An Open-Market Transaction is an important part of the stock market and a necessary step for insiders to buy or sell restricted securities. It requires filing the appropriate documentation with the Securities and Exchange Commission (SEC) before any order can be placed. This ensures that all transactions are conducted legally, fairly, and in compliance with SEC regulations.The purpose of an open-market transaction is to allow insiders—such as company officers or major shareholders—to purchase shares without having to go through a broker or other intermediary. By eliminating middlemen from these transactions, companies save money on fees while ensuring that their trades are executed quickly and accurately at fair prices in accordance with SEC rules.Open-market transactions also provide transparency into insider trading activity by allowing investors to easily track when certain individuals have bought or sold stocks within their own company's stock portfolio. In addition, this type of trading helps ensure that executives comply with corporate governance standards set by the SEC so they cannot use inside information for personal gain rather than making decisions based on what’s best for shareholders as a whole.
