What is an insider?
The term "insider" is defined in section 1 of the Securities Act. For 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.
What must insiders report?
You must report (a) beneficial ownership of, or control or direction over, whether direct or indirect, securities of a reporting issuer, and (b) 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.
What is a control person?
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% 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.
As a control person, how much notice do I have to provide before I can start selling securities?
You must provide at least 7 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. Ref: NI 45-102 Resale of Securities.
What is the insider reporting deadline for a control person?
A control person selling securities must file an insider report on SEDI within 3 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.
Are there any prohibitions against trading in securities of an issuer when the issuer's quarterly financial results are about to be released?
Prohibitions against trading when a material fact or material change has not been generally disclosed are set out under section 57.2 of 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.
Need help with your insider report filing or need to report insider reporting, trading, tipping, or recommending violations?
Email email@example.com, or call 604-899-6854 or toll free in BC and Alberta 1-800-373-6393.