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Insider Trading in Canada

In Canada, insider trading provisions were first introduced at the federal level in 1970 as part of the Canada Corporations Act. They were subsequently carried over into the The Canada Business Corporations Act (The Act).

According to the provisions an "insider" is defined as a director or officer of a distributing corporation, a distributing corporation that purchases or otherwise acquires its own shares (except a redemption of redeemable shares) or shares issued by an affiliate, or a person who beneficially owns more than 10% of the shares of a distributing corporation or who exercises control or direction over more than 10% of the votes attached to shares of such a corporation.

A person is required to send a report to the Director under the CBCA within 10 days after the end of the month in which he or she becomes an insider of a distributing corporation. Additional insider reports are required within 10 days following the end of the month in which there is any change in the person's interest in the securities of a distributing corporation.

Any person who fails to file an insider trading report is subject to a maximum fine of $5,000 and/or to imprisonment for a term of up to six months.

The Act prohibits insiders from selling shares that they do not own (short selling) and from buying or selling a call option or put option in respect of a share of a distributing corporation of which they are insiders.

Under the provisions, insiders who make use of specific confidential information for their own benefit in connection with a transaction in the securities of a corporation (whether distributing or non-distributing) are liable to compensate anyone who suffers a direct loss as a result. They are also accountable to the corporation for any direct benefit or advantage they receive.

More information can be found in this Canadian Parliamentary Research Branch article on insider trading in Canada.

Insider Trading Data in Canada

Investors can find insider trading data in Canada from The System for Electronic Disclosure by Insiders (SEDI). SEDI is Canada's 24-hour on-line, browser-based service for the filing and viewing of accurate and timely insider trading reports as required by various provincial securities rules and regulations. SEDI replaces paper-based reporting and provides for a more efficient and timely disclosure process.

SEDI was established by the Canadian Securities Administrators, an umbrella organization of the thirteen provincial and territorial securities regulators. SEDI is operated by CDS INC., a subsidiary of The Canadian Depository for Securities Limited, Canada's national securities clearing, depository and settlement body.

Investors can query insider trading data through View Insider Information page on SEDI.