The Canadian Securities Administrators (the "CSA") has announced that the System For Electronic Disclosure by Insiders (referred to as "SEDI"), which was briefly operational in late 2001 but suspended due to technical difficulties, will be launched again on May 5, 2003. SEDI will fundamentally change the manner in which insider reporting is performed in Canada as reports will be filed electronically with one filing and not by telecopy to various securities commissions. Investors will be able to access the data promptly by date, company name, name of insider and class of security. SEDI mandates (subject to certain limited exceptions) that "SEDI issuers" (see definition below) file and disseminate insider reports electronically by way of a software application. Unlike SEDAR, no special software is required for SEDI and insider reports may be filed by anyone over a website accessed through commonly available web browsers www.sedi.ca).
National Instrument 55-102 defines "SEDI issuers" as reporting issuers, other than mutual funds, that are required to file disclosure documents in electronic format through SEDAR. Prior to any insider reports being filed on SEDI, certain information pertaining to the SEDI issuer and insiders of the SEDI issuer must be filed electronically.
In SEDI, any individual wishing to access the system to make a filing must register with CDS, Inc. Individuals will be able to register by accessing www.sedi.ca and completing the online insider profile registration form. For security purposes, individuals will also be required to sign a paper copy of a registration form and deliver the signed copy to CDS, Inc. by prepaid mail, personal delivery or facsimile for verification.
Please note that any data filed by issuers in SEDI between October 29, 2001 to January 31, 2002 will not be available and as a result, new insider profiles and issuer profile supplements will have to be filed in accordance with the launch dates set out below.
Issuer Profile Supplements
Before May 5, 2003, all SEDI issuers must update their SEDAR profile in order for SEDI to contain current information. For issuers that become SEDI issuers between May 5, 2003 and May 30, 2003, the deadline for creating and updating their SEDAR profile is extended until May 30, 2003.
From May 5, 2003 to May 30, 2003, all SEDI issuers must file an issuer profile supplement through SEDI. Reporting issuers that become SEDI issuers on or after May 30, 2003 have three business days from the date they become a SEDI issuer to file their issuer profile supplement.
The issuer profile supplement will require information about the SEDI issuer’s outstanding securities and the name and contact information for the SEDI issuer. The issuer profile form will be available at the SEDI website. A SEDI issuer must immediately file an amended profile supplement if the information contained in the existing profile supplement changes.
Issuer Event Reports
Starting June 9, 2003 and thereafter within one business day following the occurrence of an "issuer event" every SEDI issuer must file an issuer event report. An "issuer event" is defined as a stock dividend, stock split, consolidation, amalgamation, reorganization, merger or other similar event that affects all holdings of a class of securities of the SEDI issuer in the same manner. Issuer event reports will be displayed on SEDI in order to assist insiders of SEDI issuers to prepare insider reports. SEDI issuers do not have to file an issuer event report for any issuer events that occur before June 9, 2003.
Before the first electronic filing of an insider report, an insider profile must be created on SEDI for the individual insider. The insider profile will consist of substantially the same information as is currently contained in the paper form of insider report. An amended insider profile must be filed within ten days if there is a change in the insider’s name, a change in relationship between the insider and the SEDI issuer or if the insider ceases to be an insider of the SEDI issuer. All other factual changes to the insider profile may be filed at the time of submitting the insider’s next insider report filing on SEDI. At the latest, insiders must create their insider profiles a few days before the first electronic filing of an insider report.
Starting June 9, 2003, insider reports must be filed on SEDI by or on behalf of the insider within 10 days of any trade. Insider reports filed on SEDI will contain substantially the same information as in the current paper form of insider report.
Security Access Keys
SEDI will issue alpha-numeric access keys to insiders and SEDI issuers when insider profiles and issuer profile supplements are created. Any filings of information on SEDI will require the access keys assigned to that insider or SEDI issuer, thereby controlling the information filed by others on behalf of insiders or SEDI issuers. Insiders and SEDI issuers are permitted to provide filing agents (who will not be recorded) with their access keys at any time, thereby remaining in control over those permitted to file on their behalf. Access keys can be changed at any time by insiders and issuers. Insiders making SEDI filings will be required to certify that the information is true and complete. Any agent used to make such SEDI filing will have to make such certification based on his or her best knowledge, information and belief.
We invite you to contact any member of the Goodmans securities team to discuss SEDI and/or the registration process for issuers and insiders with SEDI.
The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.