February 20, 2022
I want to echo the comments of Steven Harrison below. It is not enough to require disclosures, but also placing maximum available windows for trading. I believe for members of congress and the federal government, that their maximimum window for executing trades after the cooling off period be shorter than that of the general public. There should be no incentive for front running trades against the american people.
Subject: File No. S7-20-21
From: Steven Harrison
Affiliation: Tax Professional
January 27, 2022
I applaud the Commission for making this change. I will however add that one area in which this rule could be enhanced is by adding a requirement that the 10B51 trading plan require a maximum time window for executing trades after the cooling off period for any director enacting a single transaction 105B1. This would prevent executives at companies in highly cyclical industries from circumventing the new requirements.
For instance...
Executive A works for a retailer, files a 10B51 that will allow him to make a 1 time trade of 0-50% of his stock. This is done just prior to the end of the fiscal year. It's disclosed in the Q1 financial statements. The cooling off period is 120 days. Publicly they state that the 10B51 is just a safe harbor in case of personal emergency, etc.
While at the time of filing he may not have public information. During the 4th Quarter they realize that holiday sales are slow and that they will miss annual projections.
He is passed the cooling off period and sells his stock according to the 10B51 plan.
By placing a maximum window by which they must sell the stock, this would prevent executives from gaming the 10B51 requirements by disclosing the plan early in the year, or in a seasonally low time, and then deciding to execute a trade in the seasonally high time when the companies results are known albeit not to the public.