Help Your Clients Navigate Insider Trading Rules With Pershing's Rule 10b5-1 Trading Plan Solution Issue 4 December 2007 20071201 Compensation in the form of restricted securities or stock options can be both a blessing and a burden for senior executives.
The Pershing Press | Sales Insights and Opportunities for Investment Professionals
Help Your Clients Navigate Insider Trading Rules With Pershing's Rule 10b5-1 Trading Plan Solution
Issue 4 December 2007

Compensation in the form of restricted securities or stock options can be both a blessing and a burden for senior executives. Even as their shares appreciate in value, Securities and Exchange Commission (SEC) regulations and employer's rules on trading company shares may make it difficult for insiders to liquidate their holdings.

The good news is that through collaboration with Restricted Stock Systems, Inc. (RSS), Pershing offers access to a Rule 10b5-1 Trading Plan solution, which can help solve this dilemma. The most robust solution available today-and the only one to incorporate automatic trade execution-this new solution gives you the tools to manage your clients' Rule 10b5-1 trading plans with reliability and ease. The automatic trade execution component allows them to trade restricted shares, achieve portfolio diversification goals, and comply with all applicable regulations, ultimately, providing them with peace of mind, and you with a leg up on the competition.

Freedom from Illiquidity
In today's regulatory environment, corporations and their executives are acutely sensitive to the need to avoid even the appearance of insider trading. Apart from the risk of legal sanctions-including fines and jail sentences-the adverse publicity can be devastating on both a personal and corporate level.

"Armed with a properly-outlined Rule 10b5-1 trading plan, executives are able to sell their stock irrespective of blackout periods, trading windows, or limitations imposed by the company's insider-trading policies."

That doesn't mean that restricted securities should be locked up in your client's portfolios. Enacted in October 2000, SEC's Rule 10b5-1 provides some relief from insider trading restrictions by laying out explicit trading guidelines. Armed with a properly-outlined Rule 10b5-1 trading plan, executives are able to sell their stock irrespective of blackout periods, trading windows, or limitations imposed by the company's insider-trading policies. The plans also provide "an affirmative defense" to insider trading allegations.
More and more companies are requiring that potential insiders, including senior executives, board members, affiliates, and key shareholders, must adopt Rule 10b5-1 trading plans. Indeed, with such mandates now in place at 67 percent of all U.S. public corporations, Rule 10b5-1 trading plans represent a significant growth opportunity for you to capture a share of this market.

"Pershing's innovative Rule 10b5-1 Trading Plan solution strengthens your client offering and helps you deliver the highest levels of client service and satisfaction."

Adding Value-for You and Your Clients
The Rule 10b5-1 trading plan can be accessed through NetExchange Pro®, Pershing's web-based brokerage platform. Thus, functions that would otherwise have to be processed manually are streamlined and automated, enabling you to deliver enhanced service in less time. You can use it to customize plans to clients' trading specifications and total investment profile.

Other Key Benefits Include:

  • Automated, wizard-based functionality-The on-screen wizard walks you step-by-step through the process of creating a plan, based on your client's specific requirements and trading parameters
  • Single sign-on capability-Once you've logged on to NetExchange Pro, you'll have full, up-to-the-minute access to all Rule 10b5-1 trading plan functions and resources via an intuitive user interface
  • Real-time market data-Streamlined connectivity links NetExchange Pro, The Rules Engine™, and Pershing's trading desks
  • Powerful online reporting tools-View and analyze commission revenues, assets under management, plan volumes, and trade executions. All reports can be downloaded in a PDF or Microsoft Excel® spreadsheet format
  • Instantaneous e-mail notifications-You'll be alerted when your clients need to file SEC Section 16 Insider Trading Form 4. The interactive wizard will specify the appropriate filing and prepopulate the correct paperwork for Rule 144, 144A, 145, 701, 904, and S-3 restrictions
  • Straight-through trade processing-Receive automatic notification whenever a trading parameter is met and it's time to sell. There is no need to write a separate ticket or even shift to another screen-a single click will automatically execute the trade

Pershing's innovative Rule 10b5-1 Trading Plan solution strengthens your client offering and helps you deliver the highest levels of client service and satisfaction. The latest offering in our suite of Corporate Executive Services, our innovative solution is integrated into NetExchange Pro and lets you access relevant market data, rules, filing requirements, and trading parameters. As a result of its integration into NetExchange Pro, Pershing's Rule 10b5-1 Trading Plan solution can be accessed anywhere, anytime-heightening your competitive edge.





Compensation in the form of restricted securities or stock options can be both a blessing and a burden for senior executives.

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