By Michelle Price and Katanga Johnson
WASHINGTON (Reuters) - The U.S. Securities and Exchange Commission (SEC) on Wednesday proposed new rules that will affect publicly listed companies and their top executives, banking groups and asset managers. Here is a summary of the proposals.
CORPORATE TRADING PLANS
The agency proposed tightening "10b5-1" corporate trading plans that allow insiders to buy and sell the company's stock on a pre-determined future date without falling foul of rules against trading on material non-public information.
The SEC proposed mandating that executives disclose those plans and any modifications, which is not currently required.
It also wants a cooling-off period of 120 days between the time an executive adopts a plan and executes the first trade, while companies trading in their own securities would be subject to a 30-day cooling off period. The SEC wants to bar multiple and overlapping plans, which may allow insiders to cherry pick among favorable plans.
Officers and directors will also have to certify they're not in possession of material, non-public information when adopting or amending plans.
SHARE BUY-BACK DISCLOSURES
The proposed rules on share buybacks would require an issuer to disclose details of the share buybacks the first business day following the trade, in contrast to the current requirement to provide only quarterly disclosure of aggregated monthly data.
In addition, the SEC wants companies to disclose the objective or rationale for the repurchases and the process or criteria used to determine the amount; policies and procedures relating to purchases and sales of its stock by insiders during a repurchase program; and if the issuer is using a trading plan.
SECURITY-BASED SWAPS
The SEC rule, outlined here https://www.sec.gov/news/press-release/2021-259?utm_medium=email&utm_source=govdelivery, would require any person or entity who owns a security-based swap that exceeds a certain threshold to promptly provide a public disclosure with the SEC.
MONEY MARKET FUNDS
The SEC proposed changes for money market funds aimed at improving funds' liquidity and discouraging redemptions. It said funds should raise the proportion of liquid assets they must have on hand and scrap fees and redemption suspensions which tend to panic investors into making withdrawals.