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Definition of 'Rule 10b5-1'
A rule established by the Securities Exchange Commission (SEC) that allows insiders of publicly traded corporations to set up a trading plan for selling stocks they own. Rule 10b5-1 allows major holders to sell a predetermined number of shares at a predetermined time. 10b5-1 plans are used by many corporate executives in an attempt to avoid accusations of insider trading.
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Investopedia explains 'Rule 10b5-1'
It is not uncommon to see a major holder sell some of his/her shares at regular intervals. For example, a director of XYZ Corporation may choose to sell 5,000 shares of stock on the second Wednesday of every month. To avoid conflict, 10b5-1 plans must be established when the individual is unaware of any material non-public information.
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Search results for 'Rule 10b5-1'
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http://www.investopedia.com/articles/stocks/07/10b5-1.asp
... investors. Read on to learn more. What is a 10b5-1 plan? Rule 10b5 is
one of the most important acts put forth by the SEC. This ...
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http://www.investopedia.com/articles/03/100803.asp
... Under Rule 10b5-1, the SEC defines insider trading as any securities transaction
made when the person behind the trade is aware of nonpublic material ...
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