The Securities Commission has decided to revoke a previously granted exemption from insider reporting requirements for certain insiders of an issuer under an automatic securities disposition plan (ASDP). This exemption had allowed insiders to report trades on an annual basis instead of within 5 days of the trade.
The revocation follows a review of ASDPs and the publication of CSA Staff Notice 55-317, which provides guidance on the use of ASDPs aimed at ensuring good corporate governance and transparency. The notice indicated that CSA staff would be unlikely to recommend reporting relief for trades under ASDPs to promote transparency.
The Commission determined that the previously granted relief was inconsistent with the principles outlined in the CSA Staff Notice. The decision to revoke the relief was made in the interest of maintaining public confidence in the fairness of capital markets.
The relevant laws and regulations include Section 171 of the Securities Act, Section 3.3 of National Instrument 55-104 Insider Reporting Requirements and Exemptions, and the process outlined in National Policy 11-203 for Exemptive Relief Applications in Multiple Jurisdictions. The British Columbia Securities Commission acted as the principal regulator, and the decision also represents the decision of the securities regulatory authority in Ontario. The revocation is not considered prejudicial to the public interest.