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Many employees of public companies have trading restrictions to trade their employer's stock because they have inside knowledge. For simplicity let's assume I'm an Apple employee and only allowed to trade in the month after a quarterly report has come out.

I also have investments (e.g. 401k, IRA) in various mutual funds and ETF, some of which also hold and trade Apple stock. When I buy/sell any of these funds or the funds themselves buy/sell Apple stock, I'm technically trading Apple stock outside the legal trading window. Is this a violation of SEC rules?

I'm guessing it's fine, since the Apple portion of my direct or indirect trades is heavily diluted by the other holdings of the ETF but I would like to know :

  1. If you are legally restricted by trading a specific stock, can you still buy, sell, or own mutual funds or ETFs that trade/hold this specific stock ?
  2. If the answer to 1) is "mostly yes", what are some specific circumstances or trigger points that would make it a "no"?
  3. If the answer is "no", what is the expectation for Apple employees to manage their investments? Finding funds or ETFs that don't hold any Apple is kind of difficult :-)

@mods: If this is a better fit for http://law.stackexchange.com/ feel free to move it or I can move it myself. Thanks !

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    I think this is a duplicate - didn't realize I was gold-badge in united-states so didn't realize it would one-button close, but if you think it's not I can reopen if your question is substantially different.
    – Joe
    May 27 at 0:39
  • @Joe thanks for looking: I don't think this is a dupe. The potential duplicate asked about a very specific case, while my question is way broader: if you are restricted from trading Apple stock are you also restricted from trading an S&P500 fund ? I feel the answer is no, since otherwise it would be very hard for Apple to put a 401k plan together but I like to confirm and understand if they are limits or exceptions to that
    – Hilmar
    May 27 at 10:26
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    Okay, I'll reopen (but I think the answer from this question are still relevant).
    – Joe
    May 27 at 14:58

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