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Issuer Regulation

Insiders FAQ

The term "insider" is defined in section 1 of the Securities Act. For the purposes of insider reporting requirements, “reporting insiders” as defined in section 1.1 of National Instrument 55-104 must file insider reports. Note that there are additional obligations and prohibitions on “insiders” as defined in the Securities Act, such as the important prohibition on illegal insider trading.

You must report:

  1. beneficial ownership of, or control or direction over, whether direct or indirect, securities of a reporting issuer, and
  2. interest in, or right or obligation associated with, a related financial instrument involving a security of a reporting issuer.

For questions and answers on insider reporting and the System for Electronic Disclosure by Insiders (SEDI), refer to CSA Staff Notice 55-316. For more information on National Instrument 55-104, see CSA Staff Notice 55-315. You can find more information about insider reporting guidelines for certain derivative transactions in CSA Staff Notice 55-312.

The term “control person” is defined in section 1 of the Securities Act and generally means, a person, or combination of persons, who holds a sufficient number of the voting rights attached to all outstanding voting securities of an issuer to affect materially the control of the issuer. Note that, if a person, or combination of persons, holds more than 20 per cent of such voting rights, they are deemed, in the absence of evidence to the contrary, to be a control person. Consult your company's legal counsel if you are in doubt as to your position.

It depends on which prospectus exemption you are using to trade your securities. If you are using the exemption in section 2.8 of NI 45-102 Resale of Securities, then you must provide at least seven days notice of your intention to sell by filing a completed and signed Form 45-102F1 Notice of Intention to Distribute Securities under Section 2.8 of NI 45-102 Resale of Securities on SEDAR and with the Canadian exchange on which the securities are listed. See NI 45-102 Resale of Securities.

A control person selling securities must file an insider report on SEDI within three calendar days of each sale of the securities that are referred to in the Form 45-102F1 that the control person is required to file. See section 2.8 of NI 45-102.

Prohibitions against trading when a material fact or material change has not been generally disclosed are set out under section 57.2 of the Securities Act. This section prohibits persons who are in a "special relationship" (defined under section 3 of the Act) with the issuer, and who know of a material fact or material change that has not been generally disclosed, from:

  • purchasing or selling securities of the issuer
  • recommending or encouraging another person to purchase or sell securities of the issuer
  • informing another person of the material fact or material change.

National Policy 51-201 Disclosure Standards, outlines best practice disclosure standards. Sections 6.9 and 6.10 of the policy suggest that issuers should provide for trading "blackout periods," including a quarterly quiet period during which no earnings guidance or comments with respect to about the current quarter's operations or expected results will be provided to analysts, investors or other market professionals.