SEC Bulletin: Effective Dates for SEC’s New Insider Trading Disclosures

Registrants are now subject to the SEC’s amended insider trading rules that require new disclosures in their periodic reports. The SEC staff’s recently-released compliance and disclosure interpretations (C&DIs) provide guidance about the implementation dates for these disclosures. Registrants are encouraged to prepare now as the new disclosures will be required for some beginning with their Form 10-Qs for the quarter ended June 30, 2023.

Effective Dates for Insider Trading Disclosures

SEC Staff Guidance

Exchange Act Rule Compliance and Disclosures Interpretations Nos. 120.26 through .28

The effective dates of the quarterly and annual insider trading disclosures required by Regulation S-K in Forms 10-K, 10-Q and 20-F are as follows:

• Entities other than smaller reporting companies (SRCs) are required to comply in the first filing that covers the first full fiscal period that begins on or after April 1, 2023. 
• SRCs are required to comply in the first filing that covers the first full fiscal period that begins on or after October 1, 2023.

The following table illustrates the effective dates in Forms 10-K, 10-Q and 20-F for registrants with December 31 or June 30 fiscal year ends:

The effectives dates of the new disclosures required in proxy and information statements are as follows:

• Entities other than SRCs are required to comply after completion of the first full fiscal year beginning on or after April 1, 2023.
• SRCs are required to comply after completion of the first full fiscal year beginning on or after October 1, 2023.

In addition to the implementation guidance about the disclosure effective date, C&DI 120.28 clarifies when the affirmative defense from insider trading liability is and is not available if a person is subject to multiple 10b5-1 plans.

Required Annual and Quarterly Disclosures

SEC Reference

Regulation S-K Items 408(a), 408(b) and 402(x), and Item 16J of Form 20-F

Registrants should refer to Regulation S-K Items 408(a), 408(b) and 402(x), or Item 16J of Form 20-F for the disclosure requirements applicable to insider trading policies and transactions. The summary below outlines certain key quarterly disclosure requirements (S-K Item 408(a)) and annual disclosure requirements (S-K Items 408(b) and 402(x), and Item 16J of Form 20-F). 

Regulation S-K Item 408(a)

• Disclose information about any adopted or terminated contract, instruction or written plan for the purchase or sale of securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c), as well as any “non-rule 10b5-1 trading arrangement” as defined by S-K Item 408(c)
• Provide a description of the material terms, such as the following if the contract is intended to satisfy the affirmative defense of Rule 10b5-1(c):
  • Name and title of director or officer
  • Date the director or officer adopted or terminated the trading arrangement
  • Duration of the trading arrangement
  • Aggregate number of securities purchased or sold pursuant to the trading arrangement

Regulation S-K Item 408(b) and Item 16J of Form 20-F

• Disclose whether the registrant has adopted insider trading policies and procedures governing the purchase, sale or other dispositions of the registrant’s securities by directors, officers and employees. If the registrant has no such policies, explain why.
• File the adopted insider trading policies and procedures, if applicable, as an exhibit. 

Regulation S-K Item 402(x)

• Disclose information about the timing of awards of options in relation to the disclosure of material non-public information
• Provide tabular and narrative disclosure of options (or other option-like instruments) awarded in the last completed fiscal year near the release of material non-public information, including:
  • Name of the officer
  • Grant date of the award
  • Number of securities underlying the award
  • Exercise price per share
  • Grant date fair value of the award
• Percentage change in the market price of the securities underlying the award between the closing market price one trading day before and after the disclosure of material non-public information

Such disclosures are subject to XBRL tagging requirements.

¹ Quarterly disclosures are required in the December 31, 2023, Form 10-K; annual disclosures are not.

² Quarterly disclosures are required in the June 30, 2023, Form 10-K; annual disclosures are not.

³  Item 16J of Form 20-F outlines the analogous disclosure requirements for foreign private issuers.