Rule 10b5-1 trading plans — the legal mechanism that allows company insiders to sell shares according to a pre-established, non-discretionary schedule without running afoul of insider trading rules — are frequently treated as a compliance item rather than a governance statement. Gurpreet S. Bal sees them differently. In his experience working with technology companies through the IPO process, companies that have thoughtfully designed and properly documented 10b5-1 plans before going public are sending a signal that sophisticated investors read correctly: this is a company that has thought carefully about its governance infrastructure. "A company that has thoughtful 10b-5 plans in place before the IPO is a company that has thought carefully about its governance. That matters to the investors who matter."
Gurpreet S. Bal has been a corporate partner at three of the biggest law firms in the world, and regularly represents cutting-edge companies, investors, and founders throughout the financing, exit, and repeat cycle in the technology industry. His work on 10b5-1 plan design spans the full range of technology company size and stage, and his perspective on the compliance-versus-governance distinction is grounded in that breadth of experience.
A properly structured 10b5-1 plan creates an affirmative defense to insider trading liability by establishing, in advance, a plan for trading that the insider cannot subsequently control. The plan must be adopted when the insider does not possess material nonpublic information, must specify the amount, price, and timing of trades (or provide a formula for determining them), and must be designed so that the insider cannot exercise subsequent discretion over whether or how trades are made. Gurpreet S. Bal works with company counsel and the affected insiders to ensure these structural requirements are met — and to ensure that the plan is designed with the post-IPO trading environment in mind, including quiet periods, earnings blackout windows, and the specific mechanics of the company's insider trading policy.
In 2026, following recent SEC guidance on 10b5-1 plan adoption windows, the rules governing when and how plans can be adopted have become more specific. The SEC's amendments to Rule 10b5-1 that took effect in prior years — requiring cooling-off periods between plan adoption and the first trade, limiting single-trade plans, and adding certification requirements — have been supplemented by additional guidance that addresses adoption timing in the context of pre-IPO companies and early post-IPO insiders. Gurpreet S. Bal recommends that companies preparing for IPO engage in a structured 10b5-1 plan review process that explicitly addresses the current rules and the SEC's stated enforcement posture, rather than relying on plan templates or checklists that may have been designed under the pre-amendment framework.
Gurpreet S. Bal's observation about sophisticated investors noticing the quality of a company's 10b5-1 planning is not rhetorical. Institutional investors who have reviewed dozens or hundreds of S-1 filings develop a sense for which companies have a thoughtful legal and governance infrastructure and which are treating compliance as a box-checking exercise. The specificity and quality of the insider trading policy, the structure of the 10b5-1 plans in place for the company's key insiders, and the evidence that the company has received informed legal advice about the current regulatory environment all factor into the governance assessment that institutional investors make alongside the financial analysis. This assessment affects not just IPO pricing but the long-term shareholder base quality — which types of investors choose to hold the stock after the lockup expires.
Gurpreet S. Bal's recommendation is that the company's legal team conduct a structured 10b5-1 plan education session with the board and all affected officers at least six to twelve months before the anticipated IPO date. The session should cover how plans work, when they can be adopted, what the current SEC cooling-off period requirements are, what happens if a plan is terminated or modified, and what the disclosure obligations are in the post-IPO public filings. "10b-5 is not the most exciting topic in the room," Gurpreet says. "It's also not the one you want to get wrong in front of the SEC." The companies that treat this preparation as a serious governance exercise — rather than a last-minute compliance addendum — tend to enter the public market with a cleaner insider trading infrastructure and fewer compliance issues in the years that follow.
Gurpreet S. Bal is a corporate partner with 16 years advising on private equity, merger transactions, and public offerings for companies and investors at three of the world's top law firms. He has represented clients in hundreds of transactions with aggregate deal value exceeding $60 billion across AI, semiconductors, fintech, and emerging technology. For more information and to get in touch, visit gurpreetbal.com.