First sale timing
10b5-1 cooling-off period: plan backward from the first trade.
The cooling-off period is the waiting period between adopting a 10b5-1 plan and the first permitted trade under the plan. It prevents a plan from being adopted immediately before a trade that could look opportunistic.
Cooling-off period by role
Directors and officers
The cooling-off period generally runs until the later of 90 days after plan adoption or two business days after the issuer discloses financial results for the fiscal quarter in which the plan was adopted, subject to a 120-day maximum.
Other people covered by the rule
For people other than directors, officers, or issuers, the SEC amendments added a 30-day cooling-off period before trades can begin under the plan.
Issuer plans
The amended cooling-off-period requirements described above do not impose the same cooling-off period on issuer share-repurchase plans, but companies may still have internal policies and disclosure obligations.
Calendar example
Assume a public-company executive adopts a plan during an open trading window on March 15. The 90-day mark is June 13. If the company files the next Form 10-Q covering the adoption quarter on May 8, two business days after that filing is earlier than June 13, so the first-sale date will usually be no earlier than June 13. If the filing timing pushes the result beyond 120 days, the cap becomes relevant.
Planning implications
- Adopt before you need liquidity. Waiting until a tax payment, home purchase, or lockup deadline is near may leave no compliant runway.
- Coordinate with earnings cycles. Plan adoption during an open window still has to account for when financial results are filed.
- Give brokers operational time. Broker review, company approval, Rule 144 paperwork, and account setup can add days or weeks.
- Do not treat modification as harmless. Certain changes can be treated as ending one plan and adopting another, which may restart cooling-off timing.
Read the broader 10b5-1 rule guide, compare example plan structures, or use the pre-adoption checklist.
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