BCN 2001/31 - Adoption of National Instrument 55-101 Exemption from Certain Insider Reporting Requirements and Revocation of Local Policy Statement 3-14 [BCN - Rescinded]
The Commission and other members of the Canadian Securities Administrators (“CSA”) have adopted National Instrument 55-101 Exemption from Certain Insider Reporting Requirements and Companion Policy 55-101CP, effective May 15, 2001.
The Commission also rescinded Local Policy Statement 3-14 Applications for Insider Reporting Exemptions, effective May 15, 2001. LPS 3-14 set out guidelines for applications for exemptions from insider reporting obligations. The exemptions in the National Instrument replace those guidelines.
The full text of the new documents and consequential amendments to the Securities Rules (B.C. Reg. 138/2001 and 139/2001) are attached to this notice.
The CSA published drafts of the National Instrument and Companion Policy for comment in June 2000 (see NIN 2000/23) and previously in August 1999 (see NIN 99/29). We published a summary of the comments received and the response of the CSA with our advance notice of the adoption of the National Instrument (see BCN 2001/11).
The CSA had planned to enact the National Instrument at the same time as proposed National Instrument 55-102 System for Electronic Disclosure by Insiders (SEDI). SEDI will establish an electronic filing system for insider trading reports. SEDI has been delayed until fall, 2001. The CSA has decided to proceed with the National Instrument rather than wait for SEDI.
Substance and Purpose of the National Instrument
The National Instrument provides the following exemptions from the obligation to file insider reports under Canadian securities legislation:
- It exempts some directors and senior officers of subsidiaries of a reporting issuer, and of corporate affiliates of insiders from filing insider reports where they don’t hold the securities of the reporting issuer in significant amounts and can’t acquire knowledge of undisclosed material information.
- It generally permits directors and senior officers of a reporting issuer, or a subsidiary of the reporting issuer, to annually report acquisitions under automatic securities purchase plans.
- It permits issuers buying their own securities under normal course issuer bids to report acquisitions monthly. This exemption is not currently required in British Columbia since it is the same as the requirement to file all insider reports. Other jurisdictions such as Ontario, Alberta and Quebec require reporting within 10 days after the transaction. Once SEDI is operating, the Commission will reduce the insider reporting period to 10 days after the transaction. Issuers in British Columbia will then be able to use this exemption.
- It permits insiders to wait until their next insider report to report changes in their holdings resulting from an issuer event, such as a stock dividend, stock split, consolidation, amalgamation, reorganization or merger.
We made consequential amendments to the Securities Rules to be consistent with the National Instrument. In particular, the Commission repealed section 160 of the Securities Rules effective May 15, 2001 as Parts 5 and 7 of the National Instrument replace it.
Please refer questions to:
Senior Legal Counsel, Policy and Legislation
British Columbia Securities Commission
or (800) 373-6393 (in B.C.)
May 10, 2001
Douglas M. Hyndman
Ref: NIN 99/29
This Notice may refer to other documents. These documents can be found at the B.C. Securities Commission public website at www.bcsc.bc.ca in the Commission Documents database or the Historical Documents database.