plan and the execu- 19 tion of the first trade pursuant to such a plan 20 and, if so and depending on the Commission’s 21 findings with respect to subparagraph (A)— 22 (i) whether any such delay should be 23 the same for trading plans adopted during 24 an issuer-adopted trading window as op- 25 posed to outside of such a window; and 26 VerDate Sep 11 2014 17:57 Apr 23, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1528.RFS H1528 pamtmann on DSKBC07HB2PROD with BILLS 3 HR 1528 RFS (ii) whether any exceptions to such a 1 delay are appropriate; 2 (D) limit the frequency that issuers and 3 issuer insiders may modify or cancel trading 4 plans; 5 (E) require issuers and issuer insiders to 6 file with the Commission trading plan adop- 7 tions, amendments, terminations and trans- 8 actions; or 9 (F) require boards of issuers that have 10 adopted a trading plan to— 11 (i) adopt policies covering trading 12 plan practices; 13 (ii) periodically monitor trading plan 14 transactions; and 15 (iii) ensure that issuer policies discuss 16 trading plan use in the context of guide- 17 lines or requirements on equity hedging, 18 holding, and ownership. 19 (2) ADDITIONAL CONSIDERATIONS.—In car- 20 rying out the study required under paragraph (1), 21 the Commission shall consider— 22 (A) how any such amendments may clarify 23 and enhance existing prohibitions against in- 24 sider trading; 25 VerDate Sep 11 2014 17:57 Apr 23, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1528.RFS H1528 pamtmann on DSKBC07HB2PROD with BILLS 4 HR 1528 RFS (B) the impact any such amendments may 1 have on the ability of issuers to attract persons 2 to become an issuer insider; 3 (C) the impact any such amendments may 4 have on capital formation; 5 (D) the impact any such amendments may 6 have on an issuer’s willingness to operate as a 7 public company; and 8 (E) any other consideration that the Com- 9 mission considers necessary and appropriate for 10 the protection of investors. 11 (b) REPORT.—Not later than the end of the 1-year 12 period beginning on the date of the enactment of this Act, 13 the Commission shall issue a report to the Committee on 14 Financial Services of the House of Representatives and 15 the Committee on Banking, Housing, and Urban Affairs 16 of the Senate containing all findings and determinations 17 made in carrying out the study required under section (a). 18 (c) RULEMAKING.—After the completion of the study 19 required under subsection (a), the Commission shall, 20 VerDate Sep 11 2014 17:57 Apr 23, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1528.RFS H1528 pamtmann on DSKBC07HB2PROD with BILLS 5 HR 1528 RFS subject to public notice and comment, revise Rule 10b5– 1 1 consistent with the results of such study. 2 Passed the House of Representatives April 20, 2021. Attest: CHERYL L. JOHNSON, Clerk. VerDate Sep 11 2014 17:57 Apr 23, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H1528.RFS H1528 pamtmann on DSKBC07HB2PROD with BILLS