In a significant policy development that could impact stock markets, the U.S. Securities and Exchange Commission (SEC) on Tuesday unveiled a proposal to tighten regulations on insider trading, particularly focusing on executive trades occurring near corporate share repurchase announcements. The proposed changes come amid growing scrutiny over how buybacks may be used to benefit corporate insiders at the potential expense of shareholders. Under the new framework, company executives would face a mandatory 120-day cooling-off period before they can sell any shares following the announcement of a buyback. Additionally, companies would be required to provide greater transparency by disclosing detailed daily data on buyback activity—an enhancement from the current quarterly aggregate disclosures. SEC Chair Gary Gensler stated that the move aims to bolster investor confidence and ensure a fairer market. “We’ve observed patterns where executives sell shares shortly after announcing buybacks, potentially capitalizing on short-term price increases,” Gensler said. “These proposed rules are designed to address that conflict of interest and improve market integrity.” The announcement comes as corporate share buybacks have surged to record levels in recent quarters, fueled by robust earnings and excess cash on corporate balance sheets. In 2023 alone, S&P 500 companies repurchased over $900 billion in shares. Critics argue that some executives may be incentivized to initiate buybacks to temporarily boost stock prices and enhance their own compensation, which is often tied to share performance. Market analysts expect the proposed rules—if implemented—to influence corporate behavior and potentially moderate the pace of buybacks in the short term. “This could lead to a temporary shift in capital allocation strategies,” said Lisa Carter, head of U.S. equity research at Morgan & Harris. “Companies may delay or scale back repurchases if executive flexibility is restricted.” The proposal will undergo a 60-day public comment period before the SEC makes a final decision. If adopted, the changes could take effect by mid-2025. Investors are watching the development closely, as buybacks have historically provided a strong tailwind for equities. Shares of companies with active repurchase programs, including major tech and financial firms, were mixed in Tuesday's trading session following the news. The SEC’s initiative is part of a broader regulatory push by the Biden administration to increase corporate accountability and reduce potential market manipulation. It also reflects heightened political attention on executive compensation and income inequality in the post-pandemic era. As Washington sharpens its focus on corporate governance, markets are likely to see increased volatility around policy shifts that affect earnings strategies and executive incentives.