Insider Reporting – Securities Regulation

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You can grab notes on other topic from here.

Insider: big shareholders, managers, directors ^ people that have information

POLICY: we actually want insiders to have skin in the game (e.g. need escrow arrangements with an IPO so they can’t sell right away – (61(2)(g) – director can refuse to issue receipt)

  • They should be able to buy and sell, but not when it’s based on information not available to the public. Therefore, if you’re an insider and you’re buying or selling, that’s fine if you tell everyone.
  • Why do insiders have to disclose? Because investors want to know if insiders are trading (if they don’t believe in company, why should you?); ultimately increases confidence in sec market
  1. Analysis: When do insider reporting rules apply?
  • Are you an insider of a reporting issuer? If yes,

o Insider: 1(1): Director or officer of reporting issuer, (b) director or officer of a person or

company that is an insider or a subsidiary of the RI, (c) someone who (i) owns 10% of the voting shares (excluding underwriters), (d) a RI that has purchased, redeemed or otherwise acquired a security of its own issue for as long as it holds it, (e) designated as an insider under ss 11

  • Comply with proper disclosure:

o File a report within 5 days of becoming one: to disclose any ownership and any interest in, or right or obligation associated with, a related financial instrument, and make any other disclosure required by the regulations (price you bought/sold them at) (107(1) and 3.2 of NI 55-104)

  • Have to say (a) i am an insider, (b) how you’re an insider, (c) file a report within 10 days of becoming one indicating that you bought/sold, the price, quantity and date

o If you already are one, have to file report within 10 days of change in your holdings: Also have to disclose if there is any change in your ownership (107(2))

  • Have to say (a) i am an insider, (b) how you’re an insider, (c) file a report within 10 days of becoming one indicating that you bought/sold, the price, quantity and date

You can grab notes on other topic from here.


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