United States: U.S. SEC Adopts Amendments To Rule 10b5-1 And Requires Related Disclosures

On December 14, 2022, the U.S. Securities and Exchange Commission (the SEC) adopted amendments to the affirmative defense in Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended (the Exchange Act), and adopted a number of changes to disclosure requirements applicable to issuers and insiders.¹

The amendments adopted by the SEC:

• Update the requirements for the affirmative defense by:
• • Imposing a cooling-off period before trading can commence under a Rule 10b5-1 plan as follows:
  • • For directors or officers, the later of (1) 90 days after the adoption of the Rule 10b5-1 plan or (2) two business days following the disclosure of the issuer's financial results in a Form 10-Q or Form 10-K for the fiscal quarter in which the plan was adopted or, for foreign private issuers, in a Form 20-F or Form 6-K that discloses the issuer's financial results (but in any event, the required cooling-off period is subject to a maximum of 120 days after adoption of the plan); and
    • For persons other than directors, officers or the issuer, 30 days following the adoption or modification of a Rule 10b5-1 plan;

• • Prohibiting overlapping Rule 10b5-1 plans; and
  • Limiting single-trade Rule 10b5-1 plans to one trading plan per 12-month period.
• Require directors and officers to include a representation in their Rule 10b5-1 plan certifying that: (i) they are not aware of any material nonpublic information; and (ii) they are adopting the trading plan in good faith and not as part of a plan or scheme to evade the prohibitions in Rule 10b-5.
• Impose a condition that all persons entering into a Rule 10b5-1 plan must act in good faith with respect to that plan.
• Require issuers to provide:
• • Quarterly disclosure regarding the use of Rule 10b5-1 plans and certain other written trading arrangements by an issuer's directors and officers for the trading of securities;
  • Annual disclosure of an issuer's insider trading policies and procedures.
  • Certain tabular and narrative disclosures regarding awards of options close in time to the release of material nonpublic information and related policies and procedures; and
  • Tagging of the required disclosures using Inline XBRL;

• Require that Form 4 and Form 5 filers indicate by checkbox that a reported transaction was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c); and

• Require that bona fide gifts of securities, which are currently permitted to be reported by insiders on Form 5, be reported more quickly on Form 4.

The final amendments will be effective 60 days following publication of the Adopting Release in the Federal Register. Issuers must comply with the new disclosure requirements in Form 10-Q and Form 10-K filings that cover the first full fiscal period that begins on or after April 1, 2023. Section 16 reporting persons will be required to comply with the amendments to Form 4 and Form 5 for reports filed on or after April 1, 2023. The amendments to Rule 10b5-1(c)(1) will not affect the affirmative defense available under an existing Rule 10b5-1 plan that was entered into prior to the revised rule's effective date, except to the extent that such a plan is modified.

Background

Rule 10b5-1 provides an affirmative defense against allegations of insider trading for engaging in transactions in securities, even while in possession of material nonpublic information at the time of trading, through plans that are set up in advance. In the over two decades since Rule 10b5-1 was adopted, academic studies have suggested that insiders with Rule 10b5-1 plans may achieve better returns than those not trading pursuant to Rule 10b5-1 plans. Those studies, as well as situations where insiders appeared to conduct especially profitable transactions pursuant to Rule 10b5-1 plans, created negative perceptions about the use of Rule 10b5-1 plans by issuers and insiders, which resulted in calls for change to the rule.

On January 13, 2022, the SEC proposed amendments to the affirmative defense in Rule 10b5-1(c), and proposed a number of changes to disclosure requirements applicable to issuers and insiders.² The SEC described the proposed amendments as intended to address "critical gaps in the SEC's insider trading regime and to help shareholders understand when and how insiders are trading in securities for which they may at times have material nonpublic information."

Amendments to Rule 10b5-1

Rule 10b5-1(c)(1) establishes an affirmative defense to Rule 10b-5 liability for a trade if the trade was made pursuant to a binding contract, an instruction to another person to execute the trade for the instructing person's account, or a written plan. Both historically and as amended, a person asserting a Rule 10b5-1(c)(1) defense must satisfy several conditions:

• The person must demonstrate that, before becoming aware of material nonpublic information, they had entered into a binding contract to purchase or sell the security, provided instructions to another person to execute the trade for the instructing person's account, or adopted a written plan for trading the securities;
• The person must demonstrate that the applicable contract, instructions, or plan: (i) specified the amount of securities to be purchased or sold, price, and date; (ii) provided a written formula or algorithm, or computer program, for determining amounts, prices, and dates; or (iii) did not permit the person to exercise any subsequent influence over how, when, or whether to effect purchases or sales; provided, in addition, that any other person who exercised such influence was not aware of the material nonpublic information when doing so; and
• The person must demonstrate that the purchase or sale was pursuant to the prior contract, instruction, or plan.

Rule 10b5-1(c)(1) states that a purchase or sale is not pursuant to a contract, instruction, or plan if, among other things, the person who entered into the arrangement altered or deviated from the contract, instruction, or plan, or entered into or altered a corresponding or hedging transaction or position with respect to the securities.

Cooling-Off Period

Prior to the SEC's amendments, Rule 10b5-1(c)(1) did not impose any cooling-off period between the date on which the trading arrangement is adopted and the date of the first transaction to be executed under the trading arrangement. In practice, many insiders include a cooling-off period in their Rule 10b5-1 plans, although the term of the prescribed cooling-off period varies.

The SEC amended Rule 10b5-1(c)(1) to add, as a condition to the availability of the affirmative defense:

• A director or "officer" (as defined in Exchange Act Rule 16a-1(f)) who adopts (including a modification of) a Rule 10b5-1 plan would not be able to rely on the Rule 10b5-1 affirmative defense unless the plan provides that trading under the plan will not begin until the later of (1) 90 days after the adoption of the Rule 10b5-1 plan or (2) two business days following the disclosure of the issuer's financial results in a Form 10-Q or Form 10-K for the fiscal quarter in which the plan was adopted or, for foreign private issuers, in a Form 20-F or Form 6-K that discloses the issuer's financial results (but in any event, the required cooling-off period is subject to a maximum of 120 days after adoption of the plan); and
• For persons other than directors, officers or the issuer, the cooling off period is 30 days following the adoption or modification of a Rule 10b5-1 plan.

In a change from the proposed amendments, the final amendments do not require a cooling-off period for an issuer when it enters into or modifies a Rule 10b5-1 plan to trade in its own securities. In the Adopting Release, the SEC indicates that it will continue to consider whether a cooling-off period should be required for issuers. Further, the SEC did not adopt a proposed 120-day cooling off period that would have applied to officers and directors.

Rule 10b5-1 was amended to note that any modification or change to the amount, price, or timing of the purchase or sale of the securities underlying a contract, instruction, or written plan is a termination of such contract, instruction, or written plan, and the adoption of a new contract, instruction, or written plan. A plan modification, such as the substitution or removal of a broker that is executing trades pursuant to a Rule 10b5-1 arrangement on behalf of the person, that changes the price or date on which purchases or sales are to be executed, is deemed to be a termination of such plan and the adoption of a new plan.

Director and Officer Certifications

The SEC amended Rule 10b5-1(c) to specify that, if a director or officer of the issuer of the securities adopts a Rule 10b5-1 plan, as a condition to the availability of the affirmative defense, such director or officer is required to include a representation in the plan certifying that, at the time of the adoption of a new or modified Rule 10b5-1 plan: (i) they are not aware of material nonpublic information about the issuer or its securities; and (ii) they are adopting the contract, instruction, or plan in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5.

In the Adopting Release, the SEC notes:

The SEC modified the final amendment to require that the certifications be included in the Rule 10b5-1 plan as representations, rather than prepared as a separate document to be presented to the issuer. In addition, the SEC did not adopt the proposed instruction that a director or officer seeking to rely on the affirmative defense should retain a copy of the certification for a period of ten years.

Restricting Multiple Overlapping Rule 10b5-1 Trading Arrangements and Single-Trade Arrangements

With respect to multiple overlapping Rule 10b5-1 plans, the final amendments add a condition to the Rule 10b5-1(c)(1) affirmative defense that persons, other than issuers, may not have another outstanding (and may not subsequently enter into any additional) contract, instruction or plan that would qualify for the affirmative defense under the amended Rule 10b5-1 for purchases or sales of any class of securities of the issuer on the open market during the same period.

In a change from the proposal, the SEC modified this condition to address an insider's use of multiple brokers to execute trades pursuant to a single Rule 10b5-1 plan that covers securities held in different accounts. Specifically, a series of separate contracts with different broker-dealers or other agents acting on behalf of the person (other than the issuer) to execute trades thereunder may be treated as a single "plan," provided that the contracts with each broker-dealer or other agent, when taken together as a whole, meet all of the applicable conditions of and remain collectively subject to the provisions of Rule 10b5-1(c)(1). A modification of any such contract will be a modification of each other contract or instruction under such single plan.

Further, the final amendment provides that a broker-dealer or other agent executing trades on behalf of the insider pursuant to the Rule 10b5-1 plan may be substituted by a different broker-dealer or other agent as long as the purchase or sales instructions applicable to the substituted broker and the substitute are identical, including with respect to the prices of securities to be purchased or sold, dates of the purchases or sales to be executed, and amount of securities to be purchased or sold. However, a plan modification, such as the substitution or removal of a broker that is executing trades pursuant to a Rule 10b5-1 arrangement on behalf of the insider that changes the purchase or sale amount, price or date on which purchases or sales are to be executed is a termination of such plan and the adoption of a new plan.

The SEC also adopted a provision that permits persons to maintain two separate Rule 10b5-1 plans at the same time, so long as trading under the later-commencing plan is not authorized to begin until after all trades under the earlier-commencing plan are completed or expire without execution. This provision is not available for the later-commencing plan, however, if the first trade under the later-commencing plan is scheduled to begin during the "effective cooling-off period" if the date of adoption of the later-commencing plan were deemed to be the date of termination of the earlier-commencing plan.

The SEC also adopted a modification in the final rules for plans authorizing certain "sell-to-cover" transactions, in which an insider instructs their agent to sell securities in order to satisfy tax withholding obligations at the time an award vests. Under this provision, an insider will not lose the benefit of the affirmative defense with respect to an otherwise eligible Rule 10b5-1 plan if the insider has in place another plan that would qualify for the affirmative defense, so long as the additional plan or plans only authorize qualified sell-to-cover transactions. A plan authorizing sell-to-cover transactions is qualified for this provision where the plan authorizes an agent to sell only such securities as are necessary to satisfy tax withholding obligations incident to the vesting of a compensatory award, such as restricted stock or stock appreciation rights, and the insider does not otherwise exercise control over the timing of such sales. This provision does not include sales incident to the exercise of option awards.

The SEC also adopted amendments limiting the use of single-trade Rule 10b5-1 plans. As amended, Rule 10b5-1 specifies that if the plan is designed to effect the open-market purchase or sale of the total amount of securities as a single transaction, the plan may not qualify for the affirmative defense unless:

• The person who entered into the plan has not, during the prior 12-month period, adopted another plan that was designed to effect the open-market purchase or sale of the total amount of securities subject to that plan in a single transaction; and
• Such other plan in fact was eligible for the affirmative defense under Rule 10b5-1.

A person (other than the issuer) will be able to rely on the Rule 10b5-1(c)(1)(ii) affirmative defense for only one single-trade plan during any 12-month period. The defense will only be available for a single-trade plan if the person had not, during the preceding 12-month period, adopted another single-trade plan, where the other plan qualified for the affirmative defense under Rule 10b5-1.

For this purpose, a plan is "designed to effect" the purchase or sale of securities as a single transaction when the contract, instruction, or plan has the practical effect of requiring such a result. In contrast, a plan is not designed to effect a single transaction where the plan leaves the person's agent discretion over whether to execute the contract, instruction, or plan as a single transaction. Similarly, a plan is also not designed to effect the purchase or sale of securities as a single transaction when:

• The contract, instruction, or plan does not leave discretion to the agent, but instead provides that the agent's future acts will depend on events or data not known at the time the plan is entered into, such as a plan providing for the agent to conduct a certain volume of sales or purchases at each of several given future stock prices; and
• It is reasonably foreseeable at the time the plan is entered into that the contract, plan, or instruction might result in multiple transactions.

For reasons that are similar to those with respect to multiple overlapping trades, the SEC modified the single-trade limitation as it was proposed with respect to qualified sell-to-cover transactions. This modification applies to the same plans eligible for the sell-to-cover provision of the overlapping trade limitation.

Good Faith Condition

The SEC amended Rule 10b5-1 to add the condition that the person who entered into the Rule 10b5-1 contract, instruction, or plan "has acted in good faith with respect to" the contract, instruction, or plan. This amendment was adopted based on a concern that corporate insiders "may take actions after adopting a Rule 10b5-1 plan to benefit from material nonpublic information the insider acquires after establishment of the plan."

Additional Disclosures Regarding Rule 10b5-1 Trading Arrangements

The SEC adopted new Item 408 under Regulation S-K and corresponding amendments to Forms 10-Q and 10-K to require:

• Quarterly disclosure of the use of Rule 10b5-1 and other trading arrangements by an issuer, and its directors and officers for the trading of the issuer's securities; and
• Annual disclosure of an issuer's insider trading policies and procedures.

The SEC also adopted Item 16J to Form 20-F to require annual disclosure of a foreign private issuer's insider trading policies and procedures.

As adopted, Item 408(a) of Regulation S-K will require issuers to:

• Disclose whether, during the issuer's last fiscal quarter (the issuer's fourth fiscal quarter in the case of an annual report), any director or officer has adopted or terminated:
• • any contract, instruction or written plan for the purchase or sale of securities of the registrant that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c), referred to as a "Rule 10b5-1(c) trading arrangement," and/or
  • any written trading arrangement for the purchase or sale of securities of the registrant that meets the requirements of a non-Rule 10b5-1 trading arrangement as defined in Item 408(c), referred to as a "non-Rule 10b5-1 trading arrangement," as discussed below; and
• Provide a description of the material terms of the Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement other than terms with respect to the price at which the individual executing the respective trading arrangement is authorized to trade, such as:
• • The name and title of the director or officer;
  • The date of adoption or termination of the trading arrangement;
  • The duration of the trading arrangement; and
  • The aggregate number of securities to be sold or purchased under the trading arrangement.

With respect to any given trading arrangement subject to disclosure under Item 408(a), the issuer must indicate whether such trading arrangement is a Rule 10b5-1 trading arrangement or is a non-Rule 10b5-1 trading arrangement. In addition, any modification or change to a Rule 10b5-1 plan by a director or officer that falls within the meaning of new Rule 10b5-1(c)(1)(iv) would also be required to be disclosed under Item 408(a), as it constitutes the termination of an existing plan and the adoption of a new contract, instruction, or written plan. In a change from the proposal, Item 408(a) as adopted does not require disclosure of the price at which the individual executing the trading arrangement is authorized to trade. Further, the SEC decided to not require corresponding disclosure regarding the use of trading arrangements by the issuer.

Under the final rule, a trading arrangement with respect to a director or officer would be a "non-Rule 10b5-1 trading arrangement" where the director or officer asserts that, at a time when they were not aware of material nonpublic information about the security or the issuer of the security, they:

• Adopted a written arrangement for trading the securities; and
• The trading arrangement:
• • Specified the amount of securities to be purchased or sold and the price at which and the date on which the securities were to be subsequently purchased or sold;
  • Included a written formula or algorithm, or computer program, for determining the amount of securities to be purchased or sold and the price at which the securities were to be purchased or sold; or
  • Did not permit the covered person to exercise any subsequent influence over how, when, or whether to effect purchases or sales; provided, in addition, that any other person who, pursuant to the trading arrangement did exercise such influence must not have been aware of material nonpublic information when doing so.

As adopted, Item 408(b) of Regulation S-K will require issuers to disclose whether they have adopted insider trading policies and procedures governing the purchase, sale, and other dispositions of their securities by directors, officers, and employees, or the issuer itself, that are reasonably designed to promote compliance with insider trading laws, rules, and regulations, and any listing standards applicable to the issuer. If an issuer has not adopted such insider trading policies and procedures, it must explain why it has not done so. These disclosures will be required in annual reports on Form 10-K and proxy and information statements on Schedules 14A and 14C. Pursuant to new Item 16J in Form 20-F, foreign private issuers will be required to provide analogous disclosure in their annual reports on Form 20-F. The SEC notes in the Adopting Release that, under General Instruction G to Form 10-K, an issuer can incorporate by reference the information required by Item 408(b) from a definitive proxy or information statement involving the election of directors, if the proxy or information statement is filed within 120 days of the end of the fiscal year.

In a modification from the proposal, the final rules do not require separate disclosure of the issuer's policies and procedures within the body of the annual report, proxy statement or information statement. Instead, the SEC adopted amendments to Item 601 of Regulation S-K and Form 20-F that require issuers to file a copy of their insider trading policies and procedures as an exhibit to Form 10-K and Form 20-F. If all of the issuer's insider trading policies and procedures are included in its code of ethics (as defined in Item 406(b) of Regulation S-K) and the code of ethics is filed as an exhibit pursuant to Item 406(c)(1), a hyperlink to that exhibit accompanying the issuer's disclosure as to whether it has insider trading policies and procedures would satisfy this component of the disclosure requirement.

Identification of Rule 10b5-1(c) Transactions on Forms 4 and 5

The SEC has added a Rule 10b5-1(c) checkbox as a new mandatory disclosure requirement in Forms 4 and 5. This checkbox would require a Form 4 or Form 5 filer to indicate "that a transaction was made pursuant to a contract, instruction or written plan that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c)." Filers are also required to provide the date of adoption of the Rule 10b5-1 trading arrangement in the "Explanation of Responses" section, and filers have the option to provide additional relevant information about the reported transaction in the "Explanation of Responses" section.

The SEC did not adopt a second, optional checkbox that was proposed. This optional checkbox would have allowed a filer to indicate whether a transaction reported on the form was made pursuant to a pre-planned contract, instruction, or written plan that is not intended to satisfy the conditions of Rule 10b5-1(c).

Disclosure Regarding the Timing of Option Grants

Based on a concern that existing disclosure requirements do not provide investors with adequate information regarding an issuer's policies and practices with respect to stock option awards timed to precede or follow the release of material nonpublic information, the SEC adopted a new paragraph (x) to Item 402 of Regulation S-K. Under this new disclosure requirement, issuers must provide narrative disclosure discussing the issuer's policies and practices on the timing of awards of stock options, stock appreciation rights (SARs) and/or similar option-like instructions in relation to the disclosure of material nonpublic information by the issuer, including:

• How the board determines when to grant such awards;
• Whether, and if so, how, the board or compensation committee considers material nonpublic information when determining the timing and terms of an award; and
• Whether the issuer has timed the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation.

If, during the last completed fiscal year, stock options, SARs and/or similar option-like instruments were awarded to a named executive officer (NEO) within a period starting four business days before the filing of a periodic report on Form 10-Q or Form 10-K, or the filing or furnishing of a current report on Form 8-K that discloses material nonpublic information, which includes earnings information, and ending one business day after a triggering event, the issuer must provide the following information concerning each such award for the NEO on an aggregated basis in the tabular format set forth in the rule:

• The name of the NEO;
• The grant date of the award;
• The number of securities underlying the award;
• The per-share exercise price;
• The grant date fair value of each award computed using the same methodology as used for the issuer's financial statements under generally accepted accounting principles; and
• The percentage change in the market price of the underlying securities between the closing market price of the security one trading day prior to and one trading day following the disclosure of material nonpublic information.

The SEC notes in the Adopting Release that "the purpose of the new table is to highlight for investors options award grants that may be more likely than most to have been made at a time that the board of directors was aware of material nonpublic information affecting the value of the award."

In a modification from the proposal, the SEC is requiring that the table include only option awards granted in the period beginning four business days preceding a triggering event and ending one business day after a triggering event, rather than the proposed 14-day disclosure window. In addition, the SEC removed the share repurchase triggering event and provided a limited exception from the tabular disclosure of option awards based on the filing or furnishing of a Form 8-K. In the final rules, the SEC also combined the final two columns of the proposed table into a single column that now requires disclosure of the percentage change in the market value of the securities underlying the award between the closing market price of the securities one trading day prior to the disclosure of material nonpublic information and one trading day following the disclosure of material nonpublic information.

Reporting of Gifts on Form 4

Prior to the SEC's amendments, Section 16 reporting persons were required to report any bona fide gift of equity securities registered under Exchange Act Section 12 on Form 5. Exchange Act Rule 16a-3(f) provides that every person who, at any time during an issuer's fiscal year, was subject to Section 16 of the Exchange Act must file a Form 5 within 45 days after the issuer's fiscal year end to disclose certain beneficial ownership transactions and holdings not reported previously on Forms 3, 4, or 5. The acquisition and disposition of bona fide gifts were eligible for delayed reporting on Form 5 pursuant to Rule 16a-3(f)(1).

The SEC amended Exchange Act Rule 16a-3(f)(1) to now require the reporting of dispositions of bona fide gifts of equity securities on Form 4 before the end of the second business day following the date of execution of the transaction.

Notably, in footnote 55 of the Proposing Release, the SEC had also stated:

A commenter expressed concern that the language in the Proposing Release purporting to illustrate the application of Section 10(b) to gifts of securities appeared to represent an extension or modification of insider trading law. In the Adopting Release, the SEC did not revisit this guidance, but clarified that the affirmative defense of Rule 10b5-1(c)(1) is available for any bona fide gift of securities, including a gift that might otherwise cause the donor to be subject to liability under Section 10(b), because, when making the gift, the donor was aware of material nonpublic information about the security or issuer and knew or was reckless in not knowing that the donee would sell the securities prior to the disclosure of such information. The SEC expressed its view that the terms "trade" and "sale" in Rule 10b5-1(c)(1) include bona fide gifts of securities. The SEC noted in the Adopting Release: "For example, a covered individual may enter into a binding arrangement instructing their attorney or tax advisor to gift shares to a charitable organization, with the amount of shares gifted determined according to a traditional algorithm or formula, or instead according to some tax objective, such as the amount of shares that would maximize the individual's annual charitable contribution deduction."

Structured Data Requirements

The SEC requires that issuers tag the disclosure provided in response to Item 408, Item 402(x) and Item 16J(a) of Form 20-F using Inline XBRL in accordance with Rule 405 of Regulation S-T and the EDGAR Filer Manual. The requirements include block text tagging of narrative disclosures, as well as detail tagging of quantitative amounts disclosed within the narrative disclosures. Issuers must comply with the Inline XBRL tagging requirements in Forms 10-Q, 10-K and 20-F, and any proxy or information statements that are required to include the Item 408 and/or Item 402(x) disclosures, beginning with the first such filing that covers the first full fiscal period beginning on or after April 1, 2023, for companies other than smaller reporting companies. Smaller reporting companies will be required to provide and tag the disclosures after an additional six-month transition period.

Compliance Dates

The final amendments will be effective 60 days following publication of the Adopting Release in the Federal Register. The SEC provided the following compliance schedule for the final rules:

• Section 16 reporting persons will be required to comply with the amendments to Forms 4 and 5 for beneficial ownership reports filed on or after April 1, 2023;
• Issuers that are smaller reporting companies will be required to comply with the new disclosure and tagging requirements in Exchange Act periodic reports on Forms 10-Q, 10-K and 20-F and in any proxy or information statements that are required to include the Item 408, Item 402(x), and/or Item 16J disclosures in the first filing that covers the first full fiscal period that begins on or after October 1, 2023; and
• All other issuers will be required to comply with the new disclosure and tagging requirements in Exchange Act periodic reports on Forms 10-Q, 10-K and 20-F and in any proxy or information statements that are required to include the Item 408, Item 402(x), and/or Item 16J disclosures in the first filing that covers the first full fiscal period that begins on or after April 1, 2023.

The SEC notes in the Adopting Release:

With the adoption of the final rules, issuers should begin examining their insider trading policies and procedures and Rule 10b5-1 plan guidelines to reflect the changes to the affirmative defense contemplated by the amendments. Issuers should also carefully consider their approach to bona fide gifts under their insider trading policies and procedures, given the SEC's interpretive positions articulated in the Proposing Release and the Adopting Release. Issuers should also revise their disclosure controls and procedures to address the new disclosure requirements in Item 408 and Item 402(x) of Regulation S-K, as well as Item 16J of Form 20-F.

Footnotes

1. Release No. 33-11138, Insider Trading Arrangements and Related Disclosures (Dec. 14, 2022), available at https://www.sec.gov/rules/final/2022/33-11138.pdf (the "Adopting Release").

2. Release No. 33-11013, Rule 10b5-1 and Insider Trading (Jan. 13, 2022), available at https://www.sec.gov/rules/proposed/2022/33-11013.pdf (the "Proposing Release").

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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