The Ontario Securities Commission is proposing amendments to rules regarding employees trading in shares of their employers. The changes are designed to address certain technical problems with the rules.
The changes would affect multi-lateral instruments 45-105 and 45-801.
In the proposal, the OSC notes that although the stated purpose of the new rules was to “consolidate and, as much as possible, harmonize the former instruments, we are now aware that certain exemptions from the dealer registration requirement and the prospectus requirement may not be available under the [new] instrument.”
In particular, an exemption from the dealer registration requirement and the prospectus requirement may not be available for a trade in an issuer’s security to an employee, senior officer, or director, if the plan administrator acquired the security on the secondary market. And, an exemption from the dealer registration requirement and the prospectus requirement may not be available for “cross-trades” by plan administrators.
The amendments aim to fix these problems.