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We recently reported on amendments to Rule 10b5-1 (“The SEC Buries the Lede on Rule 10b5-1 Amendments”), noting that in saying that the amendments “modernize” the rule the SEC may have made a misstatement, if not a material one.

However, we did not point out that as part of the so-called “modernization,” the SEC threw in an amendment of the rules under Section 16 of the Exchange Act.  Specifically, when the new rules take effect in April 2023, gifts of securities that can now be reported on Form 4 on a voluntary basis (but not within two business days) or on a deferred basis on Form 5 will have to be reported just like any other transaction – i.e., within two business days on Form 4. 

It is not clear what, if anything, this change has to do with Rule 10b5-1; in fact, there seems to be no connection at all, other than to provide another example of the SEC’s distrust of corporate America. 

The SEC didn’t exactly hide this change – it was noted in the Fact Sheet that accompanied the adopting release – but given the lack of any relationship between this change and the extensive amendments of Rule 10b5-1, I wouldn’t be surprised if it’s overlooked.  So if you didn’t see this lump of coal in your 10b5-1 Christmas stocking, you can be forgiven.  Just don’t compound it by overlooking the change once it takes effect.


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This publication is for general information only. It is not legal advice, and legal counsel should be contacted before any action is taken that might be influenced by this publication.

About Gunster

Gunster, Florida’s law firm for business, provides full-service legal counsel to leading organizations and individuals from its 12 offices statewide. Established in 1925, the firm has expanded, diversified and evolved, but always with a singular focus: Florida and its clients’ stake in it. A magnet for business-savvy attorneys who embrace collaboration for the greatest advantage of clients, Gunster’s growth has not been at the expense of personalized service but because of it. The firm serves clients from its offices in Boca Raton, Fort Lauderdale, Jacksonville, Miami, Orlando, Palm Beach, Stuart, Tallahassee, Tampa, Vero Beach, and its headquarters in West Palm Beach. With over 240 attorneys and consultants, and more than 240 committed support staff, Gunster is ranked among the National Law Journal’s list of the 500 largest law firms and has been recognized as one of the Top 100 Diverse Law Firms by Law360. More information about its practice areas, offices and insider’s view newsletters is available at www.gunster.com.

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