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

1. General

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.

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, your ongoing obligation is:

• 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.

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.

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).

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

contact the SEDI Technical Service Desk toll-free at 1-800-219-5381 for assistance in English or French.

If you have questions relating to the substantive legal insider reporting requirements in NI 55104 you should seek legal advice.

SEDI issuers have to pay an annual service charge related to SEDI. (See question 3.1.9 for more detailed information on fees payable by SEDI issuers.) There are no service charges payable either by insiders for filing on SEDI or by the public for accessing information filed on the SEDI website (www.SEDI.ca).

Go to the SEDI website at www.SEDI.ca. On the introductory page of the website, select the language in which you wish to use the site, either French or English. A ‘Welcome to SEDI’ page will then appear. If you want to search for information filed on SEDI, click on the ‘Access public filings’ link. If you need to file information for the first time, you must register as a SEDI user by clicking on ‘Register as a SEDI user’. For more information on registering, please see section 2.1 General under Part 2 Registration.

Insider reports must be filed on the SEDI website (www.SEDI.ca).

You can use SEDI 24 hours a day, seven days a week to make filings once your SEDI user account has been activated, subject to service interruptions for system maintenance.

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.

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.

You can find the legal requirements for SEDI, including the requirement to create an Insider Profile and file insider reports on the SEDI website (www.SEDI.ca), in NI 55-102 and related materials.

You can find both the legal requirements and exemptions for reporting by insiders in NI 55-104. In Ontario, the principal insider reporting requirements are in Part XXI of the Securities Act (Ontario), but are substantially harmonized with the insider reporting requirements set out in NI 55-104. See Appendix A for a list of the securities regulatory authorities with their contact information and website addresses.

The consequences of non-compliance can be serious. If you are uncertain about your legal obligations, you should seek advice from legal counsel that practises securities law.

You can get information from the SEDI website itself at www.SEDI.ca. It has an online help function which contains a list of frequently asked questions (FAQs), factsheets containing helpful hints, detailed guidance and additional information.

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.

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.

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.