Staff of the Ontario Securities Commission (staff or we) have recently received a number of questions on behalf of insiders who wish to establish an “automatic securities disposition plan” (sometimes referred to as a “pre-arranged structured sales plan”) (an ASDP) with their broker.
We have compiled a list of the most frequently asked questions (the FAQs) and have set out our responses to such questions below.
This notice represents staff’s views on the interpretation of certain requirements of Ontario securities law that apply to ASDPs. Although the focus of this notice is on ASDPs, we would generally consider the views set out below as also being applicable to “automatic securities purchase plans” (ASPPs) as described in National Instrument 55-101 Insider Reporting Exemptions (NI 55-101). Accordingly, unless otherwise indicated, a reference in this notice to a “plan” should be read as referring to both an ASDP and an ASPP.
This notice is intended to be a temporary notice pending the development by staff of the Canadian Securities Administrators (the CSA) of a CSA Staff Notice in relation to ASDPs and similar plans generally. We expect that the proposed CSA Staff Notice will also address additional questions, such as the application of certain requirements of Canadian securities legislation to insiders who wish to establish a managed account where full discretionary authority over the securities in the account rests with the manager of the account. Questions relating to managed accounts are beyond the scope of this notice.
In the meantime, we would remind issuers, insiders and other market participants that there may be differences in the securities law requirements of the other CSA jurisdictions that apply to automatic securities plans, and that the specific requirements of the other jurisdictions’ securities legislation should be reviewed prior to establishing an ASDP or ASPP.