Trade pre-clearance
Insiders ask before they trade, an approver approves through a date or denies with a reason, and a trade inside an approval fills the Form 4 checklist's Pre-clearance row.
What it is
An insider asks the company before trading, an approver approves it through a date or denies it, and TakePublic records both.
Most insider trading policies ask directors and officers to get approval before they trade, usually from the general counsel or a compliance officer, and the approval stands for a few business days. The discussion itself happens outside TakePublic.
It is on every plan, once a company admin turns on We pre-clear insider trades in Settings › Insider program. While it is off, pre-clearance reads not applicable on the Form 4 checklist.
Requesting pre-clearance
An insider requests from My filings with Request pre-clearance. A company admin, or a company user who works on Section 16, can file one for an insider from Insiders, Pre-clearance.
An insider's own request opens once EDGAR verifies their EDGAR codes; until then the button is greyed and opens their codes in Settings.
The request names the security, the direction (buy, sell, gift or exercise), the approximate number of shares, the first and last day the insider means to trade, and whether the trade is under a Rule 10b5-1 plan. One optional note goes on the request; there is no thread.
A company can decide that trades under a Rule 10b5-1 plan need no pre-clearance. The form then says so and takes no request for a plan trade.
Approving or denying
Company admins and the company's Section 16 contact approve by default. In Settings › Insider program, a company admin can name the approvers instead: company admins, company users who work on Section 16, and counsel, your own or your law firm's counsel who may sign off on your engagement. The preparer reads requests but does not decide them, and nobody decides their own request while anyone else can.
When the insider is the only person who can decide their request, for example the company's only admin or its only named approver, they decide it themselves with a one-sentence reason. The request form says so when they file it. The decision reads Self-approved or Self-denied wherever it shows, the reason is on the audit trail, and the company's other admins, if it has any, are told.
Waiting requests are on each approver's own Home, under Needs you. Beside the request the approver reads the trading window, the insider's plans, recent trades, open Forms 4 and the short-swing check.
Approve sets the shares approved (the amount requested, or fewer) and the last day the approval stands, by default the company's number of business days from today, Eastern Time. Deny needs a one-sentence reason. Either is recorded with who decided and when, written to the audit trail, and told to the insider in TakePublic and by email.
An approval whose days reach a blackout window needs a written blackout override reason, recorded with the decision.
Emails never carry the trade, the shares or a denial's reason; the insider reads the reason on their request.
Expiry
An approval stands through the end of its last day, Eastern Time, then reads Expired. A request nobody decided before its last intended day passed expires too. A trade after that needs a new request.
- Waiting: no decision yet.
- Approved until a date: the approval stands; Approved for N of M shares when it covers fewer shares than asked.
- Denied: the reason is on the request.
- Self-approved or Self-denied: the insider decided their own request because no one else could; their reason is on the request.
- Expired: the approval or the intended dates have passed.
- Expired unused: the insider answered that they did not trade under it.
- Trade reported: the insider reported a trade under it, waiting in Needs review until the company records it.
- Used: a recorded trade drew on the approval.
Did you trade?
An approval counts as used only once a trade under it is recorded. On its last day, Eastern Time, or once it has passed with no recorded trade, TakePublic asks the insider once whether they traded, in TakePublic and by email, and reminds them once a business day later.
Yes, report the trade opens Report a trade with the security, the direction, the approved shares and a day inside the approval filled in, and sends the trade with the broker confirmation to the company's Needs review queue. A company on Monitor takes this report too: it files the Form 4 outside TakePublic, and recording the trade tracks its due date without drafting it.
Yes, report the trade waits on the insider's EDGAR codes like the request did.
No trade records the answer, and the approval reads Expired unused. It stays open whatever the codes: it answers the company. The approvers see the answer on the request.
The email never carries the trade or the shares. An unanswered question adds nothing to the company's list of what needs it.
How it fills the checklist
When a trade is recorded for the insider and falls inside an approval (the same direction and security, dated from the approval's day through its last day, and shares within the amount approved, counting earlier trades), the Form 4 row's pre-clearance fills from the approval: the approver and the day they approved, with the approval as its source. The checklist's Pre-clearance row then passes.
A trade outside every approval leaves the row as before: Pre-clearance not recorded, until someone records it by hand.
A trade inside a blackout window that falls inside an approval carrying a blackout override takes that override as its own, with the approval as its source; no second reason is asked for. A trade in a blackout that no such approval covers still needs a company admin's override on the transaction.
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TakePublic is a technology platform, not a law firm, broker-dealer, or auditor. Forms 3, 4 and 5 prepared in TakePublic file only after the reviewer the company designates, such as its securities counsel, signs off; any other filing prepared in TakePublic files only after a licensed securities attorney signs off.