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

Under Canadian securities legislation, certain insiders

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55-310 Questions and Answers on the System for Electronic Disclosure by Insiders (SEDI), which have been or will be withdrawn in the various CSA jurisdictions.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

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.

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;

(c) a person or company responsible for a principal business unit, division or function 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