TheCorporateCounsel.net

One of the benefits of the new requirement to file insider trading policies as 10-K exhibits is that we now have significantly more data on “what’s market” with respect to key policy terms. Previously, any benchmarking exercise was challenging due to limited available data — while some companies voluntarily chose to post their insider trading policies on their websites, many did not.

While insider trading policies, in particular, should really be tailored to the particular circumstances of any given company to be most effective, benchmarking is nonetheless helpful — especially to ensure that your policies and practices aren’t an outlier from your peers. The latest survey of insider trading policies recently filed by 50 public companies, including 25 Fortune 100 companies and 25 mid-cap companies, is now out from the team at White & Case, and it lays out the data in a readily understandable way using a number of charts to show the frequency of various approaches to key policy terms. For example, here are some stats on when quarterly “blackout periods” start and end, and who is subject to those periods and preclearance procedures:

– For the start of blackout periods, the majority of companies used two weeks before quarter end (55%), with three to four weeks before quarter end being the next most prevalent (22%). Notably, 8% of companies used five to six weeks before quarter end!

– For the end of quarterly blackout periods, the majority of companies used one full trading day after earnings are released (54%), and many companies used two full trading days after earnings are released (40%). Here, I was surprised to see that two companies left this to “company discretion.”

– The folks subject to the blackout periods were most commonly (86%) limited to directors, Section 16 officers/executive officers and other designated employees who have access to financial information. 14% of companies included all employees.

– The insiders subject to preclearance procedures usually aligned with the list subject to a company’s quarterly blackout periods, but not always. 86% limited preclearance requirements to directors, Section 16 officers/executive officers and other designated employees who have access to financial information. 4% imposed them on all employees, and 8% limited them to directors and Section 16 officers only. One company did not include preclearance procedures.

– Meredith Ervine