search results for: Do I have to report trades before becoming a director?


National Instrument 55-104 Insider Reporting Requirements and Exemptions
Part 6 Exemption for Certain Issuer Grants
Section 6.4

Alternative reporting requirement

(1) A director or officer is exempt under section 6.2 from the insider reporting requirement if the insider files an insider report within the time period described in subsection (2) disclosing, on a transaction-by-transaction basis or in acceptable summary form, each acquisition and each specified disposition of a security under a compensation arrangement that has not previously been disclosed by or on behalf of the director or officer.

(2) The deadline for filing the insider report under subsection (1) is

(a) in the case of any security acquired under the compensation arrangement that has been disposed of or transferred, other than a security that has been disposed of or transferred as part of a specified disposition of a security, within five days of the disposition or transfer; and

(b) in the case of any security acquired under the compensation arrangement during a calendar year that has not been disposed of or transferred, and any security that has been disposed of or transferred as part of a specified disposition of a security, on or before March 31 of the next calendar year.

(3) Subsection (1) does not apply to a director or officer if, at the time the insider report described in subsection (1) is due,

(a) the director or officer is not a reporting insider; or

(b) the director or officer is exempt from the insider reporting requirement.


National Instrument 55-104 Insider Reporting Requirements and Exemptions
Part 5 Exemption for Automatic Securities Purchase Plans
Section 5.4

Alternative reporting requirement

(1) A director or officer is exempt under section 5.2 from the insider reporting requirement if the insider files an insider report within the time period described in subsection (2) disclosing, on a transaction-by-transaction basis or in acceptable summary form, each acquisition and each specified disposition of a security under an automatic securities purchase plan that has not previously been disclosed by or on behalf of the director or officer.

(2) The Deadline for filing the insider report under subsection (1) is,

(a) in the case of any securities acquired under the automatic securities purchase plan that have been disposed of or transferred, other than securities that have been disposed of or transferred as part of a specified disposition of securities, within five days of the disposition or transfer; and

(b) in the case of any securities acquired under the automatic securities purchase plan during a calendar year that have not been disposed of or transferred, and any securities that have been disposed of or transferred as part of a specified disposition of securities, on or before March 31 of the next calendar year.

(3) Subsection (1) does not apply to a director or officer if, at the time the insider report described in subsection (1) is due,

(a) the director or officer is not a reporting insider; or

(b) the director or officer is exempt from the insider reporting requirement.


National Instrument 55-104 Insider Reporting Requirements and Exemptions
Part 6 Exemption for Certain Issuer Grants
Section 6.2

Reporting exemption

The insider reporting requirement does not apply to a director or officer for the acquisition of a security of the reporting issuer, or a specified disposition of a security of the reporting issuer, under a compensation arrangement established by the reporting issuer or by a subsidiary of the reporting issuer, if

(a) the reporting issuer has previously disclosed the existence and material terms of the compensation arrangement in an information circular or other public document filed on SEDAR;

(b) in the case of an acquisition of securities, the reporting issuer has previously filed in respect of the acquisition an issuer grant report on SEDI in accordance with section 6.3; and

(c) the director or officer complies with the alternative reporting requirement in section 6.4.


National Instrument 55-104 Insider Reporting Requirements and Exemptions
Part 3 Primary Insider Reporting Requirement
Section 3.5

Report by certain designated insiders for certain historical transactions

A CEO, CFO, COO or director of an issuer (the first issuer) who is designated or determined to be an insider of another issuer (the second issuer) under subsection 1.2(2) or 1.2(3) must file, within 10 days of being designated or determined to be an insider of the second issuer, the insider reports that a reporting insider of the second issuer would have been required to file under Part 3 and Part 4 for all transactions involving securities of the second issuer or related financial instruments involving securities of the second issuer, that occurred in the previous six months or for such shorter period that the individual was a CEO, CFO, COO or director of the first issuer.


Exemptive Relief Orders

National Instrument 55-104 Insider Reporting Requirements and Exemptions
Part 3 Primary Insider Reporting Requirement
Section 3.2

Initial report

A reporting insider must file an insider report in respect of a reporting issuer, within 10 days of becoming a reporting insider, disclosing the reporting insider’s

(a) beneficial ownership of, or control or direction over, whether direct or indirect, securities of the reporting issuer, and

(b) interest in, or right or obligation associated with, a related financial instrument involving a security of the reporting issuer.


Exemptive Relief Orders

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI
4 Insider Information
4.3 Insider Report
Section 4.3.2

When Do I File My Insider Report On SEDI?

If you already own or control, directly or indirectly, securities or related financial instruments relating to a SEDI issuer, you need to file your insider profile and opening balance reports within 10 calendar days of becoming a reporting insider. You need to file a report of any changes to your holdings within five calendar days [FN 10] of the change.

Note that if you enter into a reportable transaction within 10 calendar days of becoming a reporting insider, this may have the effect of accelerating your requirement to file an insider profile and opening balance report, since you need to take these steps before you can file a report about the reportable transaction. See the example in question 4.2.2. Certain exemptions may allow you to report changes in your holdings later, for example, changes resulting from an automatic share purchase plan. See question 4.5.2.

FN 10 Prior to November 1, 2010, within 10 calendar days.


CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI
4 Insider Information
4.2 Insider Profile
Section 4.2.2

When Do I File An Insider Profile?

You need to file your insider profile and opening balance reports within 10 calendar days of becoming a reporting insider if you beneficially own, or have or share direct or indirect control or direction over, securities or related financial instruments of the issuer of which you are a reporting insider.

Note that if you enter into a reportable transaction within 10 calendar days of becoming a reporting insider, this may have the effect of accelerating your requirement to file an insider profile and opening balance report, since you need to take these steps before you can file a report about the reportable transaction. See example below.

If you are a reporting insider or otherwise required by securities legislation to file insider reports in respect of a SEDI issuer, but do not own or control securities or related financial instruments relating to that SEDI issuer, you do not need to file an insider profile until an insider report is required. However, if you wait until you are required to file an insider report, you must file your insider profile at the same time.

Alternatively, you can set up and file your insider profile with a zero opening balance report (for each security, ownership type and registered holder combination) after you or your agent are registered as a SEDI user, but before any of your insider reports are due.

Example: New Reporting Insider

Question

1. On November 1, 2010, I became a director of ABC Inc. and therefore a “reporting insider” for this issuer under NI 55-104.

2. I understand that, in accordance with section 3.2 of NI 55-104, I am required to file my initial report within 10 calendar days of becoming a reporting insider. Accordingly, my initial report would appear to be due on November 10, 2010.

3. On November 3, 2010, I purchased 100 common shares of ABC Inc. in a market transaction.

4. According to section 3.3 of NI 55-104, I am required to file an insider report within five calendar days of any change in my ownership or control of securities or interests in or rights or obligations associated with a related financial instrument. Accordingly, my insider report for this transaction would appear to be due on November 8, 2010.

5. What is my deadline for the initial report? What is my deadline for reporting the purchase of 100 shares?

Response

1. The deadline for filing the initial report would ordinarily be November 10, 2010. However, as a result of the purchase of 100 shares on November 3, 2010, the deadline for filing the initial report has effectively been accelerated to November 8, 2010. This is because, in order to be able to file an insider report about the purchase of 100 shares by the required due date of November 8, 2010, it will first be necessary to file the initial report.

2. The deadline for filing the report about the purchase of 100 shares is, in this example, November 8, 2010.


National Instrument 55-104 Insider Reporting Requirements and Exemptions
Part 5 Exemption for Automatic Securities Purchase Plans
Section 5.2

Reporting exemption

(1) The insider reporting requirement does not apply to a director or officer for an acquisition or disposition of securities described in subsection (2) if the director or officer complies with the alternative reporting requirement in section 5.4.

(2) The exemption in subsection (1) applies to

(a) an acquisition of securities of the reporting issuer under an automatic securities purchase plan, other than an acquisition of securities under a lump-sum provision of the plan; or

(b) a specified disposition of securities of the reporting issuer under an automatic securities purchase plan.


Ontario Securities Act
Part XXI Insider Trading and Self-Dealing
Section 107

Insider Reporting

(1) Within 10 days of becoming an insider or within such other time period as may be prescribed, a person or company who becomes an insider of a reporting issuer, other than a mutual fund, shall file a report disclosing, in the prescribed manner and form, any direct or indirect beneficial ownership of or control or direction over securities of the reporting issuer and any interest in, or right or obligation associated with, a related financial instrument and the insider shall make such other disclosure as may be required by the regulations. 

(2) Within 10 days, or within such other time period as may be prescribed, of any change in the direct or indirect beneficial ownership of, or control or direction over, securities of the reporting issuer or any interest in, or right or obligation associated with, a related financial instrument, an insider of a reporting issuer, other than a mutual fund, shall file a report disclosing, in the prescribed manner and form, such change and the insider shall make such other disclosure as may be required by the regulations. 


Exemptive Relief Orders

National Instrument 55-104 Insider Reporting Requirements and Exemptions
Part 9 General Exemptions
Section 9.3

Reporting exemption (certain insiders of investment issuers)

The insider reporting requirement does not apply to a director or officer of a significant shareholder, or a director or officer of a subsidiary of a significant shareholder, in respect of securities of an investment issuer or a related financial instrument involving a security of the investment issuer if the director or officer

(a) does not in the ordinary course receive or have access to information as to material facts or material changes concerning the investment issuer before the material facts or material changes are generally disclosed; and

(b) is not a reporting insider of the investment issuer in any capacity other than as a director or officer of the significant shareholder or a subsidiary of the significant shareholder.


CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI
4 Insider Information
4.3 Insider Report
Section 4.3.4

What Type Of Report Do I File When I First Become A Reporting Insider Of A SEDI Issuer And Own Securities Or Related Financial Instruments Of That Issuer?

What type of report do I file when I first become a reporting insider of a SEDI issuer and own securities or related financial instruments of that issuer? You need to file an initial opening balance report within 10 calendar days of the date you first become a reporting insider of a reporting issuer if you have reportable securities or related financial instruments on that date. In your report, you must disclose your beneficial ownership of, or control or direction over (whether direct or indirect), securities and interests in or rights or obligations associated with related financial instruments of that issuer.

You will initially need to file (create) an insider profile in the system before you can file this opening balance report. Once your insider profile is filed, you can then file your opening balance report, disclosing all your current holdings in the securities and related financial instruments of the SEDI issuer. For each particular type of security and related financial instrument, the system will ask you to input an opening balance.

If you do not have any interests in any securities or related financial instruments of the reporting issuer when you first become a reporting insider, you do not need to file an insider profile or an initial opening balance. You may choose to set up an insider profile and file a zero balance opening balance report. If you choose to file a zero opening balance report, all subsequent reports, including your first insider report of a transaction in the securities or related financial instruments of the issuer must be filed within five calendar days [FN 11].

Otherwise, the first insider report you will file will be when you have your first transaction in securities or related financial instruments of the reporting issuer. At this time you will need to set up an insider profile (if you have not already done so) and file the initial report within five calendar days after you made this first transaction. All subsequent reports must also be filed within five calendar days.

Note that if you enter into a reportable transaction within 10 calendar days of becoming a reporting insider, this may have the effect of accelerating your requirement to file an insider profile and opening balance report, since you need to take these steps before you can file a report about the reportable transaction. See the example in question 4.2.2.

FN 11 Prior to November 1, 2010, within 10 calendar days.


CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI
4 Insider Information
4.1 General
Section 4.1.10

Do I Need To Report For a Period Before I Was a Director, CEO, CFO or COO of the Relevant Reporting Issuer?

Yes. In certain situations, the “look-back” rules in subsections 1.2(2) and 1.2(3) and section 3.5 of NI 55-104 may require you to file an insider report on SEDI in relation to certain historical transactions.

Issuer as insider of reporting issuer – If an issuer (the first issuer) becomes an insider of a reporting issuer (the second issuer), the CEO, CFO, COO and every director of the first issuer must file insider reports in respect of transactions relating to securities and related financial instruments of the second issuer that occurred in the previous six months or for such shorter period that the individual was a CEO, CFO, COO or director of the first issuer.

Reporting issuer as insider of other issuer – If a reporting issuer (the first issuer) becomes an insider of another issuer (the second issuer), the CEO, CFO, COO and every director of the second issuer must file insider reports in respect of transactions relating to securities and related financial instruments of the first issuer that occurred in the previous six months or for such shorter period that the individual was a CEO, CFO, COO or director of the second issuer.

Example – If a reporting issuer (A Co) owns 5% of the common shares of another reporting issuer (B Co), and then acquires, on June 30, 2011, an additional 25% of B Co’s common shares through an exempt take-over bid, A Co will have become an “insider” (as defined in securities legislation) of B Co on June 30, 2011 because A Co has become a “significant shareholder” (as defined in NI 55-104) of B Co as of that date.

As a result of the special designation/determination provisions in subsections 1.2(2) and (3) of NI 55-104, the CEO, CFO, COO and every director of A Co are designated or determined to be insiders of B Co and the CEO, CFO, COO and every director of B Co are designated or determined to be insiders of A Co. (Section 1.2 of NI 55-104 uses the terms “designated” and “determined” to reflect the different terms used in securities legislation across Canada. They mean the same thing.)

Note that the CEO, CFO, COO and every director of A Co will also be insiders and reporting insiders of B Co under the ordinary definition of “insider” and “reporting insider”. However, the CEO, CFO, COO and every director of B Co would not normally be insiders and reporting insiders of A Co (unless they were insiders and reporting insiders in another capacity) since B Co would not be a “subsidiary” of A Co.

There are special reporting rules that apply to the period that precedes a take-over bid or similar acquisition. The purpose of these provisions is to address concerns over directors and officers of a company proposing to acquire a significant interest in another company by unlawfully “frontrunning” the acquisition through personal purchases of shares of the second company.

Section 3.5 of NI 55-104 requires the CEO, CFO, COO and every director of A Co to file insider reports in respect of transactions relating to securities and related financial instruments of B Co that occurred in the previous six months or for such shorter period that the individual was a CEO, CFO, COO or director of A Co. Similarly, the CEO, CFO, COO and every director of B Co must file insider reports in respect of transactions relating to securities and related financial instruments of A Co that occurred in the previous six months or for such shorter period that the individual was a CEO, CFO, COO or director of B Co. When filing these transactions, we recommend that you select relationship code 8 on your insider profile.


CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI
4 Insider Information
4.3 Insider Report
Section 4.3.5

What Type Of Report Do I File After I Have Made My Initial SEDI Report?

After you have made your initial SEDI report, you need to file an insider report within five calendar days [FN 12] of the date on which any change in your holdings of the reporting issuer occurs.

You need to file an insider report on SEDI, disclosing your transactions in those securities that have resulted in a change in your beneficial ownership of, or control or direction over, them. You do not need to report closing balances if the balances did not change and you have already reported them. SEDI calculates and maintains a record of all these holdings as reported previously.

FN 12 Prior to November 1, 2010, within 10 calendar days.


National Instrument 55-104 Insider Reporting Requirements and Exemptions
Part 3 Primary Insider Reporting Requirement
Section 3.3

Subsequent report

A reporting insider must within five days of any of the following changes file an insider report in respect of a reporting issuer disclosing a change in the reporting insider’s

(a) beneficial ownership of, or control or direction over, whether direct or indirect, securities of the reporting issuer, or

(b) interest in, or right or obligation associated with, a related financial instrument involving a security of the reporting issuer.


Exemptive Relief Orders

National Instrument 55-104 Insider Reporting Requirements and Exemptions
Part 4 Supplemental Insider Reporting Requirement
Section 4.2

Report of prior agreements, arrangements or understandings

A reporting insider must, within 10 days of becoming a reporting insider of a reporting issuer, file an insider report in accordance with section 4.3 in respect of the reporting issuer if

(a) the reporting insider, prior to the date the reporting insider most recently became a reporting insider, entered into an agreement, arrangement or understanding in respect of which the reporting insider would have been required to file an insider report under section 4.1 if the agreement, arrangement or understanding had been entered into on or after the date the reporting insider most recently became a reporting insider, and

(b) the agreement, arrangement or understanding remains in effect on or after the date the reporting insider most recently became a reporting insider.


National Instrument 55-104 Insider Reporting Requirements and Exemptions
Part 8 Exemption for Certain Issuer Events
Section 8.2

Reporting requirement

A reporting insider who relies on the exemption in section 8.1 in respect of a reporting issuer must file an insider report, disclosing all changes in beneficial ownership of, or control or direction over, whether direct or indirect, a security of the reporting issuer as a result of an issuer event if those changes have not previously been reported by or on behalf of the insider, within the time required by securities legislation for the insider to report any other subsequent change in beneficial ownership of, or control or direction over, whether direct or indirect, a security of the reporting issuer.


Companion Policy to NI 81-106 Investment Fund Continuous Disclosure
Part 7 Material Change
Section 7.2

Confidential Material Change Report Report

The CSA are of the view that in order for an investment fund to file a confidential material change report under Section 11.2 of the Instrument, the investment fund or its manager should advise insiders of the prohibition against trading during the filing period of a confidential material change report and must also take steps to monitor trading activity.


CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI
4 Insider Information
4.2 Insider Profile
Section 4.2.10

If I Cease To Be A Reporting Insider, But Am Still An Insider, How Do I Update My Insider Profile To Reflect The Change?

Once you have ceased to be a reporting insider you are no longer required to report your insider transactions on SEDI. There are no requirements to update your insider profile to reflect the change. However, we recommend that you add a public remark to your last filed transaction advising that you are no longer required to report and will cease reporting your transactions on SEDI effective the date of the change in your status.


CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI
2 Registration
2.2 Agents
Section 2.2.8

Do I, As The Agent For A Reporting Insider, Have To File A Power Of Attorney For Insider Reports Filed On SEDI?

No. However, if you, as an agent, are filing an insider report in paper format in certain circumstances (see question 4.3.7), you still need to file with the relevant securities regulatory authority a power of attorney. However, an agent does not need to file a power of attorney for an insider report of an individual that is filed in paper format under the temporary hardship exemption.


National Instrument 55-104 Insider Reporting Requirements and Exemptions
Part 6 Exemption for Certain Issuer Grants
Section 6.1

Interpretation

(1) In this Part, a reference to a director or officer means a director or officer who is

(a) a director or officer of a reporting issuer and a reporting insider of the reporting issuer, or

(b) a director or officer of a subsidiary of a reporting issuer and a reporting insider of the reporting issuer.

(2) In this Part, a reference to a security of a reporting issuer includes a related financial instrument involving a security of the reporting issuer.

(3) In this Part, a disposition or transfer of a security acquired under a compensation arrangement is a specified disposition of a security if

(a) the disposition or transfer is incidental to the operation of the compensation arrangement and does not involve a discrete investment decision by the director or officer; or

(b) the disposition or transfer is made to satisfy a tax withholding obligation arising from the distribution of a security under the compensation arrangement and either

(i) the director or officer has elected that the tax withholding obligation will be satisfied through a disposition of securities, has communicated this election to the reporting issuer or the administrator of the compensation arrangement at least 30 days before the disposition and this election is irrevocable as of the 30th day before the disposition; or

(ii) the director or officer has not communicated an election to the reporting issuer or the administrator of the compensation arrangement and, in accordance with the terms of the arrangement, the reporting issuer or the administrator is required to sell securities automatically to satisfy the tax withholding obligation.


National Instrument 62-103 The Early Warning System and Related Takeover Bid and Insider Reporting Issues
Part 8 Relief For Pledgees
Section 8.3

Corresponding Insider Reporting Relief

If a person or company is exempt under section 8.1 or 8.2 from the insider reporting requirement for those securities of a reporting issuer that it controls as pledgee, every director or senior officer of the person or company who is an insider of the reporting issuer solely as a result of being a director or senior officer of the person or company that is an insider of the reporting issuer is exempt from the insider reporting requirement for those securities.


National Instrument 51-102 Continuous Disclosure Obligations
Part 5 Management's Discussion and Analysis
Section 5.5

Approval of MD&A

(1) The annual MD&A that a reporting issuer is required to file under this Part must be approved by the board of directors before being filed.

(2) The interim MD&A that a reporting issuer is required to file under this Part must be approved by the board of directors before being filed.

(3) In fulfilling the requirement in subsection (2), the board of directors may delegate the approval of the interim MD&A required to be filed under this Part to the audit committee of the board of directors.


CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI
4 Insider Information
4.1 General
Section 4.1.4

When Do I Need To File My Insider Reports On SEDI?

You need to file your insider reports on SEDI as follows:

  • if you beneficially own (or have, or share, direct or indirect control or direction over) securities or related financial instruments of a SEDI issuer, within 10 calendar days of first becoming an insider required by securities legislation to file insider reports,
  • if you are already a reporting insider of a SEDI issuer, within five calendar days [FN 9] of:
    • the date of any change in your ownership of, or control or direction over, securities of the SEDI issuer; and
    • the date of any change in your interest in, or right or obligation associated with, a related financial instrument involving a security of the SEDI issuer.

 

SEDI issuers are reporting issuers, other than mutual funds, that file disclosure documents on SEDAR. You can check the SEDAR website, www.sedar.com, to find out whether your company files disclosure documents on SEDAR.

FN 9 Prior to November 1, 2010, within 10 calendar days.


National Instrument 62-103 The Early Warning System and Related Takeover Bid and Insider Reporting Issues
Part 5 Aggregation Relief
Section 5.4

No Requirement to Satisfy Insider Reporting Requirement

If an eligible institutional investor, or an affiliate or associate of an eligible institutional investor, is relying on this Part so that it is not subject to the insider reporting requirement for a reporting issuer, then every director or senior officer of the eligible institutional investor, or of the affiliate or associate of an eligible institutional investor, who is an insider of the reporting issuer solely as a result of being a director or senior officer of the eligible institutional investor, or the affiliate or associate of an eligible institutional investor, is not subject to the insider reporting requirement for the reporting issuer.


CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI
4 Insider Information
4.3 Insider Report
Section 4.3.18

Do I Have To Report All My Holdings Of Securities And Related Financial Instruments Of The SEDI Issuer Or Just The Securities And Related Financial Instruments In Respect Of Which My Ownership Or Control Has Changed?

The first time you file on SEDI, you must report all of your holdings of securities and related financial instruments of the SEDI issuer. Subsequently, you only need to report changes in interests in, or new interests in securities and related financial instruments, or changes in control or direction over, securities and related financial instruments of the SEDI issuer.


National Instrument 55-104 Insider Reporting Requirements and Exemptions
Part 5 Exemption for Automatic Securities Purchase Plans
Section 5.1

Interpretation

(1) In this Part, a reference to a director or officer means a director or officer who is

(a) a director or officer of a reporting issuer and a reporting insider of the reporting issuer, or

(b) a director or officer of a subsidiary of a reporting issuer and a reporting insider of the reporting issuer.

(2) In this Part, a reference to a security of a reporting issuer includes a related financial instrument involving a security of the reporting issuer.

(3) In this Part, a disposition or transfer of securities acquired under an automatic securities purchase plan is a specified disposition of securities if

(a) the disposition or transfer is incidental to the operation of the automatic securities purchase plan and does not involve a discrete investment decision by the director or officer; or

(b) the disposition or transfer is made to satisfy a tax withholding obligation arising from the distribution of securities under the automatic securities purchase plan and either

(i) the director or officer has elected that the tax withholding obligation will be satisfied through a disposition of securities, has communicated this election to the reporting issuer or the plan administrator at least 30 days before the disposition and this election is irrevocable as of the 30th day before the disposition; or

(ii) the director or officer has not communicated an election to the reporting issuer or the plan administrator and, in accordance with the terms of the plan, the reporting issuer or the plan administrator is required to sell securities automatically to satisfy the tax withholding obligation.


Companion Policy to NI 55-104 Insider Reporting Requirements and Exemptions
Part 10 Contravention of Insider Reporting Requirements
Section 10.1

Contravention of insider reporting requirements

(1) It is an offence to fail to file an insider report in accordance with the filing deadlines prescribed by the Instrument or to submit information in an insider report that, in a material respect and at the time and in the light of the circumstances in which it is submitted, is misleading or untrue.

(2) A failure to file an insider report in a timely manner or the filing of an insider report that contains information that is materially misleading may result in one or more of the following

• the imposition of a late filing fee;

• the reporting insider being identified as a late filer on a public database of late filers maintained by certain securities regulators;

• the issuance of a cease trade order that prohibits the reporting insider from directly or indirectly trading in or acquiring securities or related financial instruments of the applicable reporting issuer or any reporting issuer until the failure to file is corrected or a specified period of time has elapsed; or

• in appropriate circumstances, enforcement proceedings.

(3) Members of the CSA may also consider information relating to wilful or repeated non-compliance by directors and executive officers of a reporting issuer with their insider reporting obligations in the context of a prospectus review or continuous disclosure review, since this may raise questions relating to the integrity of the insiders and the adequacy of the issuer’s policies and procedures relating to insider reporting and insider trading.


CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI
4 Insider Information
4.3 Insider Report
Section 4.3.19

What Do I Do If I Have Been Previously Filing Insider Reports But Am No Longer Required To?

You should add a comment in the “Remarks” field explaining that you are no longer a reporting insider or are exempt. You can do this either on your next transaction to be filed on SEDI or by amending your last report already filed on SEDI. A member of the public viewing your insider reports on SEDI will then know why you have ceased reporting.


Companion Policy to NI 55-104 Insider Reporting Requirements and Exemptions
Part 9 Exemptions
Section 9.3

Reporting Exemption (certain directors and officers of insider issuers)

The reference to “material facts or material changes concerning the investment issuer” in section 9.3 of the Instrument is intended to include information that originates at the insider issuer level but which concerns or is otherwise relevant to the investment issuer. For example, in the case of an issuer that has a subsidiary investment issuer, a decision at the parent issuer level that the subsidiary investment issuer will commence or discontinue a line of business would generally represent a “material fact or material change concerning the investment issuer”. Similarly, a decision at the parent issuer level that the parent issuer will seek to sell its holding in the subsidiary investment issuer would also generally represent a “material fact or material change concerning the investment issuer.” Accordingly, a director or officer of the parent issuer who routinely had access to such information concerning the investment issuer would not be entitled to rely on
the exemption for trades in securities of the investment issuer.


CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI
2 Registration
2.2 Agents
Section 2.2.4

Can I register as an insider, an issuer representative and an agent?

Generally, yes. However, you must select the category that best suits your activity. For example, if you are a reporting insider and you will only be filing insider reports for yourself, you should register as an “insider”.

If you fulfill multiple roles, you must register as an agent. For example, you would register as an agent if you will be filing:

  • insider information for one or more reporting insiders other than yourself
  • issuer information for more than one issuer
  • insider and issuer information for yourself, several insiders and an issuer

Please see questions 2.1.4 to 2.1.7.


CSA Staff Notice 55-315 Frequently Asked Questions about National Instrument 55-104 Insider Reporting Requirements and Exemptions
Question 1

Do Existing Insiders Have To File A New Initial Report Within 10 Days Of April 30, 2010?

Background

1. ABC Inc. (the Issuer) is a reporting issuer in all provinces and territories.

2. On January 1, 2009, I became the CEO of the Issuer. I am therefore an “insider” of the Issuer under Canadian securities legislation. I have filed all required insider reports since becoming CEO.

3. On April 30, 2010, NI 55-104 came into force.

4. NI 55-104 contains a new definition of “reporting insider”. The definition of “reporting insider” includes a CEO of a reporting issuer. I am therefore a “reporting insider” for this Issuer under NI 55-104.

5. Section 3.2 of NI 55-104 states that a reporting insider must file an insider report in respect of a reporting issuer, “within 10 days of becoming a reporting insider”, disclosing certain prescribed information.

Question

1. Do I have to file a new initial report under section 3.2 within 10 days of April 30, 2010? (In other words, have I “become” a reporting insider as a result of NI 55-104 coming into force?) I do not otherwise have any transactions involving securities or related financial instruments to report.

Response

1. No, you do not have to file a new initial report. The term “reporting insider” is simply intended to refer to a defined class of insiders who have reporting obligations. A person is determined to be an insider by operation of the statutory definition of “insider”. A person is a reporting insider for the purposes of the insider reporting requirements in NI 55-104 if the person has a position or function, such as CEO or director, or has a particular type of relationship to a reporting issuer, described in the definition of “reporting insider”. We do not consider you to have “become” a reporting insider simply through the introduction of this term in NI 55-104.


National Instrument 55-104 Insider Reporting Requirements and Exemptions
Part 9 General Exemptions
Section 9.4

Reporting exemption (nil report)

The insider reporting requirement does not apply to a reporting insider if the reporting insider

(a) does not have any beneficial ownership of, or control or direction over, whether direct or indirect, a security of the issuer;

(b) does not have any interest in, or right or obligation associated with, a related financial instrument involving a security of the issuer;

(c) has not entered into any agreement, arrangement or understanding as described in section 4.1; and

(d) is not a significant shareholder based on post-conversion beneficial ownership.


National Instrument 51-102 Continuous Disclosure Obligations
Part 4 Financial Statements
Section 4.5

Approval of Financial Statements

(1) The annual financial statements a reporting issuer is required to file under section 4.1 must be approved by the board of directors before the statements are filed.

(2) The interim financial report a reporting issuer is required to file under section 4.3 must be approved by the board of directors before the report is filed.

(3) In fulfilling the requirement in subsection (2), the board of directors may delegate the approval of the interim financial report to the audit committee of the board of directors.


National Instrument 62-104 Takeover Bids and Issuer Bids
Part 5 Reports and Announcements Of Acquisitions
Section 5.3

Moratorium provisions

(1) During the period beginning on the occurrence of an event in respect of which a report is required to be filed under section 5.2 and ending on the expiry of the first business day following the date that the report is filed, an acquiror, or any person acting jointly or in concert with the acquiror, must not acquire or offer to acquire beneficial ownership of, or control or direction over, any securities of the class in respect of which the report is required to be filed or any securities convertible into securities of that class.

(2) Subsection (1) does not apply to an acquiror that has beneficial ownership of, or control or direction over, securities that, together with the acquiror’s securities of that class, constitute 20% or more of the outstanding securities of that class.


Exemptive Relief Orders

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI
2 Registration
2.1 General
Section 2.1.5

When Should I Register as an Insider?

If you are a reporting insider, you should register as an insider if you will be filing an insider profile and insider reports only for yourself and no one else.

If you are filing insider profiles and insider reports for one or more reporting insiders (other than yourself), or information for several issuers you should register as an agent (see question 2.1.7), and not as an insider.


National Instrument 55-104 Insider Reporting Requirements and Exemptions
Part 3 Primary Insider Reporting Requirement
Section 3.4

Reporting requirements in connection with convertible or exchangeable securities

For greater certainty, a reporting insider who exercises an option, warrant or other convertible or exchangeable security must file, within five days of the exercise, separate insider reports in accordance with section 3.3 disclosing the resulting change in the reporting insider’s beneficial ownership of, or control or direction over, whether direct or indirect, each of

(a) the option, warrant or other convertible or exchangeable security, and

(b) the common shares or other underlying securities.


Exemptive Relief Orders

CSA Staff Notice 55-312 Insider Reporting Guidelines for Certain Derivative Transactions (Equity Monetization)
Background
Section 2

How are these Transactions Reported in SEDI?

We have set out below a number of examples of arrangements and transactions involving derivatives together with examples of how to report these arrangements and transactions in SEDI.

The first example is considered in detail. The subsequent examples generally refer the reader back to the step-by-step approach taken in the first example, highlighting necessary changes.

The examples discussed in this notice have necessarily been simplified and are for illustrative purposes only. The examples assume the following set of facts:

ABC Inc. is a reporting issuer. John is a director of ABC Inc. and is therefore a reporting insider (as defined in NI 55-104) of ABC Inc. On March 1, 2010, John acquired 10 shares of ABC Inc. at a fair market value (FMV) price of $10 per share. On March 1, 2011, shares of ABC Inc. have a FMV of $100 per share. John does not wish to sell the shares, but is concerned that the shares might fall in value, and wishes to protect at least $80 of the gain (that is, to “lock in” the share price at at least $90).

The examples also assume that the following necessary preliminary steps have been taken:

  • ABC Inc. has completed an issuer profile supplement;
  • John has a valid SEDI user ID and password;
  • John has created his insider profile in SEDI and has his insider access key; and
  • John has previously added ABC Inc. to his insider profile.

For additional information about filing an insider report under SEDI, please refer to 55-102CP, SN 55-316 and the SEDI online help available on the SEDI website (www.sedi.ca).


National Instrument 62-104 Takeover Bids and Issuer Bids
Part 5 Reports and Announcements Of Acquisitions
Section 5.2

Early warning

(1) An acquiror who acquires beneficial ownership of, or control or direction over, voting or equity securities of any class of a reporting issuer, or securities convertible into voting or equity securities of any class of a reporting issuer, that, together with the acquiror’s securities of that class, constitute 10% or more of the outstanding securities of that class, must

(a) promptly, and, in any event, no later than the opening of trading on the business day following the acquisition, issue and file a news release containing the information required by section 3.1 of National Instrument 62-103 The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, and

(b) promptly, and, in any event, no later than 2 business days from the date of the acquisition, file a report containing the information required by section 3.1 of National Instrument 62-103 The Early Warning System and Related Take-Over Bid and Insider Reporting Issues.

(2) An acquiror who is required to make disclosure under subsection (1) must make further disclosure, in accordance with subsection (1), each time any of the following events occur:

(a) the acquiror or any person acting jointly or in concert with the acquiror, acquires or disposes beneficial ownership of, or acquires or ceases to have control or direction over, either of the following:

(i) securities in an amount equal to 2% or more of the outstanding securities of the class of securities that was the subject of the most recent report required to be filed by the acquiror under subsection (1) or under this subsection;

(ii) securities convertible into 2% or more of the outstanding securities referred to in subparagraph (i);

(b) there is a change in a material fact contained in the most recent report required to be filed under paragraph (1)(b) or under paragraph (a) of this subsection.

(3) An acquiror must issue and file a news release and file a report in accordance with subsection (1) if beneficial ownership of, or control or direction over, the outstanding securities of the class of securities that was the subject of the most recent report required to be filed by the acquiror under this section decreases to less than 10%.

(4) If an acquiror issues and files a news release and files a report under subsection (3), the requirements under subsection (2) do not apply unless subsection (1) applies in respect of a subsequent acquisition of beneficial ownership of, or control or direction over, voting or equity securities of any class of a reporting issuer, or securities convertible into voting or equity securities of any class of a reporting issuer, that, together with the acquiror’s securities of that class, constitute 10% or more of the outstanding securities of that class.


Exemptive Relief Orders

National Instrument 55-104 Insider Reporting Requirements and Exemptions
Part 1 Definitions and Interpretation
Section 1.2

Persons and companies designated or determined to be insiders for the purposes of this Instrument

(1) The following persons and companies are designated or determined to be insiders of an issuer:

(a) a significant shareholder of the issuer based on post-conversion beneficial ownership of the issuer’s securities;

(b) a management company that provides significant management or administrative services to the issuer or a major subsidiary of the issuer, and every director, officer and significant shareholder of the management company; and

(c) if the issuer is an income trust, every director, officer and significant shareholder of a principal operating entity of the issuer.

(2) Issuer as insider of reporting issuer – If an issuer (the first issuer) becomes an insider of a reporting issuer (the second issuer), the CEO, CFO, COO and every director of the first issuer are designated or determined to be an insider of the second issuer and must file insider reports in accordance with section 3.5 in respect of transactions relating to the second issuer that occurred in the previous six months or for such shorter period that the individual was a CEO, CFO, COO or director of the first issuer.

(3) Reporting issuer as insider of other issuer – If a reporting issuer (the first issuer) becomes an insider of another issuer (the second issuer), the CEO, CFO, COO and every director of the second issuer is designated or determined to be an insider of the first issuer and must file insider reports in accordance with section 3.5 in respect of transactions relating to the first issuer that occurred in the previous six months or for such shorter period that the individual was a CEO, CFO, COO or director of the second issuer.


CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI
4 Insider Information
4.2 Insider Profile
Section 4.2.12

What Date Do I Report: An Opening Balance Date Or The Date I Became A Reporting Insider?

If you have not previously filed an insider report for the issuer, enter the date on which you became an insider of this issuer.

If you have previously filed an insider report for this issuer, enter the opening balance date. This date will be used for all opening balances for this issuer and should be prior to the date of any transactions required to be reported for this issuer on SEDI.


Companion Policy to NI 55-104 Insider Reporting Requirements and Exemptions
Part 6 Issuer Grant Reports
Section 6.1

Overview

(1) Section 6.1 of the Instrument contains an interpretation provision that applies to Part 6. Because of this provision, directors and officers of a reporting issuer or a major subsidiary of a reporting issuer who are reporting insiders of the reporting issuer can use the exemption in this Part for grants of securities and related financial instruments.

(2) A reporting insider who intends to rely on the exemption in Part 6 for a grant of stock options or similar securities must first confirm that the issuer has made the public disclosure required by section 6.3 of the Instrument. If the issuer has not made the required disclosure within the required time, the reporting insider must report the grant within the required time and in accordance with the normal reporting requirements under Part 3 of the Instrument.


National Instrument 81-102 Investment Funds
Part 12 Compliance Reports
Section 12.1

Compliance Reports

(1) A mutual fund, other than an exchange-traded mutual fund that is not in continuous distribution, that does not have a principal distributor must complete and file, within 140 days after the financial year end of the mutual fund

(a) a report in the form contained in Appendix B-1 describing compliance by the mutual fund during that financial year with the applicable requirements of Parts 9, 10 and 11; and

(b) a report by the auditor of the mutual fund, in the form contained in Appendix B-1, concerning the report referred to in paragraph (a).

(2) The principal distributor of a mutual fund must complete and file, within 90 days after the financial year end of the principal distributor

(a) a report in the form contained in Appendix B-2 describing compliance by the principal distributor during that financial year with the applicable requirements of Parts 9, 10 and 11; and

(b) a report by the auditor of the principal distributor or by the auditor of the mutual fund, in the form contained in Appendix B-2, concerning the report referred to in paragraph (a).

(3) Each participating dealer that distributes securities of a mutual fund in a financial year of the participating dealer must complete and file, within 90 days after the end of that financial year

(a) a report in the form contained in Appendix B-3 describing compliance by the participating dealer during that financial year with the applicable requirements of Parts 9, 10 and 11 in connection with its distribution of securities of all mutual funds in that financial year; and

(b) a report by the auditor of the participating dealer, in the form contained in Appendix B-3, concerning the report referred to in paragraph (a).

(4) Subsections (2) and (3) do not apply to a member of IIROC.

(4.1) Except in Québec, subsections (2) and (3) do not apply to a member of the MFDA.

(4.2) In Québec, subsections (2) and (3) do not apply to a mutual fund dealer.


Form 55-102F1 Insider Profile
Section 11

Date The Insider Became an Insider or Date of Opening Balance

For each reporting issuer added under item 9 above, if the insider has not filed an insider report in respect of the reporting issuer since becoming an insider, provide the date on which the insider became an insider of the reporting issuer. Otherwise, provide an opening balance date. This opening balance date will be used as the date for all opening balances of securities of this reporting issuer. The opening balance date should be a date prior to the date of any transactions that will be reported for this reporting issuer in SEDI.


CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI
1. General
Section 1.8

What If I File My Report Late, It Is Inaccurate, or I Do Not File It At All?

Reporting insiders and all other persons required under securities legislation to file insider reports in respect of a SEDI issuer are responsible for the filing of complete, accurate and timely insider reports. This is the case whether or not an insider is reporting the information directly or through an agent, or in the case of an issuer that is a reporting insider, through an issuer representative.

The information provided by insiders is published as filed on the SEDI website (www.SEDI.ca).

Under securities legislation, it is an offence to fail to file an insider report in accordance with the requirements and filing deadlines prescribed by NI 55-104 or to submit information in an insider report that, in a material respect and at the time and in the light of the circumstance in which it is submitted, is misleading or untrue. Failure to file an insider report in a timely manner or the filing of an insider report that contains information that is materially misleading may result in one or more of the following:

  • in some jurisdictions, a late filing fee;
  • the reporting insider being identified as a late filer on a public database of late filers maintained by certain securities regulators;
  • the issuance of a cease trade order that prohibits the reporting insider from directly or indirectly trading in or acquiring securities or related financial instruments of the applicable reporting issuer or any reporting issuer until the failure to file is corrected or a specific period of time has elapsed; or
  • in appropriate circumstances, enforcement proceedings.

Securities regulators may also consider information relating to wilful, or repeated, noncompliance by directors and executive officers of a reporting issuer with their insider reporting obligations in the context of a prospectus review or continuous disclosure review. This is because this information may raise questions relating to the integrity of the insiders and the adequacy of the issuer’s policies and procedures relating to insider reporting and insider trading.

For details on late filing fees, and other consequences for late filing, please refer to the factsheet on Late Filing available from the SEDI online help or on the website of the securities regulatory authorities that publish information on SEDI. Also, see Part 10 of Companion Policy 55-104CP.


Form 55-102F2 Insider Report
Section 19

Opening Balance of Derivative Securities or Contracts Held (Initial SEDI Report Only)

If the insider is filing an initial report disclosing an option, warrant, right or other derivative held on becoming an insider or is reporting a change in such a derivative not previously reported in SEDI format, for each such derivative position so held directly or by a particular registered holder, disclose the initial number of derivative securities or contracts held in the field provided for this purpose.


Proposed National Instrument 51-107 Disclosure of Climate-related Matters
Part 2 Disclosure Requirements
Section 3

Climate-related Governance Disclosure Requirements

(1) If management of a reporting issuer solicits a proxy from a security holder of the issuer for the purpose of electing directors to the reporting issuer’s board of directors, the issuer must include in its management information circular the disclosure referred to in Form 51-107A.

(2) A reporting issuer that does not send a management information circular to its security holders must include the disclosure referred to in Form 51-107A in its AIF, or if it does not file an AIF, in its annual MD&A.


National Instrument 62-103 The Early Warning System and Related Takeover Bid and Insider Reporting Issues
Part 4 Alternative Monthly Reporting System
Section 4.2

Disqualification

(1) An eligible institutional investor shall not file reports under this Part for a reporting issuer if the eligible institutional investor, or a joint actor

(a) makes or intends to make a formal bid for securities of the reporting issuer;

(b) proposes or intends to propose a reorganization, amalgamation, merger, arrangement or similar business combination with a reporting issuer that if completed would reasonably be expected to result in the eligible institutional investor, either alone or together with any joint actors, possessing effective control over the reporting issuer or a successor to all or a part of the business of the reporting issuer; or

(c) solicits proxies from securityholders of the reporting issuer in any of the following circumstances:

(i) in support of the election of one or more persons as directors of the reporting issuer other than the persons proposed to be nominated by management of the reporting issuer;

(ii) in support for a reorganization, amalgamation, merger, arrangement or other similar corporate action involving the securities of the reporting issuer if that action is not supported by management of the reporting issuer;

(iii) in opposition to a reorganization, amalgamation, merger, arrangement or other similar corporate action involving the securities of the reporting issuer if that action is proposed by management of the reporting issuer.

(2) For the purposes of this section, “solicit” has the meaning ascribed to that term in National Instrument 51-102 Continuous Disclosure Obligations.


National Instrument 55-104 Insider Reporting Requirements and Exemptions
Part 9 General Exemptions
Section 9.6

Reporting exemption (executor and co-executor)

The insider reporting requirement does not apply to a reporting insider for a security of an issuer beneficially owned or controlled, directly or indirectly, by an estate if

(a) the reporting insider is an executor, administrator or other person or company who is a representative of the estate (referred to in this section as an executor of the estate), or a director or officer of an executor of the estate;

(b) the reporting insider is subject to the insider reporting requirement solely because of the reporting insider being an executor or a director or officer of an executor of the estate; and

(c) another executor or director or officer of an executor of the estate has filed an insider report that discloses substantially the same information as would be contained in an insider report filed by the reporting insider for securities of an issuer beneficially owned or controlled, directly or indirectly, by the estate.


CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI
4 Insider Information
4.1 General
Section 4.1.11

As A Reporting Insider, Do I Need To Report Securities And Related Financial Instruments That My Spouse Owns Or Controls?

As a reporting insider of a SEDI issuer, you need to report any securities and any related financial instruments of that SEDI issuer that your spouse (or any other person) owns if you have or share control or direction, whether direct or indirect, over those securities or related financial instruments.

A person will generally have or share control or direction over securities if the person directly or indirectly through any contract, arrangement, understanding or relationship or otherwise has or shares

  • voting power, which includes the power to vote, or to direct the voting of, such securities and/or
  • investment power, which includes the power to acquire or dispose, or to direct the acquisition or disposition of such securities.

National Instrument 51-102 Continuous Disclosure Obligations
Part 4 Financial Statements
Section 4.9

Change in Corporate Structure

If an issuer is party to a transaction that resulted in,

(a) the issuer becoming a reporting issuer other than by filing a prospectus; or

(b) if the issuer was already a reporting issuer, in

(i) the issuer ceasing to be a reporting issuer,

(ii) a change in the reporting issuer’s financial year end, or

(iii) a change in the name of the reporting issuer; the issuer must, as soon as practicable, and in any event not later than the deadline for the first filing required under this Instrument following the transaction, file a notice stating

(c) the names of the parties to the transaction;

(d) a description of the transaction;

(e) the effective date of the transaction;

(f) the name of each party, if any, that ceased to be a reporting issuer after the transaction and of each continuing entity;

(g) the date of the reporting issuer’s first financial year-end after the transaction if paragraph (a) or subparagraph (b)(ii) applies;

(h) the periods, including the comparative periods, if any, of the interim financial reports and the annual financial statements required to be filed for the reporting issuer’s first financial year after the transaction, if paragraph (a) or subparagraph (b)(ii) applies; and

(i) what documents were filed under this Instrument that described the transaction and where those documents can be found in electronic format, if paragraph (a) or subparagraph (b)(ii) applies.


CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI
4 Insider Information
4.1 General
Section 4.1.1

Do I Have To Use SEDI To File My Insider Reports?

If you are a reporting insider of a SEDI issuer, you need to file insider reports using SEDI unless you are exempt under NI 55-104 or NI 62-103 or have been otherwise exempted by a securities regulatory authority. In certain cases, you may file insider reports in paper format rather than on SEDI. Please see question 4.3.7 below for a list of exceptional situations where you may file your report in paper format.


National Instrument 55-104 Insider Reporting Requirements and Exemptions
Part 11 Effective Date and Transition
Section 11.2

Transition

(1) Despite sections 3.3 and 3.4, a reporting insider may file an insider report required by either of those sections within 10 days of a change described in those sections if the change relates to a transaction that occurred on or before October 31, 2010.

(2) Despite section 4.1, a reporting insider may file an insider report required under that section within 10 days of an event described in that section if the event relates to a transaction that occurred on or before October 31, 2010.

(3) Despite paragraph 5.4(2)(a), a reporting insider may file an insider report required under that paragraph within 10 days of a disposition or transfer described in that paragraph if the disposition or transfer occurred on or before October 31, 2010

(4) Despite paragraph 6.4(2)(a), a reporting insider may file an insider report required under that paragraph within 10 days of a disposition or transfer described in that paragraph if the disposition or transfer occurred on or before October 31, 2010.


CSA Staff Notice 55-317 Automatic Securities Disposition Plans
Part 2 Background

Insider Trading and Automatic Plans*

Under securities legislation, insiders are generally prohibited from trading in an issuer’s securities with knowledge of MNPI. However, insiders may rely on the Legal Defense when their trades are made under an “automatic plan” referred to in securities legislation. Insiders that are “reporting insiders” as defined in National Instrument 55-104 Insider Reporting Requirements and Exemptions (NI 55-104) are required to file an insider report each time there is a trade in securities of the issuer by or on behalf of the insider under an ASDP in accordance with NI 55-104.

We note that executive officers and directors are increasingly being encouraged to build and hold a significant level of securities ownership in the issuers that they manage or oversee in order to align their interests with other security holders. While the issuer’s securities may form an important part of compensation, the insider trading prohibition under securities legislation and regular exposure to MNPI may limit the ability of insiders to sell the securities they receive as part of their compensation arrangements and often results in insiders being unable to trade securities for extended periods of time.

We recognize that a well-designed and well-administered ASDP can be a legitimate mechanism for trading by insiders. However, it is important to ensure that ASDPs contain meaningful conditions and restrictions to ensure that insiders are not able to benefit from MNPI with respect to the issuer and that ASDPs are automatic in substance.

*This title is provided by Lexata; it is not part of the notice.


National Instrument 55-104 Insider Reporting Requirements and Exemptions
Part 2 Application
Section 2.2

Reporting Deadline

In Ontario, for the purposes of subsection 107(2) of the Securities Act (Ontario), in the case of a transaction occurring after October 31, 2010, the prescribed period is within five days of any change in the beneficial ownership of, or control or direction over, whether direct or indirect, securities of the reporting issuer or any interest in, or right or obligation associated with, a related financial instrument.


Exemptive Relief Orders

Companion Policy to NI 55-104 Insider Reporting Requirements and Exemptions
Part 9 Exemptions
Section 9.2

Reporting Exemption

The definition of “reporting insider” includes certain enumerated persons or companies that generally satisfy the criteria contained in subsection (i) of the definition of reporting insider, namely, routine access to material undisclosed information and significant power or influence over the reporting issuer. Although there is no general exemption for the enumerated persons or companies based on lack of routine access to material undisclosed information or lack of power or influence, we will consider applications for exemptive relief where the issuer or reporting insider can demonstrate that the reporting insider does not satisfy these criteria. This might include, for example, a situation where a foreign subsidiary may appoint a locally resident individual as a director to meet residency requirements under applicable corporate legislation, but remove the individual’s powers and liabilities through a unanimous shareholder declaration.


National Instrument 62-103 The Early Warning System and Related Takeover Bid and Insider Reporting Issues
Part 4 Alternative Monthly Reporting System
Section 4.8

Exemptions

The requirement to file a report under this Part does not apply to a joint actor with an eligible institutional investor in connection with a specific filing if

(a) the eligible institutional investor files a report under this Part at the time that the joint actor is required to file; and

(b) the report discloses the information concerning the joint actor required by this Instrument.


Companion Policy 51-102CP Continuous Disclosure Obligations
Part 3 Financial Statements
Section 3.9

Change in Corporate Structure

(1) Section 4.9 of the Instrument requires a reporting issuer to file a notice if the issuer has been party to certain transactions. The reporting issuer may satisfy this requirement by filing a copy of its material change report or news release, provided that

(a) the material change report or news release contains all the information required in the notice; and

(b) the reporting issuer files the material change report or news release with the securities regulatory authority or regulator

(i) under the Change in Corporate Structure category on SEDAR, or

(ii) if the issuer is not an electronic filer, as a notice under section 4.9.

(2) If the transaction was a reverse takeover, the notice should state that fact and who the reverse takeover acquirer was.

(3) Under paragraph 4.9(h) of the Instrument, the issuer must state the periods of the interim financial reports and the annual financial statements it has to file for its first financial year. Issuers should explain how they determined the periods, particularly if section 4.7 of the Instrument applies.


Form 55-102F2 Insider Report
Section 8

Opening Balance of Securities Held (Initial SEDI Report Only)

If the insider is filing an initial report in respect of securities held on becoming an insider or is reporting a change in a security or class of securities previously reported only in paper format, for each security or class of securities held directly or by a particular registered holder, disclose the initial number or amount of securities so held in the field provided for this purpose on the web page titled “File insider report – Opening balance on initial SEDI report (Non-Derivatives)”, or the corresponding web page for derivatives, as applicable. For debt securities, provide the aggregate nominal value of the securities held.

If an opening balance of securities held is required to be disclosed, the information with respect to the “date of transaction” and “nature of transaction” required under items 9 and 10 below will be generated by the SEDI software application. The “Opening/initial balance date” will be the date the insider became an insider or the date the insider entered for all opening balances for securities of this issuer.

If the insider has previously filed a report in SEDI disclosing the balance of the security or class of securities held directly or by a particular registered holder, the opening balance of the security or class of securities so held is generated by the SEDI software application based on all previous reports filed in respect of the particular holding.

If an initial SEDI report involves the holding of a derivative, see item 19 below.


National Instrument 55-104 Insider Reporting Requirements and Exemptions
Part 6 Exemption for Certain Issuer Grants
Section 6.3

Issuer grant report

An issuer grant report filed under this Part in respect of a compensation arrangement must include

(a) the date the option or other security was issued or granted;

(b) the number of options or other securities issued or granted to each director or officer;

(c) the price at which the option or other security was issued or granted and the exercise price;

(d) the number and type of securities issuable on the exercise of the option or other security; and

(e) any other material terms that have not been previously disclosed or filed in a public filing on SEDAR.


OSC Staff Notice 55-701 Automatic Securities Disposition Plans and Automatic Securities Purchase Plans
Question 3

Does the Insider Have to File an Insider Report Each Time there is a Disposition under an ASDP?

Generally the insider (or the broker on behalf of the insider) will be required to file insider reports each time there is a disposition under an ASDP. We recommend that the insider include a statement in the general remarks section that the sale is pursuant to an ASDP.

NI 55-101 allows for reporting on an annual basis for certain acquisitions of securities under an ASPP. As a result of recent amendments to NI 55-101, effective April 30, 2005, insiders can now report certain “specified dispositions” in connection with an ASPP on an annual basis. An ASDP is not an ASPP since it is designed to facilitate dispositions not acquisitions. However, if an insider wishes to make an application for exemptive relief, and is able to demonstrate that the plan is genuinely an automatic plan and the insider cannot make discrete investment decisions through the plan, staff may be prepared to recommend exemptive relief to allow the insider to file reports on an annual basis.


National Instrument 55-104 Insider Reporting Requirements and Exemptions
Part 9 General Exemptions
Section 9.5

Reporting exemption (corporate group)

The insider reporting requirement does not apply to a reporting insider if

(a) the reporting insider is a subsidiary or other affiliate of another reporting insider (the affiliated reporting insider); and

(b) the affiliated reporting insider has filed an insider report in respect of the reporting issuer that discloses substantially the same information as would be contained in an insider report filed by the reporting insider, including details of the reporting insider’s

(i) beneficial ownership of, or control or direction over, whether direct or indirect, securities of the reporting issuer; and

(ii) interest in, or right or obligation associated with, any related financial instrument involving a security of the reporting issuer.


National Instrument 55-104 Insider Reporting Requirements and Exemptions
Part 4 Supplemental Insider Reporting Requirement
Section 4.1

Other agreements, arrangements or understandings

(1) If a reporting insider of a reporting issuer enters into, materially amends, or terminates an agreement, arrangement or understanding described in subsection (2), the reporting insider must, within five days of this event, file an insider report in respect of the reporting issuer in accordance with section 4.3.

(2) An agreement, arrangement or understanding must be reported under subsection (1) in an insider report in respect of a reporting issuer if

(a) the agreement, arrangement or understanding has the effect of altering, directly or indirectly, the reporting insider’s economic exposure to the reporting issuer;

(b) the agreement, arrangement or understanding involves, directly or indirectly, a security of the reporting issuer or a related financial instrument involving a security of the reporting issuer; and

(c) the reporting insider is not otherwise required to file an insider report in respect of this event under Part 3 or any corresponding provision of Canadian securities legislation.