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Mintz leverages the substantial bipartisan support for the House-passed 8-K Trading Gap Act of 2019 (which we reported on here) to suggest companies consider these good governance insider trading policy/process practices, which the legislation aims to address:

• Ensure that prohibitions against trading on material non-public information, including market purchases of company shares, are being effectively communicated to executive officers and directors.
• Ensure there are effective procedures to keep the company’s pre-clearance officer(s) apprised of significant corporate events that should be considered when responding to inquiries from insiders in advance of securities transactions.
• Ensure adequate duration of blackout periods.
• Consider whether blackout periods should be extended to all Form 8-K triggers to reduce the appearance of any unfair advantage on the part of insiders.

The Act generally exempts transactions made pursuant to 10b5-1 plans that are adopted outside of the periods when trading under the Act would be prohibited (i.e., from the occurrence of triggering event through the Form 8-K filing/public disclosure). Chris Van Hollen (D-MD) introduced a mirror version of the Act in the Senate in September 2019.