On Wednesday, the Securities and Exchange Commission (SEC) will propose tightening a legal safe-harbor that permits business insiders to trade in the company's stock, as well as other measures to make money market funds more resilient.
The agency will also propose rules to address issues raised by the collapse of Archegos, a New York-based family office, earlier this year.
The announcement of a spate of long-awaited proposed rules will be a watershed moment for SEC chairman Gary Gensler, who has promised an ambitious agenda since taking over the Wall Street watchdog in April.
Progressives will applaud the planned tightening of "10b5-1" corporate trading plans, which they have long claimed are too lax, allowing insiders to scam the system and reap windfalls at the expense of ordinary investors. Insiders can already conduct trades in the company's stock on a pre-determined future date, offering legal protection against any insider trading claims based on material non-public information. However, critics argue that it is simply too simple to adopt, change, or cancel trades without any examination.
According to academics and advocates who lobbied for the revisions, Wednesday's proposal will oblige executives to reveal their intentions and any updates, which are currently not required routinely.
Caroline Crenshaw, a Democratic-appointed commissioner, has also stated that she favors a four-to-six-month "cooling-off period" between the approval of a Rule 10b5-1 plan and the first trade under the plan.
The meeting on Wednesday will also cover how to handle systemic risks in multibillion-dollar US money market funds, which were bailed out a second time after investors deserted those vehicles during the pandemic-induced crisis in 2020.
Progressive groups have encouraged the SEC to increase the market's resiliency, including "swing pricing," which involves altering the fund's value in step with dealing activity to transfer costs to redeeming investors.