In a significant policy shift aimed at enhancing market transparency, the U.S. Securities and Exchange Commission (SEC) on Thursday proposed new rules that would require corporate insiders to disclose trades in company stock within one business day, down from the current two-day requirement. The proposed changes also call for enhanced narrative disclosures about pre-planned trading arrangements under Rule 10b5-1, which allow executives to buy or sell stock on a predetermined schedule. SEC Chair Gary Gensler said the proposal comes in response to growing concerns about the misuse of insider knowledge and erosion of investor trust. "Insider trading undermines confidence in the fairness of our markets. By tightening disclosure timelines and shining more light on pre-planned trades, we aim to ensure that all investors have access to timely, material information," Gensler stated during a press briefing. Under the proposed rule, insiders would also need to disclose the adoption, modification, or termination of 10b5-1 trading plans, and companies would be required to report quarterly on such activities. The SEC is opening a 60-day public comment period, after which the rule could be finalized and implemented as early as the second quarter of 2025. The proposal has elicited mixed reactions from market participants. Investor advocacy groups praised the move as a step toward greater corporate accountability. "This is a win for retail investors who often find themselves a step behind due to opaque corporate practices," said Lisa Bloomfield, policy director at the Investor Protection Coalition. However, corporate lobbyists and some legal experts caution that the tighter disclosure window could discourage executives from engaging in legitimate trading activity, potentially increasing share price volatility. "While well-intentioned, the rule could lead to overreactions in stock prices due to the increased visibility of insider trades, many of which are benign or routine," said John Merrick, a securities law professor at NYU. Investors responded swiftly to the news, with several major tech and pharmaceutical companies—sectors with frequent insider activity—seeing shares dip in late afternoon trading. Analysts predict further volatility in the short term as markets digest the potential implications of the rule. The SEC’s move follows a broader push by the Biden administration to crack down on corporate malfeasance and improve market fairness. The effectiveness of the proposed rules in curbing abuses without stifling legitimate activity remains to be seen, but for now, they represent a significant development that could reshape executive trading behavior and market dynamics in the coming months.