Rule 10b5-1 Trading Plan Requirements: 2026 Compliance Guide

If you are a CFO, general counsel, or equity plan administrator responsible for insider trading compliance, this guide covers every requirement your 10b5-1 trading plans must meet under the SEC's December 2022 amendments, now fully in force. You will find the exact cooling-off period formula, the single-plan and single-trade rules, what "good faith" means in practice, how to document it, and what the new Form 4, Form 10-Q, and Form 10-K disclosures require operationally.

Key takeaway: The SEC's 2022 amendments (effective February 27, 2023) added mandatory cooling-off periods, a single-plan limitation, a one-single-trade-plan-per-12-months cap, and explicit good-faith certification requirements. Any plan template drafted before that date needs a compliance audit before it is used again.

What Is a Rule 10b5-1 Trading Plan?

A Rule 10b5-1 trading plan is a written, pre-established trading program that gives corporate insiders an affirmative defense against insider trading liability under SEC Rule 10b-5. The plan must be adopted before the insider becomes aware of material nonpublic information (MNPI), and it must specify the key trading parameters in advance so the insider cannot exercise discretion after adoption.

The original rule was adopted in August 2000 (Release No. 33-7881). The December 2022 amendments (Release No. 33-11138) represent the first major overhaul in over 22 years, driven in part by academic research cited in the SEC's adopting release showing that pre-amendment plan trades generated abnormal returns significantly above those of non-plan trades.

The affirmative defense under Rule 10b5-1(c)(1) requires the plan to either: (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.

Who Needs a 10b5-1 Plan?

Any corporate insider who wants a structured affirmative defense when selling or buying company stock should consider a 10b5-1 plan. The rule applies to officers and directors (as defined in Rule 16a-1) and to any other person, including 10%-plus shareholders, who may possess MNPI.

Companies are not subject to the cooling-off or single-plan conditions when defending their own stock repurchase programs under Rule 10b5-1, but the 2022 amendments do require issuers to satisfy the good-faith and non-evasion conditions. For individual insiders, the rule is the primary tool for trading outside closed windows without triggering enforcement risk.

The Core Requirements: What Every Plan Must Include

Before the 2022 amendments layered on additional conditions, the foundational requirements already demanded that:

• The plan be adopted in writing before the insider is aware of MNPI.
• The plan specify or algorithmically determine the amount, price, and timing of trades.
• The insider not exercise subsequent influence over trading decisions after adoption.

The 2022 amendments added four new substantive conditions on top of this foundation:

1. Mandatory cooling-off period (varies by insider type, see below).
2. Single-plan rule: generally only one active Rule 10b5-1(c)(1) plan at a time.
3. Single-trade plan cap: one single-trade plan per rolling 12-month period.
4. Good-faith certification: a written representation at adoption.

Rule 10b5-1 Cooling-Off Period Requirements in 2026

The cooling-off period is the most operationally complex requirement and the one most likely to catch compliance teams off guard. The formula differs by insider category.

Officers and Directors

For Section 16 officers and directors, the first trade under a new or modified plan may not occur until the later of:

1. 90 days after plan adoption or modification, or
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.

This waiting period is capped at 120 days regardless of when the next quarterly filing occurs.

Here is how that plays out in practice:

The practical implication: adopt during an open window shortly after earnings, and the 90-day leg will almost always control. Adopt late in a quarter, and the next filing date may push the start date well past 90 days, up to the 120-day ceiling.

Other Insiders (Non-Officer, Non-Director)

For 10%-plus shareholders and other persons who are not Section 16 officers or directors, the cooling-off period is a flat 30 days after plan adoption or modification. Source: SEC Release No. 33-11138.

Plan Modifications Reset the Clock

A modification is treated as the adoption of a new plan for cooling-off purposes. The 2022 adopting release indicates that any change to the amount, price, timing, or other material terms constitutes a modification. The SEC has not published a bright-line definition, which is a live practitioner pain point. Until formal guidance arrives, the safest posture is to treat any substantive change as a modification and restart the full cooling-off period.

Warning: The SEC has not issued no-action letters or interpretive releases specifically addressing what counts as a "modification" under the 2022 amendments. Practitioners are relying on the adopting release and firm consensus. When in doubt, treat the change as a new plan adoption.

The Single-Plan Rule: Can an Insider Have More Than One Active Plan?

Generally, no. The 2022 amendments prohibit insiders from maintaining multiple overlapping Rule 10b5-1(c)(1) plans for the same class of securities at the same time.

There are two narrow exceptions:

1. Tax withholding sell-to-cover plans: a plan that solely authorizes an agent to sell shares to satisfy tax withholding obligations arising from equity awards is excluded from the single-plan count.
2. Sequential plans: an insider may maintain a second plan if trading under that plan is not authorized to begin until all trades under the first plan are completed or expire, and the second plan otherwise satisfies all Rule 10b5-1(c)(1) conditions including its own cooling-off period.

Plans held with multiple brokers that collectively cover the same class of securities are treated as a single plan. A modification or termination of any one of them constitutes a modification or termination of all. Source: SEC Release No. 33-11138.

The Single-Trade Plan Limit

Insiders are limited to one single-trade plan per rolling 12-month period. A single-trade plan is a plan designed to effect the purchase or sale of securities as a single transaction. The 12-month period is rolling, not calendar-year based.

The practical traps here:

• A plan that executes in a single transaction but was drafted as a multi-trade plan does not automatically count as a single-trade plan. The characterization depends on how the plan was designed, not how it happened to execute.
• The tax withholding sell-to-cover exception applies here too: plans used solely to cover tax withholding are not counted against the 12-month limit.
• The 12-month clock runs from the date the single-trade plan was adopted, not from when the trade executed.

Good Faith: What It Means and How to Document It

The good-faith condition is the most legally uncertain element of the 2022 amendments, and the hardest to defend after the fact if the SEC comes asking. The rule requires two things:

1. The plan must be entered into in good faith and not as part of a scheme to evade Rule 10b-5.
2. The insider must continue to act in good faith throughout the life of the plan.

For officers and directors specifically, the plan must include a written representation at adoption certifying that: (a) the insider is not aware of MNPI about the company or its securities; and (b) the plan is being adopted in good faith and not as part of a scheme to evade Rule 10b-5. Source: SEC Release No. 33-11138.

Documentation Best Practices at Adoption

The Harvard Law School Forum on Corporate Governance has noted that the good-faith condition is the most legally uncertain element of the new framework and recommends that companies require insiders to certify good faith in a separate written document at adoption, distinct from the plan itself. Mayer Brown's January 2025 client alert confirms that leading firms now recommend longer plan durations, avoiding modifications, and building explicit good-faith documentation at adoption.

A defensible adoption package should include:

• A written certification signed by the insider at adoption confirming no MNPI awareness and good faith.
• A compliance committee or board pre-approval record showing the plan was reviewed during an open trading window.
• A contemporaneous legal opinion or compliance memo confirming the plan meets all Rule 10b5-1(c)(1) conditions as of the adoption date.
• Documentation of the open window status at adoption (e.g., a screenshot of the company's trading window calendar or a written confirmation from the compliance officer).
• A record that the insider was not in possession of any specific MNPI at the time, supported by a representation from the insider and a review by the GC or outside counsel.

The SEC can challenge a plan even if it technically meets the formal requirements if surrounding circumstances suggest bad faith. Early terminations, plan modifications shortly before adverse news, and clustered adoptions near earnings windows are all patterns the agency has flagged in enforcement actions. Source: SEC Litigation Releases.

What Changed in 2022: Pre- vs. Post-Amendment Comparison

If your compliance team is auditing legacy plan templates, this table shows exactly what the 2022 amendments added.

New Disclosure Requirements: Form 4, Form 10-Q, Form 10-K, and Form 144

Form 4 Checkbox and Footnote

Since April 1, 2023, any transaction executed under a Rule 10b5-1 plan must be identified on Form 4 by checking the new checkbox in Column 10 of Table I or Table II. The form also requires disclosure of the plan adoption date.

Beyond the checkbox, best practice is to include a footnote identifying the plan adoption date, confirming the plan was adopted in compliance with Rule 10b5-1(c)(1), and noting that the transaction was executed automatically pursuant to the plan without any discretion by the insider. This reduces the risk of an SEC inquiry about whether the trade was truly pre-planned. The Cooley 2025-2026 SEC Annual Reporting Workshop confirms that Form 4 footnote best practices remain an active compliance discussion heading into 2026.

For the interaction between Form 4 and Form 144 for restricted stock sales under a 10b5-1 plan, see Finrep's Form 144 reporting requirements guide.

Form 144

Form 144 filers must now indicate whether the sale is pursuant to a 10b5-1 plan and, if so, the date the plan was adopted. This requirement took effect April 1, 2023.

Item 408 of Regulation S-K: Quarterly and Annual Issuer Disclosure

Under Item 408 of Regulation S-K, companies must disclose in their Form 10-Q and Form 10-K whether any officer or director adopted, modified, or terminated a Rule 10b5-1 plan or any other trading arrangement during the most recently completed fiscal quarter. The required disclosure includes:

• Name and title of the officer or director.
• Date of adoption, modification, or termination.
• Duration of the plan.
• Aggregate number of securities to be purchased or sold.

Pricing terms are explicitly excluded from the required disclosure. This requirement applied to fiscal quarters and years ending on or after October 1, 2023. Source: SEC Release No. 33-11138.

Compliance officers can use EDGAR full-text search to benchmark how peer companies are drafting their Item 408 disclosures. Searching for "10b5-1" in Form 10-K filings from 2024 to 2026 surfaces a wide range of disclosure styles and levels of detail.

Insider Trading Policy Disclosure

Companies must also disclose their insider trading policies as an exhibit to their Form 10-K, or explain why they do not have such policies. This requirement applies to fiscal years ending on or after October 1, 2023. For Section 16 reporting and Form 3/4/5 mechanics, see Finrep's Form 3 vs Form 4 vs Form 5 guide.

Can a 10b5-1 Plan Be Modified or Terminated?

Yes, but doing so carries real risk to the affirmative defense. A plan modification is treated as adoption of a new plan, triggering a fresh cooling-off period and requiring a new good-faith certification. Early termination does not automatically void the defense for trades already executed under the plan, but the SEC can use a pattern of early terminations to argue that the original plan was not adopted in good faith.

The 2022 adopting release makes clear that the affirmative defense is not available for plans that are part of a scheme to evade Rule 10b-5, even if the plan technically meets the formal requirements. A termination shortly before the release of negative earnings, followed by a new plan adoption after the news is public, is precisely the pattern the SEC's enforcement division watches for.

Practical guidance from Mayer Brown (January 2025): design plans with longer durations from the outset, build in enough flexibility through formula-based trading instructions to avoid needing modifications, and document the business reason for any termination contemporaneously.

Bona Fide Gifts and the Item 408 Disclosure Question

One live compliance question heading into the 2026 reporting season: if a 10b5-1 plan includes bona fide gifts of securities, must the company disclose the gifted shares in the Item 408 material terms disclosure? The Cooley 2025-2026 SEC Annual Reporting Workshop flags this as an open question, with no definitive SEC guidance as of mid-2026. The conservative position is to include gifted shares in the aggregate securities count disclosed under Item 408.

Company Blackout Windows vs. the Federal Cooling-Off Period

The federal cooling-off period and a company's internal blackout window operate independently. The federal period sets the floor; the company's blackout window may extend it further. The practical problem: the federal cooling-off period may expire while the company's blackout window is still closed, meaning the insider cannot trade even though the federal requirement is satisfied.

Best practice, confirmed by PwC's implementation guidance: align plan adoption to the opening of the company's trading window, so the federal cooling-off period runs concurrently with the blackout. This minimizes the risk that the cooling-off period expires during a closed window and the insider attempts to trade before the window reopens.

The Wilson Sonsini SV150 survey (December 2025) found that some companies now require the cooling-off period to end no earlier than the opening of the next trading window, effectively layering a company-imposed extension on top of the federal minimum.

Issuer Stock Repurchase Plans

CFOs using Rule 10b5-1 to defend company stock buyback programs should note: the 2022 amendments apply the good-faith and non-evasion conditions to issuers as well. The cooling-off period and single-plan conditions, however, apply only to individual insiders, not to the company itself. Source: SEC Release No. 33-11138. Repurchase programs should still be reviewed against the updated good-faith standard to confirm they were not structured to exploit MNPI about the company's own prospects.

2026 Compliance Checklist: Adopting a New Plan

Use this sequence when an officer or director wants to adopt a new Rule 10b5-1 plan:

1. Confirm open window. Adopt only during an open trading window, when the insider holds no MNPI.
2. Check the single-plan rule. Confirm no other active Rule 10b5-1(c)(1) plan exists for the same class of securities (other than an eligible tax withholding plan).
3. Check the single-trade plan count. If the new plan is a single-trade plan, confirm no other single-trade plan was adopted in the prior 12 months.
4. Draft the plan. Include specified or formula-based trading parameters; ensure the insider cannot exercise post-adoption discretion.
5. Execute the good-faith certification. The officer or director signs a written representation confirming no MNPI awareness and good-faith adoption. Keep this as a separate document from the plan.
6. Record compliance committee or board pre-approval with the date and open-window confirmation.
7. Calculate the cooling-off period. Apply the "later of 90 days or two business days after the next 10-Q/10-K" formula, capped at 120 days. Calendar the first permitted trade date.
8. Align with company blackout calendar. Confirm the first permitted trade date falls within an open window, or adjust expectations accordingly.
9. Prepare Item 408 disclosure. Flag the adoption for inclusion in the next Form 10-Q under Item 408 of Regulation S-K.
10. Brief the broker. Confirm the broker will check the Column 10 checkbox on Form 4 for each plan trade and include the required adoption date disclosure.

FAQ

What is the exact cooling-off period for a director under Rule 10b5-1 in 2026?

For a Section 16 director, the cooling-off period is the later of 90 days after plan adoption or two business days after the company files the Form 10-Q or Form 10-K for the quarter in which the plan was adopted, capped at 120 days. The 90-day leg controls in most cases when the plan is adopted shortly after earnings.

Can an insider have two active 10b5-1 plans at the same time?

Generally no. The 2022 amendments limit insiders to one active Rule 10b5-1(c)(1) plan at a time. The main exceptions are tax withholding sell-to-cover plans and sequential plans where the second plan does not begin until the first is fully complete.

Does cancelling a 10b5-1 plan void the affirmative defense for past trades?

Not automatically. Early termination does not retroactively void the defense for trades already executed. However, if the SEC can show that the plan was adopted in bad faith or that a pattern of terminations suggests the plan was used to exploit MNPI, the defense for prior trades may be challenged.

Does Rule 10b-5 apply to trading in private company shares?

Rule 10b-5's anti-fraud prohibition applies broadly to any purchase or sale of securities, including private company shares, if the transaction involves interstate commerce or a national securities exchange. The Rule 10b5-1(c)(1) affirmative defense, however, is most practically relevant for public company insiders trading registered securities, since private company trading rarely involves the same EDGAR disclosure infrastructure.

Are 10b5-1 plans publicly disclosed?

The plans themselves are not required to be filed publicly, but their existence, adoption dates, durations, and aggregate share counts must be disclosed by the company in its Form 10-Q and Form 10-K under Item 408 of Regulation S-K. Individual trades under a plan are disclosed on Form 4 with the Column 10 checkbox checked. Pricing terms are excluded from the required disclosure.

What happens if a company's insider trading policy conflicts with a 10b5-1 plan?

The federal Rule 10b5-1 requirements set the floor. A company's insider trading policy can impose stricter conditions, such as longer cooling-off periods, mandatory minimum plan durations, or restrictions on trading outside the plan. If a company policy is more restrictive than the federal rule, the company policy controls for that insider. The plan must satisfy both the federal requirements and the company's own policy to be fully compliant.