WASHINGTON, D.C. — The Securities and Exchange Commission (SEC) unveiled a sweeping proposal on Thursday to enhance regulations surrounding insider trading, aiming to close loopholes and increase transparency in corporate trading activities. The move has sparked significant interest across Wall Street, with potential implications for corporate governance and market volatility. Under the new rules, executives and corporate insiders would face stricter requirements for disclosing stock transactions, including shorter reporting windows and expanded definitions of what constitutes insider trading. The proposed changes would also place more scrutiny on the use of 10b5-1 trading plans — mechanisms designed to allow executives to trade company stock without violating insider trading laws. SEC Chair Gary Gensler stated, “In light of growing concerns over the misuse of material nonpublic information, this proposal aims to strengthen investor confidence and ensure a level playing field in our markets.” Gensler emphasized that recent high-profile insider trading cases have underscored the need for a more robust regulatory framework. The proposed changes come amid a broader crackdown by the SEC, which has ramped up enforcement actions by over 30% in the past year. Notably, several tech and pharmaceutical executives have been charged with trading on nonpublic information, raising alarm over the adequacy of existing safeguards. Market analysts suggest the new rules could lead to reduced insider-driven volatility but may also discourage some executives from participating in equity compensation plans. “Tighter compliance requirements could impact how companies structure executive pay and how insiders engage with the market,” said Lydia Tran, a regulatory analyst at Bernstein Research. Public comment on the proposal will be open for 60 days, after which the SEC will decide whether to adopt the rules. If passed, the regulations could take effect as early as Q1 2025. Investors responded cautiously to the announcement, with the S&P 500 closing down 0.4% on Thursday. Shares of companies with high insider ownership, particularly in the biotech and tech sectors, saw sharper declines as markets processed the potential impact of increased regulatory scrutiny. Financial institutions and corporate boards are now closely examining their compliance protocols in anticipation of the proposed changes. Legal experts warn that failure to adapt could expose firms to heightened legal risks and reputational damage. As the public and private sectors prepare for a potential regulatory shift, the SEC’s proposal signals a renewed focus on market integrity and accountability in the post-pandemic trading landscape.