Updated July 29, 2026. Quick answer: A director or Section 16 officer waits the later of ninety days after adoption or two business days after the issuer discloses financial results on Form 10-Q or Form 10-K for the completed fiscal quarter in which the plan was adopted — subject to a hard cap of 120 days after adoption. Anyone else who is not the issuer waits a flat thirty days. The issuer itself has no cooling-off period.
The rule as written
The two tiers. Under Rule 10b5-1(c)(1)(ii)(B)(1) a director or Section 16 officer waits the later of ninety days after adoption, or two business days after the issuer discloses financial results for the fiscal quarter in which the plan was adopted — “but, in any event, this required cooling-off period is subject to a maximum of 120 days after adoption.” Everyone else who is not the issuer gets a flat thirty days under (B)(2). The issuer itself has no cooling-off period at all.
| Who adopts the plan | Cooling-off period | Rule |
|---|---|---|
| Director or Section 16 officer | Later of 90 days after adoption, or two business days after the Form 10-Q or 10-K disclosing results for the completed quarter of adoption — maximum 120 days | (c)(1)(ii)(B)(1) |
| Any other person, not the issuer | 30 days after adoption | (c)(1)(ii)(B)(2) |
| The issuer | None | (c)(1)(ii)(B) by omission |
The 120-day cap is what makes the second prong survivable, and the timing runs opposite to intuition. The clock runs to the report covering the quarter in which the plan was adopted — not to whatever filing happens to come next. So adopting just after a quarter closes is the expensive moment: the new quarter has barely started, its Form 10-Q is roughly four months out, and the wait runs all the way to the 120-day cap. Adopting late in a fiscal quarter is the cheap moment: that quarter ends within weeks, its report follows about forty days later, and the second prong is satisfied before the ninety-day floor runs out — so the floor governs and ninety days is the whole wait. The crossover sits near the middle of a quarter.
The certification is in the plan, not filed with anyone
Rule 10b5-1(c)(1)(ii)(C) requires a director or Section 16 officer to include a representation in the plan itself certifying that on the adoption date they are not aware of material nonpublic information about the security or the issuer, and that they are adopting the plan in good faith and not as part of a scheme to evade the rule. It is a term of the document: the certification itself is not filed with the SEC.
Two limits that catch people after the cooling-off period ends
Overlapping plans. Under (c)(1)(ii)(D) a person other than the issuer may not have another open-market plan running, with three carve-outs: multiple broker contracts that together satisfy the rule count as one plan; exactly one later-commencing successor plan is allowed, unless its first trade falls inside the successor’s own Effective Cooling-Off Period; and eligible sell-to-cover plans are excluded from the limit.
Single-trade plans. Under (c)(1)(ii)(E) a person other than the issuer may rely on the defence for only one single-transaction plan in any twelve-month period. Sell-to-cover plans are outside this limit too.
The sell-to-cover carve-out is narrower than its name suggests. It covers a plan authorising sales only of what is necessary to satisfy tax withholding arising exclusively from the vesting of a compensatory award, where the insider does not otherwise control the timing. Sales to fund an option exercise are not within it.
Changing a plan after adoption has its own consequence — a modification restarts the clock.
Sources
17 C.F.R. §240.10b5-1(c)(1)(ii)(B), (C), (D) and (E), and §240.10b5-1(c)(1)(iv), which defines “officer” by cross-reference to Rule 16a-1(f); Insider Trading Arrangements and Related Disclosures, Release Nos. 33-11138 and 34-96492, 87 Fed. Reg. 80362 (Dec. 29, 2022). All read July 2026. Rule 16a-1(f) itself was not pulled and its text is not quoted here.
This states what the cited authority says. It is not tax or legal advice. Constructive-sale analysis, partnership nonrecognition and insider-trading defences all turn on transaction documents and facts that no page can see, and the instruments described here are executed under contracts whose terms vary by provider.