CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

Under Canadian securities legislation, certain insiders (referred to as “reporting insiders”) of reporting issuers, other than mutual funds, are required to file insider reports about their transactions in securities and related financial instruments of their public companies using an internet-based reporting system called SEDI.

SEDI, or the System for Electronic Disclosure by Insiders, is the electronic insider reporting system for reporting insiders to file their insider reports. Reporting issuers also use SEDI to file certain required information that is necessary for their reporting insiders to comply with the insider reporting requirements. The SEDI website is located at www.SEDI.ca.

SEDI is also available to members of the public to search for and view public information about the trading activities of reporting insiders free of charge.

The SEDI electronic reporting requirements for issuers and reporting insiders (referred to as SEDI users) are found in National Instrument 55-102 System for Electronic Disclosure by Insiders (SEDI). Companion Policy 55-102CP contains commentary and guidance on the electronic reporting requirements in NI 55-102.

The substantive insider reporting requirements and specific insider reporting obligations are found in National Instrument 55-104 Insider Reporting Requirements and Exemptions. Companion Policy 55-104CP contains commentary and guidance on the insider reporting requirements in NI 55-104.

The Canadian Securities Administrators (CSA) have prepared the questions and answers in this Staff Notice (the QAs) to help SEDI users file information on SEDI. Accordingly, the QAs focus on the filing requirements under NI 55-102. They are intended for general application and should not be relied upon as legal advice. Information about the substantive legal insider reporting requirements is in NI 55-104 and its Companion Policy 55-104CP.

This notice replaces CSA Staff Notice 55-308 Questions on Insider Reporting and CSA Staff Notice 55-310 Questions and Answers on the System for Electronic Disclosure by Insiders (SEDI), which have been or will be withdrawn in the various CSA jurisdictions.

In cases of doubt, SEDI users should obtain appropriate legal advice to determine their obligations under securities legislation.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

Introduction

How are the QAs organized?

The QAs are divided into different sections based on the logical or technical steps in the filing process on SEDI and the type of SEDI filer -insider or issuer. There is also a section on public access to filings and profile information on SEDI.

Please refer to Appendix A for information on how to contact the various securities regulatory authorities and the SEDI operator. Appendix A includes the website addresses of the securities regulatory authorities that publish information on SEDI and the website address of the CSA.

You can also refer to the factsheets and online help feature on the SEDI website (www.SEDI.ca).

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

Introduction

Some Defined Terms

To help you understand some of the frequently used defined terms referred to in the QAs, here is a list of these terms, along with their meanings.

CSA means the Canadian Securities Administrators

NI 55-102 means National Instrument 55-102 System for Electronic Disclosure by Insiders (SEDI)

NI 55-104 means National Instrument 55-104 Insider Reporting Requirements and Exemptions

NI 62-103 means National Instrument 62-103 The Early Warning System and Related Takeover Bid and Insider Reporting Issues

related financial instrument [FN 1] generally refers to

(i) a derivative, the value, market price or payment obligations of which are derived from, referenced to or based on the value, market price or payment obligations of a security, or

(ii) any other instrument, agreement, or understanding that affects, directly or indirectly, a person or company’s economic interest in a security

reporting insider [FN 2] means an insider of a reporting issuer if the insider is

(a) the CEO, CFO or COO of the reporting issuer, of a significant shareholder of the reporting issuer or of a major subsidiary of the reporting issuer;

(b) a director of the reporting issuer, of a significant shareholder of the reporting issuer or of a major subsidiary of the reporting issuer;

(d) a significant shareholder of the reporting issuer;

(e) a significant shareholder based on post-conversion beneficial ownership of the reporting issuer’s securities and the CEO, CFO, COO and every director of the significant shareholder based on post-conversion beneficial ownership;

(f) a management company that provides significant management or administrative services to the reporting issuer or a major subsidiary of the reporting issuer, every director of the management company, every CEO, CFO and COO of the management company, and every significant shareholder of the management company;

(g) an individual performing functions similar to the functions performed by any of the insiders described in paragraphs (a) to (f);

(h) the reporting issuer itself, if it has purchased, redeemed or otherwise acquired a security of its own issue, for so long as it continues to hold that security; or

(i) any other insider that

(i) in the ordinary course receives or has access to information as to material facts or material changes concerning the reporting issuer before the material facts or material changes are generally disclosed; and

(ii) directly or indirectly, exercises, or has the ability to exercise, significant power or influence over the business, operations, capital or development of the reporting issuer

reporting issuer [FN 3] means, generally, a company or other entity that has certain public reporting and other obligations under securities legislation because its securities are publicly traded in the relevant province or territory (please see the definition of “reporting issuer’ under securities legislation)

SEC means the United States Securities and Exchange Commission

SEDAR means the System for Electronic Document Analysis and Retrieval

SEDI means the System for Electronic Disclosure by Insiders

SEDI issuer [FN 4] means a reporting issuer, other than a mutual fund, that is required to comply with National Instrument 13-101 System for Electronic Document Analysis and Retrieval (SEDAR)

FN 1 The term “related financial instrument’ is defined in securities legislation. The concept of “related financial instrument” is generally intended to refer to derivatives of securities. Commentary and guidance on this term can be found in Companion Policy 55-104CP.

FN 2 As defined in NI 55-104.

FN 3 The term “reporting issuer” is defined in securities legislation.

FN 4 As defined in NI 55-102

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

1. General

Initial steps

Initial steps

SEDI issuers and their reporting insiders must take certain initial steps before they will be able to file information on SEDI.

SEDI Issuers: As a SEDI issuer (or agent of a SEDI issuer), you need to

ensure your existing SEDAR profile is accurate and complete
register on SEDI
file an issuer profile supplement including information about your outstanding securities and related financial instruments that may be held by your reporting insiders

Reporting Insiders: As a reporting insider (or agent of a reporting insider) of a SEDI issuer, or any other person required under securities legislation to file insider reports in relation to a SEDI issuer, you need to

register on SEDI
file an insider profile
file an initial insider report 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.

For more information on registering on SEDI, please see section 2.1 General under Part 2 Registration.

Ongoing requirements

After the initial SEDI registration, profile and initial report are filed, SEDI issuers and their reporting insiders have ongoing obligations and must take certain steps on a continuous basis.

SEDI Issuers: As a SEDI issuer (or agent of a SEDI issuer), your ongoing obligation is to

file issuer event reports (to report stock dividends, stock splits, etc.)
amend your profile supplement if there is any change in the information disclosed.

SEDI issuers may also choose to file issuer grant reports to report grants of securities and related financial instruments to reporting insiders. For more information on issuer grant reports, see section 3.4 Issuer Grant Report.

within five [FN 5] calendar days of any of the following changes, to file an insider report 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.

Amend your insider profile if there is any change in the information disclosed.

FN 5 Prior to November 1, 2010, within 10 calendar days.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

1. General

Section 1.1

Who Uses SEDI?

The following persons and companies use SEDI: * SEDI issuers to file their issuer profile supplement and issuer reports * Reporting insiders of SEDI issuers to file their insider profile and insider reports * Any other person required under securities legislation to file insider reports in respect of a SEDI issuer.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

1. General

Section 1.2

What Computer Systems Requirements Do I Need to Use SEDI?

Generally, you can use SEDI if you can access the Internet from your computer. Recommended system requirements are on the SEDI website (www.SEDI.ca).

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

1. General

Section 1.3

Who Do I Call For Help With SEDI?

Depending on the type of help you need, call your securities regulatory authority or the SEDI Technical Service Desk.

For example, if you have filing or compliance-related questions regarding SEDI or NI 55-102, such as

how to use SEDI to report your insider transactions
what information you need to enter on SEDI
who must register to use SEDI
when must you report transactions

contact your securities regulatory authority (see Appendix A).

Or, if you are having technical problems using SEDI, such as

seeing error messages on the screen
forgetting your password and/or access key
needing your access key or password reset
having printing problems

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.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

1. General

Section 1.9

What If I Am Required To File an Insider Report And SEDI is Not Available?

If you experience unanticipated technical difficulties that make SEDI unavailable, you can meet your obligations to file your insider report by filing your report in paper format with the relevant securities regulatory authority no later than two days after your report is due. As soon as practicable after the technical difficulties have been resolved, you must re-file your report on SEDI.

Prepare your report using Form 55-102F6 and write the words “IN ACCORDANCE WITH SECTION 4.1 OF NATIONAL INSTRUMENT 55-102 SYSTEM FOR ELECTRONIC DISCLOSURE BY INSIDERS, THIS INSIDER REPORT IS BEING FILED IN PAPER FORMAT UNDER A TEMPORARY HARDSHIP EXEMPTION.” in capital letters at the top of the front page.

For more information on the temporary hardship exemption, please refer to Part 4 of NI 55-102 which sets out the temporary hardship exemption.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

You can also get additional information on SEDI through the

Securities regulatory authorities’ websites and contact numbers (see Appendix A), or
SEDI Technical Service Desk -1-800-219-5381 (Toll Free) for technical assistance.

Please see question 1.3 for when to contact the SEDI operator and for when to contact a securities regulatory authority.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

1. General

Section 1.13

Will The Information I Enter on SEDI Be Publicly Available?

Yes. Insider reports filed on SEDI with the securities regulatory authorities are publicly available. However, the reporting insider’s personal information given on the form and some remarks are confidential.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

1. General

Section 1.14

What Are Some of The Technical Features I Should Keep in Mind When Using SEDI?

Browser Back Button -Try not to use your browser ‘Back’ button to navigate on SEDI. Where it affects system operability, SEDI will disable the use of your browser’s ‘Back’ button. In these instances, clicking the browser ‘Back’ button will not return you to a prior screen – you will remain on the current screen. Alternatively, SEDI will bring you to a screen indicating that you have performed an unauthorized sequence of actions. You can try to exit from this screen by clicking any of the primary or secondary navigation buttons available on the screen (i.e., insider report, insider profile, file insider report, amend or delete insider report, etc.). Depending on the navigation button selected, SEDI will take you out of the “unauthorized sequence of actions” screen to the applicable SEDI screen.

Browser Stop Button -If for any reason you click the browser ‘Stop’ button, you must click the browser ‘Refresh’ button in order to proceed.
Cancel Button -The ‘Cancel’ button will delete all information previously entered and will cancel the current option. For example, if you selected ‘Create insider profile’ and decide in mid-process that you prefer another option, you would click the – Cancel’ button. SEDI would display the previous option you had selected.
Certify Button -The ‘Certify’ button is used to confirm that the information filed electronically is true and complete in every respect. In the case of a filing agent, the certification is based on the agent’s best knowledge, information and belief.
Language -The SEDI site is fully bilingual (French and English). You can change to the other language within the site by returning to the ‘Welcome‘ page and clicking the appropriate language button available from the main navigation bar (top right portion of the screen).
Next Button -The ‘Next’ button appears when SEDI prompts you to proceed to the next screen.
No Draft Capability -SEDI has no draft capability. Make sure you have all the necessary information with you before you begin to file. For security reasons, if you stop entering information on SEDI for more than 20 minutes you will lose all the information you just entered. If you close the browser without properly logging-out, you will be temporarily locked out of SEDI for 30 minutes. You will have to log in and enter the information again.
‘Not Applicable’ Checkbox -All SEDI fields are mandatory, except for certain search criterion fields in the public reports. If the fields do not apply in your case, place a check mark in the ‘Not Applicable’ checkbox.
Printer Friendly Version Button -Use the ‘Printer friendly version’ button to display a separate browser window with pre-formatted data that was previously entered. SEDI will trigger a print window offering you print options.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

2 Registration

2.1 General

Before filing any information on SEDI*

Before filing any information on SEDI, a reporting insider, issuer representative or agent must register as a user on SEDI. To do so, you need to

go to the SEDI website (www.SEDI.ca) and click on ‘Register as a SEDI User’
follow the screen instructions and complete Form 55-102F5 -Register as a SEDI user
print the completed form that is dated and time stamped, and sign it in the space provided
fax or send it to the SEDI operator at the address provided on Form 55-102F5 (fax: 1866-729-8011 within North America or 416-365-9194 outside of North America)

What Information Do I Need to Provide to Register as a SEDI User?

You need to provide the following information:

your name
name of your employer and your position (if you are registering as an agent)
your address (your principal residence if you are a reporting insider or your business address if you are an agent or issuer representative)
your daytime telephone number
your fax number if available
your e-mail address if available
the capacity in which you will be using the system, i.e., as a reporting insider, as an agent for reporting insider(s) and/or issuer(s), or as an issuer representative. (You can select more than one SEDI user classification by holding the “CTRL” key.)
confidential question and answer (see question 2.1.9)

Note: You should register as a SEDI user only once, even though you may be an agent for many reporting insiders.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

2 Registration

2.1 General

Section 2.1.4

In What Category Should I Register on SEDI?

There are different categories of SEDI user depending on whether you are using SEDI as a reporting insider, as an issuer representative, or as an agent.

Each category of SEDI user has access to different functions on SEDI. Depending on the category chosen, you will be able to log on to the relevant SEDI user home page and access the various functions available. Please see questions 2.1.5 to 2.1.7.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

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

When your account has been activated, you will be taken to the proper homepage for your SEDI user type (e.g., insider, agent or issuer representative), and be granted access to the functions associated with your SEDI user type. A SEDI user can also log on to SEDI, and click ‘Your user information’ and verify the Registration status field on the View your user information page. If your SEDI user account has been validated, your registration status should display the word ‘Activated’.

If your account has not been validated, when you log on to SEDI you will be taken to a homepage that advises you to complete the registration process and will only allow you to access your SEDI user information.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

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 55-316 Questions and Answers on Insider Reporting and SEDI

2 Registration

2.2 Agents

Section 2.2.5

Do insiders who will only file through an agent need to register on SEDI?

No.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

2 Registration

2.2 Agents

Section 2.2.6

Do issuers who will only file through an agent need an issuer representative?

No.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

Each time you create an insider profile or an issuer profile supplement, SEDI will display an insider number (if you are an insider) and an access key online to you as creator of the profile. In addition, SEDI will also send an e-mail (if an e-mail address is provided) or letter containing the access key to the insider or issuer representative or agent.

An access key is a case-sensitive alpha-numeric code that is connected either to an insider or issuer profile supplement and issued once an insider profile or issuer profile supplement is created. It allows you, as an agent, insider, or issuer representative, to make a filing once the insider profile or issuer profile supplement is created. The system gives one access key per profile. Call the SEDI Technical Service Desk at 1-800-219-5381 if you forget your password or your access key.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

3 Issuer Information

SEDI issuers need to *

SEDI issuers need to file certain information on SEDI. SEDI issuers must create their issuer profile supplement before insiders can file their insider reports. As a SEDI issuer, you need to

ensure your SEDAR profile is accurate and up to date
register on SEDI through a registered issuer representative or agent (see Part 2 Registration)
file your issuer profile supplement (including a list of your issued and outstanding securities and related financial instruments) on SEDI through a registered issuer representative or agent

And then, on a continuous basis:

file any change in the information disclosed
file on SEDI an issuer report when required

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

3 Issuer Information

3.1 General

Section 3.1.1

Which Issuers Must Use SEDI?

All reporting issuers, except mutual funds, that file disclosure documents on SEDAR must file information on SEDI unless exempted. These issuers are referred to as SEDI issuers.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

3 Issuer Information

3.1 General

Section 3.1.2

Do I have to file a report if I am a reporting insider of (a) an income trust, (b) a labour sponsored investment fund corporations (LSIFs) or a labour sponsored venture capital fund corporation (LSVCF), (c) a mutual fund or (d) a limited partnership?

(a) an income trust?

Yes

(b) a labour-sponsored investment fund (LSIF) or labour-sponsored venture capital fund
corporation (LSVCF)?

The answer depends on the province(s) where the LSIF or LSVCF is a reporting issuer
(or equivalent). In certain jurisdictions, such as Alberta, LSIFs and their insiders do not
have to file on SEDI because LSIFs are considered mutual funds. In other jurisdictions,
such as Ontario and Manitoba, LSIFs and their reporting insiders must file on SEDI
because LSIFs are not considered to be mutual funds for insider reporting purposes.

No. The insider reporting requirement does not apply to an insider of an issuer that is a
mutual fund (see section 9.1 of NI 55-104).

What Do I Need To File On SEDI?

As a SEDI issuer, you need to file, through a registered issuer representative or agent:

an issuer profile supplement (see ‘Issuer Profile Supplement’ section)
issuer event reports if an issuer event has occurred (see ‘Issuer Event Report’ section)
any change in the information disclosed.

The issuer profile supplement contains information about the issuer, including the designations of its outstanding securities and related financial instruments that its insiders hold, and contact information for the person responsible for insider affairs. The legal form is Form 55-102F3.

The issuer event report contains information about an issuer event. An issuer event is a stock dividend, stock split, consolidation, amalgamation, reorganization, merger or other similar event that affects all holdings of a class of the issuer’s securities in the same manner. The legal form is Form 55-102F4.

An issuer may choose to file issuer grant reports. Issuer grant reports disclose specific information relating to the grant or issue of an issuer’s securities and related financial instruments made to insiders of the issuer pursuant to compensation arrangements.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

3 Issuer Information

3.1 General

Section 3.1.8

How Do I File Issuer Information On SEDI?

You must be a registered SEDI user and have an active SEDI user account (see Part 2 Registration). Once registered and validated, log onto the system. At your home page, select ‘Create issuer profile supplement’ in order to create the issuer profile supplement for the issuer. Simply follow the on-screen instructions to complete the process. Once this process is completed, you will obtain the issuer access key.

To file an issuer event report you must log on to SEDI and enter the issuer access key for that issuer. From the Issuer activities page, click ‘Issuer event report’ and follow the on-screen instructions to complete the process.

To file an issuer grant report when an issuer grants or issues securities or related financial instruments pursuant to a compensation arrangement, you must log on to SEDI and enter the issuer access key for that issuer. From the Issuer activities page, click ‘Issuer grant report’ and follow the on-screen instructions to complete the process.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

Also, by not filing your issuer profile supplement, your insiders will not be able to file their reports on SEDI. You will cause unnecessary inconvenience to them. Your insiders will have to file paper reports relying on the temporary hardship exemption. After you do complete your issuer profile supplement, your insiders will have to file on SEDI every report previously filed in paper format under the temporary hardship exemption.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

3 Issuer Information

3.2 Issuer Profile Supplement

Section 3.2.4

How Do I Designate The Issuer’S Outstanding Securities And Related Financial Instruments?

To create a security designation for an outstanding security or related financial instrument, you need to do the following for each:

select the security category (Debt, Equity or Issuer derivative)
select the security name (from a drop down list)
if you need to, you can type in a brief description of a particular security so there is no confusion with a security that may be similar
if you selected ‘Issuer derivative’ in the first step, you need to select the underlying security. To do this,
- select the securities category of the underlying security (Debt, Equity or Issuer derivative)
- select the underlying security name
- if applicable, enter any additional words to describe the specific underlying security

How Do I Designate The Following Types Of Securities?

1. Asset-backed securities	a) Select b) Select c) Describe	‘Equity’ or ‘Debt’ category ‘Other’ as security name type ‘Asset-backed Securities’ in the additional description field
2. Options* (exercisable into common shares under plan) for the underlying security (common shares)	a) Select b) Select c) Describe d) Select e) Select f) Describe	‘Issuer derivative’ category ‘Options’ as security name (if needed, add description) ‘Equity’ category ‘Common shares’ as security name (if needed, add description)
3. Convertible debentures	a) Select b) Select c) Describe	‘Debt’ category ‘Convertible debentures’ as security name (if needed, add description)

* See also the questions and answers under section 4.4. Reporting for Related Financial Instruments for an explanation of “issuer derivatives” and “underlying security”.

Suggestion: Together, the security name and description will appear as one of the designated securities on this issuer’s list of securities. Its insiders will see and select from this list in order to report transactions and holdings in securities or related financial instruments of that issuer. Make sure to enter any additional words used to describe the specific security or class of security that will distinguish this security or class of security from another that will allow your reporting insiders to choose the appropriate security or related financial instrument. SEDI will compute the total balances of securities and related financial instruments that have the same designation, ownership type and registered holder name combination.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

3 Issuer Information

3.2 Issuer Profile Supplement

Section 3.2.8

Do I Need To File An Issuer Profile Supplement If The Issuer Is Only Offering Limited Partnership Units?

Yes.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

3 Issuer Information

3.2 Issuer Profile Supplement

Section 3.2.9

Are Shares And Options The Same Thing?

No. An option is the right to buy or sell a specific security, such as a common share, at a predetermined price within a specified time. A share is a security that represents a residual ownership interest in a company and generally carries voting privileges.

The two are often linked. For example, in the case of an option to acquire shares in a reporting issuer, you must file separate insider reports for each of the following if they occur while you are reporting insider:

the acquisition (i.e., grant) of an option;
the exercise of an option;
the acquisition of the underlying shares;
any subsequent sale or transfer of the shares.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

3 Issuer Information

3.2 Issuer Profile Supplement

Section 3.2.10

What Derivatives Can I Select As A Category Of Securities?

A derivative is generally an instrument that derives its value, directly or indirectly, from an underlying interest, such as a security.

For SEDI, derivatives that are subject to insider reporting requirements may be classified as either “issuer derivatives” or “third party derivatives”. Issuer derivatives are derivatives such as options, warrants and rights issued by a company or other entity directly to its insiders. Share-based compensation instruments, including phantom stock units, deferred share units (DSUs), restricted share awards (RSAs), performance share units (PSUs), stock appreciation rights (SARs) and similar instruments are also generally issuer derivatives.

You can select ‘Issuer derivative’ as a category of security if you, as the issuer, have issued the derivatives. You would then select the appropriate name of the security: ‘options’, ‘rights’, ‘warrants’ or ‘other’. If necessary, you could also add a brief description to the name of the security.

How Does A SEDI Issuer Change Its Information On SEDI?

Your issuer information on SEDI is composed of the information you filed on SEDAR (SEDAR profile) and the information you filed on SEDI under the issuer profile supplement. Your SEDAR profie information is automatically transferred over to SEDI. Your issuer profile supplement includes your

issuer name
insider affairs contact information
security designations
confidential question and answer.

You amend SEDI information, such as your insider affairs contact information and security designations, on SEDI as an amended issuer profile supplement. You need to amend SEDAR information, such as your head office or mailing address, on SEDAR.

If you need to change information filed on SEDI, log on, go to the Issuer Profile Supplement page, and follow the on-screen instructions. If you need to change the information that comes from SEDAR, you need to contact your SEDAR filing agent and have the agent amend this information.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

issuer event type (e.g., stock dividend, stock split, reorganization)
date the issuer event occurred
brief description of the issuer event (e.g., 3 for 1 Stock Split -Class A and Class B Shares)
summary of the issuer report details.

The online help guide (available on the SEDI website by clicking ‘Help’) gives additional instructions on how to complete the report and provides examples.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

3 Issuer Information

3.3 Issuer Event Report

Section 3.3.6

Why Do I Need To File This Report?

The report notifies your insiders that an issuer event has occurred that may affect their holdings. It helps them to report accurately changes in their holdings in the securities or related financial instruments affected by the event. Whenever you file an issuer event report, an alert will appear on the screen the next time an affected insider logs on to SEDI. The alert notifies the insider an issuer event report was filed and identifies the particulars of that event.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

3 Issuer Information

3.3 Issuer Event Report

Section 3.3.7

What If I Do Not File This Report?

You are in breach of your obligations under securities legislation as a SEDI issuer. In addition, your insiders may not be able to file accurate reports reflecting changes in their securities or related financial instrument holdings arising as a result of the issuer event.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

3 Issuer Information

3.3 Issuer Event Report

Section 3.3.8

Do I File One Report Or Several Reports If A Number Of Transactions Comprise The Issuer Event?

One report can be used to report several ‘sub-events’ in connection with the same event, all happening on the same day. However, you should fully describe all pertinent ‘sub-events’ in the issuer event title and issuer report details fields.

For example, an issuer event can be an amalgamation that is composed of a share exchange and also a consolidation (of the resulting company’s) share capital. You would report the event as follows:

Issuer event: Amalgamation, merger or reorganization
Issuer event title: Amalgamation of ABC Ltd. and DEF Corp. into XYZ Ltd. and consolidation of DEF Corp. shares
Issuer report details: describe the relevant information for both the amalgamation and consolidation aspects of the event and the impact on insider holdings.

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3.3 Issuer Event Report

Section 3.3.9

What Information Do I Need To Provide In The ‘Issuer Report Details’ Field?

You need to include a description of the issuer event by providing the following information:

a description of the affected securities and related financial instruments along with their respective numbers or amounts, as disclosed in the issuer profile supplement, for that issuer
the name of the resulting issuer, if applicable
designation of all resulting securities and related financial instruments along with their respective numbers or amounts, if applicable
the exchange or conversion rates, if applicable
a description of the resulting securities and related financial instruments as created in the issuer profile supplement in SEDI, if applicable
the number of resulting securities and related financial instruments rounded up or down to the nearest share.

Include a description of the issuer event in either English or French, or both where appropriate.

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3.3 Issuer Event Report

Section 3.3.10

What If There Is Not Enough Space In The ‘Issuer Report Details’ Field To Adequately Describe The Event?

You should provide a summary of the event. However, to the extent that you need more space, consider cross-referencing a public document that adequately discloses the necessary information about the event.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

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3.3 Issuer Event Report

Section 3.3.11

Can I Provide Some Information Just To The Securities Regulators That Is Not Viewable By The Public?

Yes, you can provide additional information concerning the issuer event to staff of the securities regulatory authorities in the ‘Private remarks to securities regulatory authority’ field. The public, including the issuer’s insiders, will not have access to this information.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

The issuer grant report exemption reduces the regulatory burden on reporting insiders that is associated with insider reporting of stock options and similar instruments since it allows an issuer to make a single filing on SEDI. This filing provides the market with timely information about the existence and material terms of the grant, and makes it unnecessary for each of the affected reporting insiders to file an insider report about the grant within the ordinary reporting time periods.

It contains the information listed in question 3.4.4.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

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3.4 Issuer Grant Report

Section 3.4.2

Who Files An Issuer Grant Report?

A SEDI issuer that chooses to report details of a grant or an issue of interests in its securities and related financial instruments to insiders pursuant to a compensation arrangement.

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3.4 Issuer Grant Report

Section 3.4.3

When Do I File An Issuer Grant Report?

The deadline for an issuer to file an issuer grant report is effectively within five days [FN 7] of a grant or award. This is because the exemption in Part 6 of NI 55-104 for reporting insiders is available only when an issuer grant report is filed within the time prescribed for filing insider reports.

Reporting insiders will be in breach of their individual insider reporting obligations if the issuer has not filed the report within five days of the grant, and the reporting insiders have not filed their insider reports. We therefore recommend that the issuer file the issuer grant report as soon as reasonably practicable following the grant, award or issue of securities or related financial instruments to reporting insiders.

FN 7 Prior to November 1, 2010, within 10 calendar days.

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3.4 Issuer Grant Report

Section 3.4.4

What Information Do I Need To Provide In An Issuer Grant Report?

The issuer grant report discloses the details of a compensation arrangement and must include

the date the option or other security or related financial instrument was issued or granted;
the number of options or other securities or related financial instruments issued or granted to each director or officer;
the price at which the option or other security or related financial instrument was issued or granted and the exercise price;
the number and type of securities or related financial instruments issuable on the exercise of the option or other security or instrument; and
any other material terms that have not been previously disclosed or filed in a public filing on SEDAR.

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3.4 Issuer Grant Report

Section 3.4.5

Where Do I File An Issuer Grant Report?

Issuer grant reports are filed on SEDI.

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3.4 Issuer Grant Report

Section 3.4.6

If An Issuer Files An Issuer Grant Report, When Do The Reporting Insiders Need To File Insider Reports About The Grant?

If an issuer files an issuer grant report within five days [FN 8] of a grant, award or issue of securities or related financial instruments, the reporting insiders named in the issuer grant report can report the grant on a deferred basis. Instead of reporting the grant within the usual five day reporting timeframe, the reporting insiders have until March 31 of the next calendar year to report the grant or award.

If, subsequent to the grant and prior to March 31 of the next calendar year, the reporting insider disposes of or transfers the securities or related financial instruments identified in the issuer grant report (other than as part of a specified disposition), the reporting insider must file an insider report within five days of the disposition or transfer.

FN 8 Prior to November 1, 2010, within 10 calendar days.

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3.4 Issuer Grant Report

Section 3.4.7

What Happens If I Do Not File An Issuer Grant Report?

There is no requirement to file issuer grant reports. If an issuer chooses not to file an issuer grant report, the issuer should notify reporting insiders of a grant, award or issue of securities and related financial instruments in a timely manner so that those insiders can meet their individual reporting obligations within the period prescribed for filing insider reports.

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Reporting insiders of SEDI issuers*

Reporting insiders of SEDI issuers, and any other person required under securities legislation to file insider reports, must file insider reports in electronic format using SEDI. To file your insider reports on SEDI, you need to:

register as a SEDI user (or use a registered SEDI user as your agent) (see Part 2 Registration)
file your insider profile (see section 4.2 Insider Profile)
file your insider reports when they are due (see section 4.3 Insider Report)

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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.

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4.1 General

Section 4.1.2

Do I Have To File My Reports Myself?

No. You can have an agent that is registered as a SEDI user file the reports for you. (See Part 2 Registration)

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4.1 General

Section 4.1.3

What Do I Need To File On SEDI?

As an insider required by securities legislation to file insider reports, you (or your agent) must file on SEDI your insider profile (see section 4.2 Insider Profile) and your insider reports (see section 4.3 Insider Report).

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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.

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

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.

You can cease filing insider reports on SEDI, provided you have reported all transactions that took place when you were required to file insider reports. Also, see question 4.2.10.

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4.2 Insider Profile

Section 4.2.1

What Is An Insider Profile?

An insider profile contains information identifying you as the insider, and your relationship with one or more SEDI issuers. The information required is set out in Form 55-102F1. You must not file more than one insider profile.

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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.

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.

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4.2 Insider Profile

Section 4.2.3

What Information Do I Need To Include In My Insider Profile?

You need to include:

full legal name (if an individual insider)
company name (if not an individual insider)
full legal name of individual representative of insider (if insider is not an individual)
residential address (business address for insider’s representative, if insider is not an individual)
street name and number
municipality (city or town)
province, territory or state
postal code or zip code (if in North America)
country of residence
daytime telephone number
fax number (if applicable)
e-mail address (Note: if you would like to receive notifications of access key changes or other updates via e-mail, you will need to provide an e-mail address)
confidential question and answer (see next paragraph)
Issuer number or name of SEDI issuer
the date you became an insider of the SEDI issuer (if you have not already filed an insider report for the issuer) or the opening balance date (if you have previously filed an insider report for this issuer) (see next paragraph)
relationship with SEDI issuer
registered holders (if applicable)
date you ceased to be an insider (when applicable)

What If I Cannot Find A SEDI Issuer In The Database That I Need To Add To My Insider Profile?

You should contact the issuer to ask whether the issuer has filed its issuer profile supplement on SEDI. If the issuer has not yet done so, it may be in default of its reporting requirements and you will be unable to file an insider report on SEDI for any securities and related financial instruments of that issuer. Encourage the issuer to file its issuer profile supplement so that you can file your insider profile. You may also contact your local securities regulatory authority as soon as possible to advise them of this.

If your report is due and you cannot file your insider report on SEDI because the issuer has not filed its issuer profile supplement, you can file your report in paper form (Form 55-102F6) under the temporary hardship exemption. However, when you become aware that the issuer has filed its issuer profile supplement, you will have to re-file your insider report on SEDI. See NI 55-102, section 4.1. See questions 1.9 and 4.3.7 (temporary hardship exemption).

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4.2 Insider Profile

Section 4.2.7

Do I Need To Add The Name Of The Broker Or Depository As The Registered Holder Of The Securities If I Own The Securities Directly?

No. For insider reporting, the term “registered holder” means the entity through which you beneficially own or control securities such as an RRSP, holding company, family trust, or the person or company that owns the securities over which you have control or direction. Securities owned directly but held through a nominee such as a broker or book-based depository, are considered direct holdings. See Form 55-102F1, item 14, and Form 55-102F2, item 6.

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4.2 Insider Profile

Section 4.2.8

When Do I Need To Add Registered Holders And In What Circumstances?

Whenever you create an insider profile and file an insider report, SEDI will prompt you to indicate how you (or your insider, if you are an agent, filing for an insider) hold the securities.

You can hold your securities in the following three ways:

(1) You can hold them directly. For example, you can hold the securities in an account with your broker, but the account is in your name.

(2) You can hold them indirectly. For example, you beneficially own common shares in X Co. but the registered owner is another entity such as a holding company, an RRSP, or a family trust.

(3) You can have control or direction over them. You have control or direction over the securities if you, directly or indirectly, through any contract, arrangement, understanding or relationship or otherwise have or share

voting power, or
investment power.

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.

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4.3 Insider Report

Section 4.3.3

Do I Need To File A Separate Report On SEDI For Each Province And Territory Where I Have Insider Reporting Obligations?

SEDI is the electronic filing system for insider reporting. You need to file an insider report in all provinces and territories in which the company (or other entity) of which you are a reporting insider is a reporting issuer.

Filing an insider report on SEDI satisfies the insider reporting requirements in all provinces and territories in which you have insider reporting obligations relating to that reporting issuer.

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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].

You (or an agent on your behalf) need to file insider reports electronically on SEDI, unless you are exempt from insider reporting requirements under provincial securities legislation or an order of the relevant securities regulatory authority. In certain circumstances, however, you may need to file insider reports in paper format rather than on SEDI. These would include:

(1) Reporting insider of a non-SEDI issuer – You are a reporting insider of a non-SEDI issuer (i.e., a foreign reporting issuer who has not elected to file disclosure documents on SEDAR) that is required by securities legislation to report insider transactions and you are not otherwise exempt from the insider reporting requirements;

(2) Report by Registered Holder – You are a registered holder of voting securities of an issuer and you know the beneficial owner (or in Quebec the person who has control or direction over such securities) is a reporting insider that is required by securities legislation to report insider transactions but this insider has not filed a report of the ownership or control (except where there was a transfer for giving collateral for a genuine debt);

(3) General Exemption – You are granted a discretionary exemption from filing insider reports on SEDI by the relevant securities regulators, upon application under NI 55-102, Part 6. Depending on the circumstances, one of the conditions to that exemption may be that you file insider reports in paper format;

(4) Unanticipated Technical Difficulties (Temporary) – You are having unanticipated technical difficulties, i.e., SEDI is unavailable due to technical problems with SEDI, when trying to file your insider report in electronic format;

(5) No Issuer Profile Supplement (Temporary) – You are the insider of a SEDI issuer that has not yet filed its issuer profile supplement and your insider report is due.

Note that (4) and (5) are only temporary exemptions from filing on SEDI. They are available to insiders. (However, for issuers, please see the exemption in the answer to question 3.1.10.) You need to file the report in paper format using Form 55-102F6. See question 1.9 for further details.

What Do I File If I Am An Insider Of A U.S. Issuer That Is A Registrant With The Sec And I File Insider Reports With The Sec?

Generally, you need to file your reports on SEDI if that issuer files disclosure documents on SEDAR.

However, you do not need to file insider reports if:

the issuer is a “U.S. issuer” under National Instrument 71-101, The Multijurisdictional Disclosure System that has securities registered under the United States Securities Exchange Act of 1934, or
the issuer is a “SEC foreign issuer” under National Instrument 71-102, Continuous Disclosure and Other Exemptions Relating to Foreign Issuers (NI 71-102)

and you comply with the U.S. federal securities law regarding insider reporting and you file the required reports with the SEC.

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4.3 Insider Report

Section 4.3.12

What do I file if I am an insider of a Designated Foreign Issuer under NI 71-102?

Generally, the insider reporting requirement does not apply to an insider of a Designated Foreign Issuer provided you comply with the disclosure requirements related to insider reporting in the jurisdiction where the foreign issuer is regulated. See Part 5 of NI 71-102.

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4.3 Insider Report

Section 4.3.13

What Is The Significance Of The Codes Used On SEDI?

It is important to use the correct codes to avoid any uncertainty as to the nature of your transaction and to avoid misleading the marketplace.

You use codes to describe:

the type of the transaction you are reporting (nature of transaction),
the type of ownership or other interest you have of the securities, and
your relationship with the issuer

For a current list, see the instruction page of Form 55-102F6 (available on SEDI though the on-line help and the securities regulatory authorities’ websites -see Appendix A).

CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI

For further explanation of related financial instruments and economic interest, see Part 1 of Companion Policy 55-104CP.

Important note: SEDI does not use the term “related financial instrument”. Instead, for the purposes of SEDI, all instruments – whether securities or related financial instruments – are considered securities. For the purposes of SEDI, the category of “security” includes two subcategories relating to derivatives:

“Issuer derivatives” are derivatives issued by the issuer. Issuer derivatives include options, warrants, rights and special warrants issued by an issuer. Share-based compensation instruments, including phantom stock units, deferred share units (DSUs), restricted share awards (RSAs), performance share units (PSUs), stock appreciation rights (SARs) and similar instruments are also generally issuer derivatives. The issuer designates these derivatives in its issuer profile supplement.
“Third party derivatives” are derivatives offered by someone other than the issuer. The price, value or payment obligations of third party derivatives are based on an underlying interest (such as common shares) issued by the issuer as the underlying security. Third party derivatives include exchange-traded options or over-the-counter (OTC) options.

Please refer to the derivatives section in the online help on SEDI for additional information about derivatives reporting.

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4.5 Reporting Transactions

Section 4.5.1

How Does An Issuer That Is An Insider Report Transactions Under A Normal Course Issuer Bid?

Under NI 55-104 an issuer can report acquisitions in connection with normal course issuer bids (as defined in NI 55-104) within 10 days of the end of the month in which the acquisitions occurred, as opposed to within five calendar days [FN 13] of the transaction. NI 55-104 requires you to report each acquisition.

We recommend that you report transactions under a normal course issuer bid within 10 calendar days of the end of the month, in the following manner.

Step 1:

Report each acquisition of securities that took place under the normal course issuer bid as a separate transaction, with the appropriate nature of transaction code 38 Redemption/retraction/cancellation/repurchase.

Step 2:

Report each cancellation of securities acquired under the normal course issuer bid as a separate transaction using the relevant nature of transaction code 38 Redemption/retraction/cancellation/repurchase.

FN 13 Prior to November 1, 2010, within 10 calendar days.

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4.5 Reporting Transactions

Section 4.5.2

How Do I Report Acquisitions Under An Automatic Securities Purchase Plan (Including Employee Share Ownership Plans (Esop) And Dividend Reinvestment Plans (Drip))?

Any securities acquired under an 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, must be reported on or before March 31 of the next calendar year. You should report acquisitions under your automatic share purchase plan using the nature of transaction code 30 for each transaction.

Any securities acquired under an automatic securities purchase that are subsequently disposed of or transferred, other than as part of a specified disposition of those securities, must be reported within five days [FN 14] of the disposition or transfer.

How Do I Report Share-Based Compensation (Other Than Options) Such As Deferred Share Units (Dsus), Restricted Share Awards (Rsas), And Stock Appreciation Rights (Sars)?

One of the most common forms of share-based compensation is granting options that, upon exercise, are converted into the issuer’s common shares. However, there are other types of share-based compensation. For example, restricted share awards (RSAs) and deferred share units (DSUs) entitle recipients to an award of the issuer’s common shares after a specified period or cash payments based on the value or growth in value of the issuer’s common shares over a specified period. In contrast, stock appreciation rights (SARs) typically only entitle employees to cash payments based on the value or growth in value of the issuer’s common shares over a specified period.

Historically, there has been some uncertainty as to whether, as a matter of law, certain derivative instruments involving securities are themselves securities. Under NI 55-104, it is not necessary to determine whether a particular