Why a 10b5-1 plan sale carries low information content versus a discretionary sale Toggle between a 10b5-1 plan path (sealed conduit from adoption to automatic broker execution, low information content) and a discretionary path where current MNPI modulates the sale timing (high information content). 10b5-1 plan path discretionary path time 1. Adopt 10b5-1 plan certify no MNPI 2. plan instructions count · price · dates fixed 3. sealed time pipe intervening events flow past — insider cannot alter plan (earnings, news) deflected earnings 4. broker executes automatic · per plan 5. low information content sale cannot signal view current MNPI insider holds it now reacts to insider chooses timing discretionary decision broker executes open-market order high information content sale signals near-term view
active flow dormant / deflected threshold / gate
10b5-1 plan sale. The sale is executed by the broker per fixed instructions adopted when the insider had no MNPI; the timing carries no signal about near-term prospects.