10b5-1 Rebranding: Meet the ASP, the Automatic Selling Plan | Hatem Dhiab
A “Rule 10b5-1 trading plan” is not a name. It’s a Wi-Fi password.
It sounds like a replacement part for a dishwasher. Yet this little regulatory serial number sits between thousands of executives, founders and employees and some of their most valuable equity holdings.
It deserves a rebrand. So at Gerber Kawasaki, we coined a simpler name: the ASP, the Automatic Selling Plan. (An asp is also the name of a snake, a fitting metaphor for the apprehension some people feel when they hear the words “trading plan.”) Yes, a plan can buy as well as sell. But nobody calls me at 4:45 on a Friday worried about their buying plan.
What an ASP actually is
It’s a prearranged plan to buy or sell company stock on a set schedule, created at a time when you don’t know any material nonpublic information about your company. Because you set the rules in advance and then stepped away from the wheel, the plan may give you an affirmative defense if there are ever any questions.
You decide in advance. Then you let the robot do it.
A good ASP spells out how many shares, at what price or on what dates, and sometimes a formula that triggers the trade. A plain limit order doesn’t count, and once the plan is set you don’t get to steer it.
Where it came from
In the 1990s, courts argued over what it means to trade “on the basis of” inside information. Is it enough that you knew something when you sold? Or did someone have to prove you used it? If you were an executive who needed to sell for taxes, a house or diversification, that was a nightmare, because you almost always know something about your company.
In August 2000 the SEC adopted Rule 10b5-1. It set the awareness standard but added a safe harbor: adopt a written plan before you’re aware of material nonpublic information, follow it, and later knowledge won’t taint your trades. (The name comes from Section 10(b) of the Securities Exchange Act and the famous Rule 10b-5 beneath it. A footnote that grew up to run the building.)
Why it’s everywhere now
Industry research covering 150 public companies found that 97% reported insiders using 10b5-1 plans in 2025, up from 74% in 2021. The appeal is simple. An ASP lets you diversify even when the trading window is closed, makes a scheduled sale far easier to explain than a surprise one, and spares you from asking “is now okay?” every quarter.
Then came the plot twist. In December 2022 the SEC tightened the rules: cooling-off periods before the first trade (90 to 120 days for directors and officers, 30 days for everyone else), limits on overlapping plans, a good-faith requirement and more disclosure. The ASP is still your friend. It’s just a friend with a clipboard now.
When everyone needs one
At most companies, ASPs are for the people who regularly know things the public doesn’t. But I’m now seeing a large private technology company, preparing for a possible IPO, take a very different road. Its culture runs on openness, so nearly everyone sees nonpublic information. Its answer is that anyone who wants to buy or sell needs a plan, all of them, not only the executives.
The rules are unusual. Plans can only be set up or changed in a five-day window once a quarter, right after earnings. A 60-day cooling-off follows before anything trades. Spouses, trusts and anyone else whose trading you influence generally need their own plan. Miss the window and you wait a quarter. If this model spreads, the ASP stops being a niche executive tool and becomes the operating system for personal liquidity.
Being strategic
■ Start with your number.
How much is “enough”? How concentrated are you in one stock? The plan should serve those answers, not the other way around.
■ Sell in steps.
One trade is one guess. Scheduled sales or a ladder of price targets spread your timing risk, and a mix of time and price keeps you from missing upside or getting stuck with limits that never fill.
■ Respect the clocks.
Cooling-off periods and short windows mean you can’t wait until you need the cash. Work backwards from the tax bill, the down payment or the gift.
■ Plan the taxes first.
RSUs, ISOs, NSOs and long-held shares behave differently, and flat withholding can fall well short of your real bracket.
■ Count the household.
Spouses, trusts and entities may need plans of their own. Decide early who will actually trade.
■ Leave it alone.
Changes can restart the cooling-off period, and a pattern of canceling or amending can look like you’re picking trades. Design it carefully, then let it run.
Don’t build it alone
An ASP is a legal document, a tax strategy and a liquidity plan all at once, and it can quietly run for a year. A mistake in the design stays quietly in place for a year too.
Work with your financial advisor to figure out the actual strategy and how it fits inside your larger financial plan: your taxes, your charitable goals, your estate, your family, and the rest of your net worth. Bring your company’s counsel and your tax professional into the room before you sign. The best ASPs aren’t clever. They’re coordinated.
If you have equity and a plan coming together, or one you’ve never revisited, we’d be glad to help you think it through.
Hatem Dhiab
CFP®, CIMA® | Managing Partner
GERBER KAWASAKI
Gerber Kawasaki Wealth & Investment Management is an investment advisor located in California and is registered with the Securities and Exchange Commission (SEC). Registration of an investment advisor does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Gerber Kawasaki only transacts business in states in which it is properly registered or is excluded or exempted from registration requirements. Additional information about the firm is available on the SEC’s Investment Adviser Public Disclosure website at adviserinfo.sec.gov.
Hatem Dhiab is a Financial Advisor of Santa Monica, California-based Gerber Kawasaki Inc., an SEC-registered investment firm with approximately ~$4.78B billion in assets under management and assets under advisement as of 06/30/26. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. This material is for general information only and is not intended to provide specific tax or investment advice. Consult your tax professional regarding your individual situation. To determine which course of action may be appropriate for you, consult your financial advisor. No strategy assures success or protects against loss. Readers shouldn't buy any investment without doing their research to determine if the investments are suitable for their situation. “All investments involve risk and one should consult a financial advisor before making any investments. Past performance is not indicative of future results."
