Rule 10b5-1 Plan Requirements 2026: What Changed and What to Do Now

If your insider trading compliance program was built before February 27, 2023, it needs a fresh audit. The SEC's December 2022 amendments to Rule 10b5-1 are now more than three years into force, and enforcement attention, SEC comment letter practice, and public Form 4 disclosures have all shifted in ways that expose programs still running on pre-amendment templates.

This article focuses on what changed, the exact current requirements, and the operational gaps that compliance teams and equity plan administrators are still getting wrong in 2026. For a foundational explanation of what a 10b5-1 plan is and who needs one, see Rule 10b5-1 Trading Plan Requirements: 2026 Compliance Guide.

Key takeaway: The SEC adopted Release No. 33-11138 on December 14, 2022. It became effective February 27, 2023 and represents the first major overhaul of Rule 10b5-1 since its original adoption in August 2000. The amendments are fully operative. No further amendments have been proposed or adopted as of September 2026.

What the 2022 Amendments Actually Changed

The pre-amendment framework had one core problem: academic research cited in the SEC's adopting release, including work by Alan Jagolinzer and by Cohen, Malloy, and Pomorski (Journal of Finance, 2012), documented that pre-amendment plan trades generated statistically significant abnormal returns compared to non-plan trades. Insiders were timing plan adoptions immediately before favorable disclosures and using the affirmative defense as cover.

The 2022 amendments added five new substantive conditions on top of the foundational requirements that already existed:

1. Mandatory cooling-off periods (different rules for officers/directors versus other insiders)
2. Single-plan rule prohibiting overlapping qualifying plans
3. Single-trade plan cap of one per rolling 12-month period
4. Written good-faith certification at adoption for Section 16 officers and directors
5. Ongoing good-faith condition applicable to all persons throughout the plan's life

The foundational requirements, unchanged by the amendments, still require that the plan: (a) specify the amount, price, and date of trades; (b) include a written formula or algorithm for determining those parameters; or (c) not permit the insider to exercise any subsequent influence over how, when, or whether trades occur.

The Cooling-Off Period Formula for Officers and Directors

For Section 16 officers and directors, the cooling-off period is the later of two legs, capped at a ceiling:

• Leg 1: 90 days after plan adoption or modification
• Leg 2: Two business days after the company files the Form 10-Q or Form 10-K for the fiscal quarter in which the plan was adopted or modified
• Cap: 120 days after adoption, regardless of when the next quarterly filing occurs

The arithmetic is deceptively simple but easy to miscalculate in practice. As KPMG's Financial Reporting View guidance emphasizes, the two-business-day trigger runs from the SEC filing date, not the earnings release date. A company that releases earnings on a Tuesday and files its 10-Q the following Friday gives insiders until the Monday after that Friday, not the Thursday after the earnings call.

Worked example: A CFO adopts a plan on October 15 (late in Q3 for a calendar-year company). The company files its Q3 10-Q on November 12.

• Leg 1: 90 days from October 15 = January 13
• Leg 2: Two business days after November 12 = November 14
• Later of the two: January 13
• Is January 13 within the 120-day cap? Yes (120 days from October 15 = February 12)
• First permitted trade: January 13

Now shift the adoption date to September 1 (early in Q3). The company files its Q3 10-Q on November 12.

• Leg 1: 90 days from September 1 = November 30
• Leg 2: Two business days after November 12 = November 14
• Later of the two: November 30
• First permitted trade: November 30

As Wilson Sonsini's analysis notes, for most calendar-year companies adopting plans shortly after earnings, the 90-day leg controls. Adopt late in a quarter, and the filing-date leg can push the start date further out, up to the 120-day ceiling.

Harvard Law School Forum analysis found that the new rules have lengthened the average time between plan adoption and first trade for S&P 500 executives from approximately 30 to 45 days (pre-amendment practice) to 90 to 120 days, materially changing how equity compensation monetization is planned.

For non-officer, non-director insiders (such as 10%-plus shareholders), the rule is simpler: a flat 30-day cooling-off period after plan adoption or modification. No quarterly filing calculation required.

What Counts as a Modification? The Unresolved Definition Problem

This is the most significant unresolved legal ambiguity in the current framework, and it matters because any modification is treated as a cancellation of the existing plan and adoption of a new one, triggering a full new cooling-off period.

The adopting release states that any change to the amount, price, timing, or other material terms constitutes a modification. As Bass Berry's FAQ summarizes: "The new rules treat any modification of the price, amount or timing of a transaction according to a 10b5-1 plan (including changes to a related trading formula or algorithm) as a cancellation of the existing plan and adoption of a new plan, which will trigger a new cooling-off period."

What the SEC has not done, as of September 2026, is publish a bright-line definition of modification, issue no-action letters on the question, or provide interpretive guidance on borderline cases. Practitioners are left to reason from the adopting release and emerging firm consensus.

Changes that are clearly modifications (restart the clock):

• Changing the number of shares to be sold
• Changing the price limit or formula
• Changing the trading schedule or date parameters
• Changing the algorithm or formula used to determine trades

Changes that leading firms generally treat as not triggering a new plan:

• Substituting one broker for another where the plan terms are otherwise unchanged
• Correcting a clerical or administrative error that does not alter trading parameters
• Updating account numbers or contact information

The safest posture, absent formal SEC guidance, is to treat any substantive change as a modification and restart the full cooling-off period. Document the reasoning in writing whenever a borderline call is made.

Warning: An insider who adopted a plan before February 27, 2023 retains the pre-amendment affirmative defense for that plan, but any post-effective-date modification to amount, price, or timing triggers full compliance with the 2022 amendment requirements, including a new cooling-off period under the new rules.

The Single-Plan Rule and Its Exceptions

The general rule: insiders (other than the issuer) may not maintain more than one qualifying Rule 10b5-1(c)(1) plan for the same class of securities at the same time.

Three narrow exceptions exist under the 2022 amendments:

EY's technical commentary flags the sell-to-cover exception as narrow: a plan that also authorizes discretionary sales beyond the withholding amount does not qualify. Equity plan administrators who have combined sell-to-cover and discretionary sale instructions in a single plan document need to review whether that structure still works.

The single-trade plan cap is separate: insiders are limited to one single-trade plan (a plan contemplating only a single purchase or sale) per rolling 12-month period for purposes of the affirmative defense. Sell-to-cover plans are exempt from this cap as well.

The Good-Faith Certification: Who Signs, What It Says, and the Ongoing Obligation

At adoption, Section 16 officers and directors must include a written certification stating:

1. They are not aware of any MNPI about the issuer or its securities
2. They are adopting the plan in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5

This certification must be included in the plan document itself or in a separate written representation. Skadden's guidance recommends that companies develop a standardized certification template and retain it as part of the plan documentation to support an audit trail and potential enforcement defense.

The ongoing obligation is what most programs underestimate. The good-faith condition applies to all persons, not just officers and directors, and it extends throughout the life of the plan. The SEC's adopting release is explicit: "The good-faith condition is not satisfied if the person who entered into the plan later cancels or modifies the plan in response to information that was not available at the time of adoption, even if the original adoption was in good faith."

PwC's Viewpoint guidance reinforces this: an insider who learns of MNPI and cancels a plan may face scrutiny as to whether the cancellation itself was an evasion of the rule's purpose. Plan termination procedures need to be documented as carefully as plan adoption.

Practical steps for plan termination documentation:

• Record the date and reason for termination in writing
• Confirm in writing that the termination decision was not made in response to MNPI
• Retain the documentation alongside the original plan and certification

New Disclosure Requirements: Form 4, Item 408, and Inline XBRL

The 2022 amendments created a new public audit trail that compliance teams must operationalize.

Form 4 Checkbox (Mandatory Since April 1, 2023)

Section 16 reporting persons must now check a box on Form 4 indicating whether a reported transaction was made pursuant to a Rule 10b5-1 plan adopted on a specified date, or pursuant to a "non-Rule 10b5-1 trading arrangement." As Latham and Watkins noted, checking the "non-Rule 10b5-1 trading arrangement" box signals to the market that the trade was not pre-planned and may invite scrutiny, even if the trade was entirely lawful (for example, a trade executed during an open window without a plan).

The Form 4 checkbox has created a searchable public database on EDGAR of plan adoption dates, which journalists, academics, and SEC enforcement staff can use to identify suspicious patterns between adoption dates and subsequent corporate disclosures.

Item 408 of Regulation S-K

Item 408 requires issuers to disclose in annual reports and proxy statements:

• Whether the issuer has adopted insider trading policies and procedures, and if not, why not
• Information about the adoption, modification, or termination of Rule 10b5-1 and non-Rule 10b5-1 trading arrangements by directors and officers during the most recent fiscal quarter

As Deloitte's Heads Up analysis highlights, the quarterly disclosure requirement applies even if no trades have yet occurred under the plan. Adoption alone triggers the disclosure obligation.

Cooley's guidance clarifies that the material terms of the arrangement must be disclosed, other than pricing terms.

SEC comment letter practice: The Division of Corporation Finance has issued comment letters to issuers questioning the adequacy of Item 408 disclosures, particularly where issuers state they have insider trading policies without providing sufficient detail about what those policies require. This has been a recurring theme in the 2024 to 2025 comment letter cycle. If your Item 408 disclosure is a single boilerplate sentence, expect a comment.

Inline XBRL Tagging

Item 408 and Item 402(x) disclosures must be tagged in Inline XBRL. This is a compliance obligation for all issuers and is not addressed in most practitioner guidance on the 10b5-1 amendments. Confirm with your XBRL preparer that the tagging taxonomy covers these elements.

Item 402(x): Option Grant Timing

Item 402(x) requires a tabular disclosure of option grants made within 14 days before or after the release of MNPI, covering grants made four business days before the filing of a periodic report or current report on Form 8-K disclosing MNPI through one business day after the triggering event.

Issuer Stock Repurchase Plans: Different Rules Apply

Issuers defending their own stock repurchase programs under Rule 10b5-1 are not subject to the cooling-off period or single-plan conditions. The SEC explicitly declined to impose those requirements on issuer repurchase plans in the 2022 amendments, noting in the adopting release that further consideration is warranted.

What issuers must satisfy for repurchase plans:

• The good-faith condition (the plan must be adopted and maintained in good faith)
• The anti-evasion condition under new Rule 10b5-1(c)(1)(ii): the plan must not have been entered into as part of a plan or scheme to evade Rule 10b-5

This is a meaningful distinction for treasury and finance teams managing buyback programs. The good-faith and non-evasion conditions still require documentation and process discipline, even without a cooling-off period. The SEC's 2023 and 2024 regulatory agendas referenced continued monitoring of issuer repurchase plan practices, suggesting potential future rulemaking in this area.

Rule 10b5-1 Plans and Rule 144: The Interaction Most Guidance Misses

A valid 10b5-1 plan provides an affirmative defense against insider trading liability under Rule 10b-5. It does not exempt the insider from Rule 144.

For affiliates selling restricted or control securities, Rule 144's requirements still apply in full:

• Volume limitations: affiliate sales in any three-month period cannot exceed the greater of 1% of outstanding shares or the average weekly reported trading volume during the four calendar weeks preceding the sale
• Current public information: the issuer must be current in its Exchange Act reporting
• Manner of sale: sales must be in brokers' transactions or directly with market makers
• Form 144 filing: required when the amount sold exceeds 5,000 shares or $50,000 in any three-month period

A 10b5-1 plan that schedules sales exceeding Rule 144 volume limits does not override those limits. The plan will execute the trades, but the affiliate will be in violation of Rule 144. Equity plan administrators should build a Rule 144 volume check into the plan setup process for any insider who qualifies as an affiliate. For Form 144 mechanics, see Form 144 SEC Reporting Requirements: 2026 Compliance Guide.

Adopting a Plan During a Blackout Period: What the Rule Actually Requires

This is a question compliance teams frequently get wrong. The 2022 amendments require that the insider not be aware of MNPI at the time of plan adoption. They do not require that the company's trading window be open.

In practice, most company insider trading policies layer on a requirement that plans be adopted only during open trading windows, which is more restrictive than the rule itself. Before advising an insider that they cannot adopt a plan because a blackout is in effect, check whether that restriction comes from the SEC rule or from the company's own policy. For the policy framework, see Insider Trading Blackout Period Policy: 2026 Compliance Guide.

If the company policy permits adoption during a blackout (provided the insider has no MNPI), the good-faith certification and documentation become especially important, since the timing will attract scrutiny.

2026 Compliance Audit Checklist

Use this checklist to audit your existing program against the current requirements:

• All active plan templates include the written good-faith certification language for Section 16 officers and directors
• Cooling-off period calculations use the SEC filing date (not the earnings release date) as the trigger for the two-business-day leg
• No insider maintains overlapping qualifying plans for the same class of securities, except under a documented exception
• Sell-to-cover plans are reviewed to confirm they authorize only withholding-related sales, not discretionary sales
• Sequential plan arrangements include documentation confirming the second plan will not trade until the first is complete or expired
• Plan termination decisions are documented in writing, including a statement that the termination was not made in response to MNPI
• Form 4 filings since April 1, 2023 correctly check the Rule 10b5-1 plan box (or the non-Rule 10b5-1 arrangement box) with the correct plan adoption date
• Item 408 disclosures in the most recent 10-K and proxy provide sufficient detail about insider trading policies and plan activity, not just a boilerplate sentence
• Item 408 quarterly disclosures in 10-Q filings cover any plan adoptions, modifications, or terminations during the quarter, even where no trades have occurred
• Item 408 and Item 402(x) disclosures are tagged in Inline XBRL
• Affiliate insiders' plans have been reviewed for compliance with Rule 144 volume limitations
• Any plan adopted before February 27, 2023 that has been modified since that date has been treated as a new plan subject to the full 2022 amendment requirements

SEC Chair Gary Gensler stated when the amendments were adopted: "I believe today's amendments will help fill those potential gaps. These issues speak to the confidence that investors have in the markets." Three years in, the infrastructure for enforcement is in place. The Form 4 checkbox database is searchable. Comment letters on Item 408 are running. Programs that have not fully operationalized the 2022 requirements are carrying real exposure.

FAQ

What is the cooling-off period for a Rule 10b5-1 plan in 2026? For Section 16 officers and directors, the cooling-off period is the later of 90 days after plan adoption or modification, or two business days after the company files its Form 10-Q or Form 10-K for the fiscal quarter in which the plan was adopted or modified, capped at 120 days. For other insiders (such as 10%-plus shareholders), the period is a flat 30 days.

Can an insider have more than one active 10b5-1 plan at the same time? Generally no. The single-plan rule prohibits overlapping qualifying plans for the same class of securities. Three narrow exceptions apply: multi-broker arrangements treated as one plan, sequential plans where the second does not begin until the first is complete, and sell-to-cover tax withholding plans that authorize only withholding-related sales.

Does modifying a 10b5-1 plan reset the cooling-off period? Yes. Any modification to the amount, price, timing, or other material terms is treated as a cancellation of the existing plan and adoption of a new one, triggering a full new cooling-off period. The SEC has not issued a bright-line definition of modification, so borderline changes should be treated conservatively.

Are issuer stock repurchase plans subject to the same cooling-off rules? No. Issuers are exempt from the cooling-off and single-plan conditions for their own repurchase programs. They must still satisfy the good-faith and anti-evasion conditions under the 2022 amendments.

What does the Form 4 Rule 10b5-1 checkbox require? Since April 1, 2023, Section 16 reporting persons must check a box on Form 4 indicating whether a transaction was made pursuant to a Rule 10b5-1 plan (with the adoption date) or pursuant to a non-Rule 10b5-1 trading arrangement. Checking the non-plan box for an open-window trade is lawful but signals to the market and to enforcement staff that the trade was not pre-planned.

Does a 10b5-1 plan exempt an affiliate from Rule 144 volume limits? No. A valid 10b5-1 plan provides an affirmative defense under Rule 10b-5 only. Rule 144 volume caps, current public information requirements, and Form 144 filing obligations continue to apply to affiliates selling restricted or control securities.