In a significant move that could reshape corporate governance and impact stock market behavior, the U.S. Securities and Exchange Commission (SEC) on Monday proposed a sweeping set of reforms to crack down on insider trading. The proposed rules would impose stricter disclosure requirements and limit the ability of executives to trade company stock around sensitive corporate events. Under the new proposal, corporate insiders—including CEOs, CFOs, and board members—would be required to provide more detailed and timely disclosures of their stock trades. The SEC also seeks to shorten the window for Form 4 filings, which report insider trades, from two business days to one. Additionally, the reforms would limit or eliminate the use of 10b5-1 trading plans, which allow executives to schedule trades in advance to avoid allegations of insider trading. SEC Chair Gary Gensler stated that the reforms are designed to restore investor confidence and ensure a level playing field. “Investors deserve to know when executives are buying or selling shares, especially during critical periods like earnings announcements or mergers,” Gensler said in a statement. “These changes will bring greater transparency and fairness to our markets.” The announcement comes amid growing concerns over the timing of insider trades, particularly during periods of heightened market volatility. A recent study by the University of Pennsylvania found that over 15% of trades by top executives occurred within a week of major corporate news, raising questions about the adequacy of current safeguards. Market analysts predict that the proposed rules, if enacted, could lead to more cautious trading behavior by insiders and potentially reduce short-term volatility in certain stocks. “Tighter disclosure requirements will make it harder for executives to capitalize on non-public information,” said Julia Chen, a senior analyst at Morningstar. “This could enhance market integrity but may also reduce insider trading volume, affecting liquidity in some stocks.” The proposal is now open for a 60-day public comment period, after which the SEC will consider potential revisions before implementing final rules. If adopted, the regulations would mark the most substantial overhaul of insider trading rules in nearly two decades. Wall Street reacted cautiously to the news, with the S&P 500 closing slightly lower on Monday, down 0.3%, as investors weighed the implications for corporate behavior and stock performance. Tech and healthcare sectors saw modest declines, reflecting concerns about executive trading practices in those industries. As the regulatory landscape evolves, corporations and investors alike will be watching closely to see how the new rules may reshape the balance between transparency and executive autonomy in America's capital markets.