Securities Law

BCN 2003/16 - Adoption of Amendments to National Instrument 55-102 System for Electronic Disclosure by Insiders (SEDI) and BC Instrument 55-505 Interim Requirements during the Launch of the System for Electronic Disclosure by Insiders (SEDI) [BCN - Rescinded]

Published Date: 2003-05-02
Effective Date: 2003-05-02
Related Document(s):

Introduction
The Commission, together with the other members of the Canadian Securities Administrators (the CSA or we), are amending National Instrument 55-102 System for Electronic Disclosure by Insiders (SEDI), the related forms and companion policy.  The amendments are effective April 29, 2003.

We published the amendments for comment on December 20, 2002. We received no comments.

In addition, the Commission has made BC Instrument 55-505, effective May 5, 2003.  This Instrument provides temporary exemptions from the requirements to electronically file insider reports and related insider and issuer information during the launch of the System for Electronic Disclosure by Insiders (SEDI).

SEDI first went live on October 29, 2001 and became fully operational on January 21, 2002.  On January 31, 2002, SEDI was shut down due to technical difficulties.  On February 7, 2002, the Commission issued BC Instrument 55-503 Interim Requirements during the Suspension of SEDI to exempt SEDI issuers and insiders from their filing requirements under NI 55-102 System for Electronic Disclosure by Insiders (SEDI) during the period SEDI was not operational.

On April 11, 2003, the Commission published CSA Staff Notice 55-309 Launch of the System for Electronic Disclosure by Insiders (SEDI) and Other Insider Reporting Matters announcing that SEDI will be launched beginning May 5, 2003. The launch will use the staged implementation process described in that notice.  To facilitate an orderly staged implementation of the filing obligations of SEDI issuers and insiders, the Commission is issuing BC Instrument 55-505.

During the period between May 5, 2003 to May 30, 2003, the Commission recommends that SEDI issuers register on SEDI and file their issuer profile supplements early so that they may fulfill their filing obligation before the temporary exemption from that filing requirement under this BC Instrument 55-505 expires.

The full text of all the amendments (B.C. Reg. 183/2003) to the instrument, related forms, and companion policy, and the BC Instrument are attached to this notice.

With this notice, the Commission is repealing BC Instrument 55-503 and BC Notice 2002/09 on May 5, 2003. 

Summary of amendments
In summary, the amendments:

  • add a new issuer profile supplement filing requirement for issuers that filed an issuer profile supplement on SEDI on or before January 31, 2002
  • expand the temporary hardship exemption
  • reduce the issuer profile supplement securities designation requirements by requiring issuers to designate only their outstanding securities that are held by insiders.

Key amendments

1. Issuer profile supplement filing requirement
We have added Part 9 - Filing of Issuer Profile Supplement to NI 55-102. This new part requires a SEDI issuer that filed an issuer profile supplement on or before January 31, 2002 to file a new and current issuer profile supplement.  The BC Securities Commission specified this date in CSA Staff Notice 55-309 on April 11, 2003.

2. Expansion of the temporary hardship exemption
We added subsection (6) to section 4.1 of NI 55-102 to create a new temporary hardship exemption if further unanticipated technical difficulties prevent the timely filing of an amended insider profile, issuer profile supplement, amended issuer profile supplement, or issuer event report.  The exemption is available as long as insiders or issuers file the relevant report as soon as practicable after the unanticipated technical difficulties are resolved.

In addition, we amended the instrument to remove the requirement for an insider to file a power of attorney with any insider report filed in paper format by the agent of an individual insider using the temporary hardship exemption, because all insiders (or their agents) must still re-file their insider reports on SEDI. Their agency relationship should already be registered on SEDI.

However, for any insider that is not required to use SEDI for filings and files in paper format, the agent of an individual insider is still required to file a power of attorney with the insider report, as required in the instructions to Form 55-102F6. 

3. Designation of issuer’s securities held by insiders
The amendments to paragraph (a) of subsection 2.3(3) of NI 55-102 require a SEDI issuer to file an amended issuer profile supplement in SEDI format to add a security it has not previously designated, only if an insider is a holder of that security. The rule currently requires a SEDI issuer to amend its issuer profile supplement every time it issues a new security, even if an insider does not hold it.

We made corresponding amendments to Form 55-102F3 Issuer Profile Supplement.

Form 55-102F1 Insider Profile and Form 55-102F2 Insider Report

Item 11 - Date the insider became an insider or date of previous paper filing

We amended Item 11 of Form 55-102F1 to change certain dates an insider must report. Insiders must now provide either the date the insider became an insider or the opening balance date. This opening balance date will be used as the date for all opening balances of securities of this reporting issuer. The opening balance date should be before the date of any transactions that any insider will report for this reporting issuer on SEDI.

The change addresses the situation where a transaction is filed on SEDI with an earlier date than the transaction date shown in the opening balance. As a result, without this amendment, SEDI’s balance calculation formula provides an incorrect balance.

We made a corresponding change to Form 55-102F2 Insider Report for initial SEDI reports.
 
Form 55-102F6 Insider Report (Paper)

List of Codes

We amended the list of codes to add the following nature of transaction codes:

Exercise for cash - 59

Correction of information - 99

Code 59 is added to clarify that these options were not exercised for securities but for cash. Code 99 is added to clarify on the published summaries of reports that the insider report is a corrected one.

Companion Policy Statement 55-102CP

We amended Schedule A to the companion policy to clarify that the securities regulatory authority or regulator will not make certain personal information of an insider reported on Form 55-102F6 Insider Report - Paper, available to the public.

This is consistent with the approach taken for information reported on SEDI.

Questions
For further information please see CSA Staff Notice 55-309.  Questions relating to this notice and BCI 55-505 may be referred to:

Pamela J. Egger
Senior Legal Counsel
Corporate Finance
British Columbia Securities Commission
(604) 899-6867
(800) 373-6393 (in B.C. or Alberta)
pegger@bcsc.bc.ca


May 2, 2003

 


Douglas M. Hyndman
Chair

Ref: National Instrument 55-102 System for Electronic Disclosure by Insiders (SEDI)
 Companion Policy 55-102CP
 Form 55-102F1, Form 55-102F2, Form 55-102F3, and Form 55-102F6
BCI 55-503 Interim Requirements during the Suspension of the System for Electronic Disclosure by Insiders (SEDI)
Canadian Securities Administrators’ Staff Notice 55-309 Launch of the System for Electronic Disclosure by Insiders (SEDI) and Other Insider Reporting Matters
BCI 55-505 Interim Requirements during the Launch of the System for
Electronic Disclosure by Insiders (SEDI)


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.

 


Schedule


1.1 Paragraph 2.3 (3) (a) of National Instrument 55-102 System for Electronic Disclosure by Insiders (SEDI), B.C. Reg. 230/2001, is repealed and the following substituted:

(a) the SEDI issuer issues any security or class of securities to any insider of the SEDI issuer, unless that issuance has already been disclosed in its issuer profile supplement;

1.2 (a) Section 4.1 of the National Instrument is amended by repealing subsection (3) and substituting the following:

(3) The requirements of securities legislation relating to paper format filings of insider reports apply to a filing under subsection (1) except that signatures to the paper format document may be in typed form rather than manual format and an agent may sign the paper format document on behalf of an insider who is an individual without filing a completed power of attorney.

(b) Section 4.1 of the National Instrument is amended by adding the following subsection:

(6) Despite subsection 2.1 (3) and sections 2.3 and 2.4, if unanticipated technical difficulties prevent a SEDI filer from filing an issuer profile supplement, an amended issuer profile supplement, an issuer event report or an amended insider profile within the specified time, the SEDI filer shall file such document as soon as practicable after the unanticipated technical difficulties have been resolved.

1.3 The National Instrument is amended by adding the following Part:

PART 9 - FILING OF ISSUER PROFILE SUPPLEMENT

9.1 Filing of Issuer Profile Supplement

(1) A SEDI issuer that filed an issuer profile supplement in SEDI format on or before January 31, 2002 shall file a new and current issuer profile supplement in SEDI format not later than the date specified by the regulator under subsection (2).

(2) For the purposes of subsection (1), the regulator may specify a period and that period must
(a) begin no earlier than the date that the notice is published under subsection (3), and
(b) be at least 18 days in length.

(3) After specifying a period under subsection (2), the regulator shall
(a) publish a notice specifying the date the period ends and the filing requirement under subsection (1), and
(b) issue a press release summarizing the notice given under paragraph (a).

1.4 (a) Form 55-102F1 Insider Profile of the National Instrument is amended by striking out the title of item 11 and substituting “Date the insider became an insider or date of opening balance”.

(b) Form 55-102F1 Insider Profile of the National Instrument is amended by striking out in item 11 “Alternatively, if the insider has previously filed an insider report in paper format in respect of the reporting issuer, provide the date of the insider’s last paper filing in respect of the reporting issuer” and substituting “Otherwise, provide an opening balance date.  This opening balance date will be used as the date for all opening balances of securities of this reporting issuer.  The opening balance date should be a date prior to the date of any transactions that will be reported for this reporting issuer in SEDI”.

(c) Form 55-102F1 Insider Profile of the National Instrument is amended in the part titled Notice - Collection and Use of Personal Information by striking out “Saskatchewan Securities Commission” and “800-1920 Broad Street” in the address for the Saskatchewan Securities Commission and substituting “Saskatchewan Financial Services Commission, Securities Division, 6th Floor, 1919 Saskatchewan Drive”.

1.5 (a) Form 55-102F2 Insider Report of the National Instrument is amended by striking out in item 8 “The “date of the transaction” will be the date the insider became an insider or the date of the previous filing, whichever has been reported in the insider profile.” and substituting “The “Opening/initial balance date” will be the date the insider became an insider or the date the insider entered for all opening balances for securities of this issuer.”.

(b) Form 55-102F2 Insider Report of the National Instrument is amended in the part titled Notice - Collection and Use of Personal Information by striking out “Saskatchewan Securities Commission” and “800-1920 Broad Street” in the address for the Saskatchewan Securities Commission and substituting “Saskatchewan Financial Services Commission, Securities Division, 6th Floor, 1919 Saskatchewan Drive”.

1.6 (a) Form 55-102F3 Issuer Profile Supplement of the National Instrument is amended by striking out in item 7 “being profiled” and substituting “that is held by an insider of the reporting issuer who has direct or indirect beneficial ownership of, or control or direction over, that security or class of security”.

(b) Form 55-102F3 Issuer Profile Supplement of the National Instrument is amended in the part titled Notice - Collection and Use of Personal Information by striking out “Saskatchewan Securities Commission” and “800-1920 Broad Street” in the address for the Saskatchewan Securities Commission and substituting “Saskatchewan Financial Services Commission, Securities Division, 6th Floor, 1919 Saskatchewan Drive”.

1.7 (a) Form 55-102F6 Insider Report of the National Instrument is amended by adding the following nature of transaction code to the List of Codes - Issuer Derivatives:

Exercise for cash  59

(b) Form 55-102F6 Insider Report of the National Instrument is amended by adding the following nature of transaction code to the List of Codes - Miscellaneous:

Correction of information 99

(c) Form 55-102F6 Insider Report of the National Instrument is amended by striking out “Saskatchewan Securities Commission” and “800-1920 Broad Street” in the address for the Saskatchewan Securities Commission and substituting “Saskatchewan Financial Services Commission, Securities Division, 6th Floor, 1919 Saskatchewan Drive”.

 


Amendments to Companion Policy 55-102CP
to National Instrument 55-102
System for Electronic Disclosure by Insiders
(SEDI)

PART 1 - AMENDMENTS

1.1 Schedule A to Companion Policy 55-102CP is amended by adding the following paragraph at the end of Schedule A:

“Form 55-102F6 Insider Report

The following information filed in Form 55-102F6 Insider Report will not be made available for public inspection:

1. Insider’s address including postal code but excluding municipality (city, town, etc.), province, territory, state and/or country (Box 3)

2. Insider’s telephone number (Box 3)

3. Insider’s fax number (Box 3)

4. Correspondence in English or French”