Why do employees choose ETP 10b5-1?

Employees primarily choose a 10b5-1 employee trading plan (ETP )for three reasons:

1. To gain affirmative defense against any insider trading concerns.
2. To systematically diversify their portfolio for overall financial well-being.
3. To convert stock to cash on a regular and predictable timetable to meet their expenses.

Most companies already offer some form of paper-based 10b5-1 plan to employees who could potentially be routinely exposed to material non-public information (MNPI). ETP can offer the same affirmative defense because it complies with the 10b5-1 framework, but instead of needing weeks of administrative paper-work, an ETP can be set up in just a few minutes online.

Some employees, especially those who are long-tenured, could potentially have a large portion of their wealth tied to their employer’s stock. It may be prudent for them to diversify systematically while also gaining affirmative defense.

Some employees, who live in expensive cities like San Francisco or New York, just need to be able to convert their stock to cash to meet their living expenses.

All in all, a company can expect 1 to 10% of its employees to participate and benefit from an employee trading plan (ETP).