The Canadian Securities Administrators (CSA), along with its participating jurisdictions, is conducting a review of Automatic Securities Disposition Plans (ASDPs). ASDPs allow insiders to carry out preplanned sales of securities of an issuer through an arms-length administrator, according to a predetermined set of instructions.
The goal of the review is to ensure that ADSPs continue to remain a legitimate mechanism of trading by insiders. At the moment, provincial and territorial securities laws provide an insider trading defence for trades made under automatic plans, but there is no national framework regarding ADSPs.
CSA staff will look at the possibility of establishing a national harmonized regulatory framework governing ADSPs. It will consider whether existing provincial plans provide sufficient constraints on trading activities of insiders and will be informed by relevant international developments in this area.
Another area to be considered is whether exemptions from insider reporting for trades done under ASDPs should continue to be granted under certain circumstances. While not requested by all issuers establishing ADSPs, there have been several exemptions granted over the last ten years.
Until the CSA completes its review and updates the market on its conclusions, CSA staff are unlikely to recommend new insider reporting relief for trades done under ASDPs. Existing insider reporting relief will be unaffected.
For more information, please call Barbara Hendrickson at BAX Securities Law (416) 601 -1004.
This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.