Rule 10b5-1 trading plans
A 10b5-1 plan is a written contract an insider sets up in advance that trades their stock automatically on a schedule or formula — so the trades execute later without any decision from them. Adopted properly, the plan is an affirmative defense against insider-trading liability: the insider committed to the trades at a time when they had no material non-public information, so an execution months later can’t have been driven by what they learned in between.
For a reader of filings, the flag matters in one direction: a planned sale is scheduled, not chosen. An executive selling every month under a plan adopted a year ago is diversifying on autopilot. The same sale made discretionarily — no plan — was a decision made this week.
The 2023 tightening
The rule dates to 2000 and spent two decades accumulating abuse stories — plans adopted and traded days later, overlapping plans cherry-picked after the fact. SEC amendments adopted in December 2022 (effective 2023) closed most of it:
- Cooling-off periods. Directors and officers must wait before the first trade: the later of 90 days after adopting or modifying the plan, or two business days after the company files the financial statements covering the quarter of adoption (capped at 120 days). Other insiders wait 30 days.
- No overlapping plans, with narrow exceptions, and at most one “single-trade” plan per twelve months.
- Certification. Directors and officers must certify, when adopting, that they hold no material non-public information and act in good faith.
- Disclosure. Companies now describe plan adoptions and terminations quarterly, and — the part visible in this data — every Form 4 and 5 carries a checkbox declaring whether the reported trade was under a 10b5-1 plan, mandatory for filings since April 2023.
How this site shows it
Honestly, in three states. Feed rows and filing pages show 10b5-1 when the box is checked, nothing when the filer left it unchecked, and “plan?” for filings that predate the checkbox — because on a 2019 filing the answer isn’t “no,” it is unknowable from the form. Sites that render old filings as non-plan trades are manufacturing certainty the data doesn’t contain. See any day of the sale feed for all three states in the wild.
Reading planned vs discretionary trades
The research consensus and common sense agree here: scheduled sales carry little information, discretionary ones carry some, and open-market purchases carry the most — buys are almost never plan-driven, because nobody needs an affirmative defense to buy their own stock with conviction. When you see a large discretionary sale by an officer outside any plan, that is the row worth the footnote-read.
Common questions
What does the 10b5-1 checkbox on a Form 4 mean?
The filer is declaring the trade was executed under a Rule 10b5-1 trading plan adopted earlier, at a time they certify they had no material non-public information. The checkbox has been mandatory on Forms 4 and 5 since April 2023; older filings simply don’t have it.
Are 10b5-1 sales bearish?
Usually not. A planned sale executes on a schedule set months earlier, commonly for diversification or liquidity. Discretionary sales — no plan — are the ones where timing was a fresh decision, and even those have many innocent explanations. Purchases are the more informative direction.
How long must an executive wait after adopting a 10b5-1 plan?
Since the 2023 amendments, directors and officers face a cooling-off period ending the later of 90 days after adoption or two business days after the quarterly financials covering adoption are filed, capped at 120 days. Insiders who are not directors or officers wait 30 days.
Can a 10b5-1 plan be cancelled?
Yes — terminating a plan is not itself trading. But a termination can undermine the good-faith requirement and the affirmative defense for past and future plans, and since 2023 companies must disclose adoptions and terminations by directors and officers in their quarterly reports.
Keep reading
- What is SEC Form 4? — SEC Form 4 explained: who must file it, the two-business-day deadline, what Tables I and II report, and how insider buys and sales become public record.
- How to read a Form 4 — A walkthrough of a Form 4 insider filing: the relationship boxes, every Table I and Table II column, the footnotes, and the Rule 10b5-1 checkbox.
- Form 4 filing deadlines — When a Form 4 is due: the two-business-day rule from Sarbanes-Oxley, EDGAR’s 10 pm cutoff, the narrow exceptions, and what actually happens to late filers.
- Form 3 vs Form 4 vs Form 5 — The three Section 16 ownership forms compared: Form 3 when you become an insider, Form 4 within two business days of a trade, Form 5 as the annual catch-up.
- Transaction codes — What each SEC Form 4 transaction code means — P, S, A, M, F, G and the rest — and which ones are real open-market trades.
- What is insider trading? — Insider trading is legal when insiders report their trades and illegal when anyone trades on material non-public information.
- Reading insider buying — Which insider-buying patterns carry information according to the published research — cluster buys, purchase size versus stake, the buyer’s role — and which are noise.