CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI
4 Insider Information
4.4 Reporting for Related Financial Instruments
Section 4.4.1

What Is a Related Financial Instrument?

A related financial instrument is an instrument, agreement, security or, in some jurisdictions an exchange contract, that has a value based on, derived from, or otherwise referenced to the value, market price or payment obligations of a security. The term also includes any other type of instrument, agreement or understanding that affects, whether directly or indirectly, a person or company’s economic interest in a security or exchange contract.

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.


CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI
4 Insider Information
4.4 Reporting for Related Financial Instruments
Section 4.4.2

What Related Financial Instruments Do I Need To Report On SEDI?

You need to report all of your interests in, or rights or obligations associated with, related financial instruments in accordance with the requirements of securities legislation. For guidance on reporting related financial instruments and economic interest, see Part 1 of Companion Policy 55-104CP.


CSA Staff Notice 55-316 Questions and Answers on Insider Reporting and SEDI
4 Insider Information
4.4 Reporting for Related Financial Instruments
Section 4.4.3

What Is An Underlying Security And How Do I Report It?

An underlying security is a security you would acquire or dispose of if you exercised the rights you acquired when you purchased a different security. For example, if you have options that are exercisable into common shares, the common shares are the “underlying securities”. On SEDI, you must report both the initial securities you acquired and their underlying securities and related financial instruments.

Example: You were granted options under your company’s stock option plan. The options are convertible into common shares on a 1:1 basis when you exercise your options.

You must report the grant as follows:

  • Report the number of options granted as an acquisition. Use nature of transaction code 50 to report the acquisition. Report the equivalent number of underlying securities acquired. Enter the date of the transaction, the grant price, etc. and then go through the steps required to certify and file your report.

If you exercise the options, you must report the exercise as follows:

  • Report the number of options being exercised as a disposition. Use nature of transaction code 51 to report the disposition. Enter the date of the transaction, the exercise price, etc. and then go through the steps required to certify and file your report.
  • Show an acquisition of the underlying security (e.g., common shares) equal to the appropriate number of options exercised. Use nature of transaction code 51 to report the acquisition of the common shares.
  • If you subsequently sell the common shares, you must file a separate report for the sale.