SEBI trading plan vs Rule 10b5-1 plan (2026)

On SEBI trading plan vs Rule 10b5-1 plan, both let a company insider pre-commit to trades so the timing decision is made before they hold price sensitive information. The mechanics diverge sharply. India's plan under Regulation 5 of the SEBI PIT Regulations is approved by the compliance officer, notified to the stock exchanges and irrevocable. The US plan under SEC Rule 10b5-1(c) needs no approval at all and can be terminated, but it only works if a list of conditions is met. This compares the two across cool-off, approval, disclosure and what happens if the plan is not followed. It is not investment advice.

SEBI trading plan vs Rule 10b5-1 plan: what does each do?

The problem is identical in both markets. A director or senior officer is almost never free of material non-public information, so any trade they place invites the question of what they knew when they placed it. Both regimes answer it the same way: fix the trades in advance, while the insider is clean, and let them run.

The difference is what the plan buys you. In India, an approved plan takes the insider outside the trading window restrictions and the pre-clearance requirement under the provisos to Regulation 5(3), which is a permission. Note what it no longer buys: the contra trade exemption was deleted with effect from September 24, 2024, so the six month bar on reversing a trade in Clause 10 of Schedule B applies to plan trades too. In the US, a compliant plan gives an affirmative defense to an insider-trading claim under Rule 10b-5, which is a shield you raise afterwards. Permission versus defense explains most of the design gap that follows.

How do the conditions compare?

The overlapping-plan restriction is narrower than "one plan at a time", and the carve-outs matter if you are reading a filing. A person other than an issuer may hold two plans where trading under the later-commencing plan cannot begin until every trade under the earlier plan has been executed or has expired unexecuted. A sell-to-cover arrangement does not count as an overlapping plan, provided the agent may sell only what is needed to meet tax withholding on a vesting compensatory award and the holder does not control the sale's timing. And a series of separate contracts with different broker-dealers executing a single plan is treated as one plan, not several.

The numbers converge more than the structures do. Both regimes landed on roughly four months as the gap that makes pre-commitment credible. India got there in the 2024 rewrite of India's trading plan rules, notified June 25, 2024, which cut the cool-off from six months and dropped the old twelve month minimum plan duration. The US got there in the amendments adopted in December 2022 and effective February 27, 2023, which introduced cooling-off periods where the rule previously had none.

What happens when the plan is not followed?

This is the sharpest divergence, and it matters for anyone reading the filings.

In India, non-implementation is itself a reportable event. If an approved plan is not carried out in full or in part, the insider must inform the compliance officer within two trading days of the end of the plan's tenure, with reasons and supporting documents. The audit committee then assesses whether those reasons are genuine, and the compliance officer informs the exchange. A plan that quietly did not happen leaves a paper trail.

In the US, a plan can simply be terminated. The discipline is different: termination by a director or officer is a material term disclosed quarterly under Item 408, and the good-faith requirement means the plan must be operated in good faith, not just adopted in good faith. Serial adoption and cancellation is the pattern the 2022 amendments were written to expose.

Which record is easier to read from the outside?

India shows you the plan. Because the compliance officer notifies the exchanges on approval, the existence and broad shape of the commitment is public before any trade happens, and the trades then appear in the continual disclosures you can track insider buying from.

The US shows you the trade with a label. The Form 4 checkbox tells you a given sale ran under a plan, and Item 408 gives you the plan's material terms in the next periodic report. If you are following US insiders, the sequencing detail is in what is a Rule 10b5-1 plan and Rule 10b5-1 plan vs Form 144.

Either way, the reading is the same. A pre-planned trade carries less timing information than a discretionary one, in both markets, by design. That is a fact about the mechanism, not a view on the company. Flock reads these public filings and keeps each one stamped with its date and source. What any of it means for you is your call to make.