Overview of the SEC and DOL

The Securities and Exchange Commission (the "Commission") and the Department of Labor ("DOL") recently issued final regulations under the Sarbanes-Oxley Act of 2002 regarding blackout periods, 17 C.F.R. §§ 245.100 to 245.104, 29 C.F.R. §§ 2520.101-3 and 2560.502c-7. Very generally, these rules, in response to recent highly publicized corporate scandals, are intended by the regulators to "equalize[] the treatment of corporate executives and rank-and-file employees" by generally preventing executives from engaging in certain transactions with company securities during the time period that a significant number of company rank-and-file employees are prohibited from engaging in transactions with company securities in their employee benefit plans. The Commission rules, known as Regulation BTR, focus on restrictions on transactions by executive officers and directors during a blackout period under certain employee benefit plans, while the DOL rules focus on the requirement that plan administrators provide notice in the event of a blackout period. Both sets of rules were generally effective January 26, 2003, subject to a few transition rules.