US SEC to toughen insider trading rules, propose changes to money market funds – News

Wednesday’s meeting will also focus on how to fix systemic risks in the trillion-dollar U.S. money market funds.

Washington – Progressive groups have urged the SEC to improve market resilience, including adjusting fund value based on trading activity



Published: Wed 15 Dec 2021, 16:08

The U.S. Securities and Exchange Commission (SEC) will propose on Wednesday to strengthen the safe-haven law allowing insiders to trade the company’s shares, as well as other rules aimed at improving business resilience. money market funds.

The agency will also propose rules to address issues highlighted by the collapse of New York’s Archegos family office earlier this year.

The long-awaited slew of proposed rules will mark a milestone for SEC Chairman Gary Gensler, who has promised an ambitious agenda since joining the Wall Street watchdog in April.

The proposed tightening of “10b5-1” corporate trading plans in particular will be applauded by progressives who have long said the current rules are too loose, allowing insiders to game the system and reap good deals at the expense of investors. . ordinary.

The plans currently allow insiders to execute trades in the company’s stock on a predetermined future date, providing legal protection against potential allegations of insider trading over material nonpublic information.

Critics say, however, that it’s far too easy to transmit, modify or reverse transactions with little oversight.

Wednesday’s proposal should require leaders to disclose those plans and any changes, none of which are uniformly required, according to scholars and advocates who have pushed for the changes.

Democratic-appointed commissioner Caroline Crenshaw also said she supports a so-called “cooling off period” of at least four to six months between the adoption of a 10b5-1 rule plan and the first exchange under the plan.

Wednesday’s meeting will also focus on how to fix systemic risks in the trillion-dollar U.S. money market funds, which were bailed out for the second time as investors fled those vehicles during the turmoil induced by the pandemic. from 2020.

Progressive groups have urged the SEC to improve market resilience, including adjusting the fund’s value based on trading activity to pass costs onto redeeming investors, known as “swing pricing”. .

Reuters

About Tammy N. McFarlane

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