From the Regulators

Online reporting system adds transparency

By IE Staff |

Starting June 9, insider trade reports to all Canadian securities jurisdictions will be made via the System for Electronic Disclosure by Insiders, eliminating paper-based reporting systems for virtually all insider trades.

SEDI will improve public access and add transparency to insider trade reporting by making information about these insider trades available to investors electronically for all jurisdictions in Canada.

SEDI will first bring issuers online starting May 5, then bring insiders online starting June 9.

The system will also provide greater convenience to market participants. The filing requirements are listed in National Instrument 55-102 -The System for Electronic Disclosure by Insiders (SEDI) and in the Canadian Securities Administrators' Staff Notice 55-309 Launch of the System for Electronic Disclosure by Insiders (SEDI) and Other Insider Reporting Matters.

"With the introduction of SEDI, insider reports will be publicly available on a more timely basis," said Steve Sibold, chair of the Canadian Securities Administrators. "Insiders will be able to file their reports on SEDI 24 hours a day, seven days a week."

By filing through SEDI, an insider will satisfy the securities legislation of all CSA jurisdictions that have insider reporting requirements. Filing deadlines are harmonized in all jurisdictions, generally requiring all insiders to report trades within 10 days of the transaction.

Investors will be able to get insider reports 24 hours a day, seven days a week, at no charge. Investors will be able to access reports such as:
  • a weekly summary of all transactions filed in SEDI in the preceding week;
  • the details of individual transactions by insiders;
  • a list of insiders who have registered for each SEDI issuer and the closing balance of all that issuer's securities they hold; and
  • an "issuer event history", which includes a stock dividend, stock split, consolidation, amalgamation, reorganization, merger or other similar event reported on SEDI.
SEDI will provide a higher level of convenience for insiders, who need file only one report to comply with all provincial regulations, and can file 24 hours a day, seven days a week, subject to maintenance requirements. Insiders will not be required to pay any filing fees.

Starting with reports due on or after June 9, 2003, all insiders of "SEDI issuers" will be required to file their insider reports on SEDI. The National Instrument defines SEDI issuers to mean reporting issuers, other than mutual funds, that file disclosure documents in electronic format through SEDAR - essentially all Canadian public companies.

Individual insiders, representatives of company insiders or authorized agents acting on behalf of these insiders will first be required to register to use SEDI. Insiders who are not likely to need to file insider trade reports in the immediate future are encouraged to register only a few days in advance of their first anticipated filing.

SEDI issuers will be required to register and provide information related to their outstanding securities in the period between May 5 and May 30.

SEDI issuers will have a new obligation to file a report in SEDI one day after the occurrence of an "issuer event," which includes a stock dividend, stock split, consolidation, amalgamation, reorganization, merger or other similar event; this information will be used by insiders to update information about their insider holdings.

There are no service charges payable by insiders for filing in SEDI or by the public for accessing information filed in SEDI. All reporting issuers that are required to file through SEDAR are being notified of changes to SEDAR's annual filing service charges for the implementation of SEDI.