SEC Rule 10b-18 provides a “safe harbor” for affiliated purchasers when these executives repurchase shares of their company’s stock.
By working with the EFS team and your Financial Advisor, you can utilize this rule to:
- Take advantage of bullish sentiments on your company stock
- Meet affiliated retention requirements
- Increase ownership in company stock
- Protect yourself against market manipulation charges Coupled with a 10b5-1 preset diversification strategy you are also afforded an affirmative defense against insider trading liabilities.
Our goal is to provide you with guidance, know-how and experience so you can manage your equity compensation while meeting your overall portfolio objectives.
For more information about Morgan Stanley’s Executive Financial Services, please contact your Financial Advisor or the EFS team at (732) 974-5006.
Morgan Stanley Smith Barney LLC, member SIPC (“MSSB”) is a registered Broker/Dealer, not a bank. Where appropriate, MSSB has entered into arrangements with banks and other third parties to assist in offering certain banking-related products and services. Banking and credit products and services are provided by Morgan Stanley Private Bank, National Association or Morgan Stanley Bank, N.A. (the “Banks”). The Banks and MSSB are affiliates. Investment products and services are offered through MSSB. Unless specifically disclosed in writing, investments and services offered through MSSB are not insured by the FDIC, are not deposits or other obligations of, or guaranteed by, the Banks and involve investment risks, including possible loss of principal amount invested. Securities-based Lending Risks: Borrowing against securities may not be suitable for ever yone. You should be aware that securities-based loans involve a high degree of risk and that market conditions can magnify any potential for loss. Most importantly, you need to understand that: (1) Sufficient collateral must be maintained to suppor t your loan(s) and to take future advances; (2) You may have to deposit additional cash or eligible securities on shor t notice; (3) Some or all of your securities may be sold without prior notice in order to maintain account equity at required collateral maintenance levels. You will not be entitled to choose the securities that will be sold. These actions may interrupt your long-term investment strategy and may result in adverse tax consequences or in additional fees being assessed; (4) Morgan Stanley Bank, N.A., Morgan Stanley Private Bank, National Association, or MSSB (collectively referred to as “Morgan Stanley” ) reser ves the right not to fund any advance request due to insufficient collateral or for any other reason except for any por tion of a securities-based loan that is identified as a committed facility; (5) Morgan Stanley reserves the right to increase your collateral maintenance requirements at any time without notice; and (6) Morgan Stanley reserves the right to call your securities-based loan at any time and for any reason.
Tailored Lending is a loan/line of credit product provided by Morgan Stanley Private Bank, National Association, an affiliate of MSSB. A Tailored Lending credit facility may be a demand or committed loan/line of credit. All Tailored Lending loans/lines of credit are subject to the under writing standards and independent approval of Morgan Stanley Private Bank, National Association. Tailored Lending loans/lines of credit may not be available in all locations. Rates, terms, and programs are subject to change without notice. The ongoing availability of a secured Tailored Lending loan/line of credit is contingent, among other things, on the client maintaining sufficient eligible collateral. Other restrictions may apply. The proceeds of a Tailored Lending loan/line of credit (including draws and other advances) may not be used to purchase, trade, or carry margin stock; repay margin debt that was used to purchase, trade or carry margin stock; and cannot be deposited into a MSSB or other brokerage account.
Portfolio Loan Account (“PLA”) is a securities based loan/line of credit product offered by Morgan Stanley Bank, N.A., an affiliate of MSSB. A PLA credit facility is a demand loan/line of credit. All PLA loans/lines of credit are subject to the underwriting standards and independent approval of Morgan Stanley Bank, N.A. PLA loans/lines of credit may not be available in all locations. Rates, terms, and conditions are subject to change without notice. This document should not be construed as a commitment to lend. To be eligible for a PLA loan/line of credit, you must have a brokerage account at MSSB, which shall serve as collateral for the PLA. The ongoing availability of the PLA is contingent, among other things, on you maintaining sufficient eligible collateral. Other restrictions may apply. The proceeds from a PLA loan/line of credit (including draws and other advances) may not be used to purchase, trade, or carry margin stock; repay margin debt that was used to purchase, trade or carry margin stock; and cannot be deposited into an MSSB or other brokerage account. Morgan Stanley Bank, N.A. and Morgan Stanley Private Bank, National Association are members FDIC that are primarily regulated by the Office of the Comptroller of the Currency.
Express Credit Line is offered through MSSB. All credit facilities are subject to the underwriting standards and independent approval of MSSB. Funds that are drawn cannot be used to purchase, carry or trade in securities, including, without limitation, to repay margin debt, and cannot be deposited into a MSSB or other brokerage account.
Margin Loans are investment products offered through MSSB. The Express Credit Line account and Margin Loan are securities-based loans, which can be risky and are not suitable for all investors.
The contents of this document should not be construed as a commitment to lend. Please contact your Financial Advisor for more details. The outcome described within this brochure may not be attainable for all applicants. Issues relating to an applicant’s financial resources, creditworthiness, financial condition, or collateral value may affect the loan process, as well as an applicant’s eligibility for a loan/line of credit. A diversification strategy does not assure a profit or protect against loss. MSSB, its affiliates, employees and Financial Advisors and Private Wealth Managers are not in the business of providing tax or legal advice, and these materials and any statements contained herein should not be construed as tax or legal advice. This material was not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer under U.S. federal tax laws. Individuals should consult their personal tax advisor or attorney for matters involving taxation and tax planning and their attorney for matters involving personal trusts and estate planning.
Preset Diversification Program is a registered Trademark of MSSB, protected in the United States and other countries.