The Securities Commission has decided to revoke the previously granted exemptive relief from insider reporting requirements for certain insiders of an issuer selling common shares under an automatic securities disposition plan (ASDP). This decision is based on the principles outlined in CSA Staff Notice 55-317, which emphasizes transparency and good corporate governance in the use of ASDPs and the reporting of trades.
The original relief, granted on February 1, 2011, allowed certain insiders to sell shares without adhering to standard insider reporting requirements. However, the CSA’s guidance, published on December 10, 2020, indicated a shift towards greater transparency in insider trading, suggesting that the CSA staff would be unlikely to recommend reporting relief for trades under ASDPs.
The revocation reflects the jurisdictions’ determination that the original relief is no longer consistent with the current regulatory emphasis on transparency. The decision aims to maintain public confidence in the fairness of capital markets.
The revocation was made under the Process for Exemptive Relief Applications in Multiple Jurisdictions, with the British Columbia Securities Commission acting as the principal regulator. The decision aligns with the Securities Act, R.S.O. 1990, c. S.5, as amended, specifically sections 107(2) and 144, and National Instrument 55-104 Insider Reporting Requirements and Exemptions, section 3.3. The outcome is that the insiders previously exempted will now have to comply with the standard insider reporting requirements when disposing of their shares under ASDPs.