The term "insider" generally includes a director or senior officer of a reporting issuer or a person or a company that has beneficial ownership or control or direction over more than 10% of the voting rights attached to all outstanding voting securities of an issuer.
What are DSU and RSA?
Deferred Share Units (DSU) and Restricted Share Awards (RSA) entitle employees to an award of the issuer's common shares after a specified period or cash payments based on the value or growth in value of the issuer's common shares over a specified period.
What is a Derivative?
A derivative is an instrument that derives its value from another security. Two categories of derivatives are used:
1. “Issuer derivatives” are securities issued by the issuer. Issuer derivatives would include options, warrants, rights and special warrants issued by an issuer. The issuer designates these securities in its issuer profile supplement.
2. “Third party derivatives” are securities issued by a person or company other than the issuer. The price of third party derivatives is based on an underlying interest (such as common shares) issued by the issuer as the underlying security. Third party derivatives include exchange-traded call or put options, over-the-counter (OTC) call or put options (including private options to purchase or sell), equity swaps (long or short positions), forward purchases or sales and futures contracts (long or short positions). The insider, not the issuer, must define these securities in their insider profile.
What are exchange Traded Options?
An exchange traded option is an option that has been written by, or the performance guaranteed by, a member of a recognized exchange that permits the holder of the option to sell (put option) or purchase (call option) from the writer of the option a specified amount of securities at a specified price, on or before a specified date or the occurrence of a specified event.
The securities that are the subject of the option must be listed and posted for trading on a recognized exchange.
What are Forwards?
Forwards are similar to futures except that, instead of being traded on an exchange, they are over-the-counter or bilateral agreements between two parties to buy and sell a designated security at a specified time in the future at a price that has been determined, or whose method of determination has been agreed upon, at the time the contract is entered into.
Forwards are usually contracted for a specific amount or number of shares, not a number of standardized contracts as are futures.
Most forward contracts represent a certain number of underlying securities called the "trading unit" or "contract multiplier" which can be found in the contract specifications.
Often, one forward contract represents 10 or 100 shares. Therefore, the number of contracts and the multiplier will both be reported as "one" and the 10 or 100 shares will be reported as the underlying securities.
Forwards may be settled in cash or by delivery of the underlying shares.
What are Futures Contracts?
A share future is an exchange-traded contract to buy or sell a designated security at a specified time in the future at a price that is fixed at the time the contract is entered into. Each futures contract represents a certain number of underlying securities. Futures may be settled in cash or by delivery of the underlying security, depending on the specifications of the contract.
What are Installment Receipts?
A debt or equity issuance in which the purchaser does not pay the full value of the issue up front.
In the purchase of an installment receipt, an initial payment is made to the issuer at the time the issue closes; the remaining balance must be paid in installments, usually within a two-year period.
Although the purchaser has not paid the full value of the issue, he or she is still entitled to full voting rights and dividends.
These securities may also be referred to as installment receipts.
What is an Issuer Event?
An issuer event is a stock dividend, stock split, consolidation, amalgamation, reorganization, merger or other similar event that involves the issuance of securities affecting all holdings of a class of securities of a SEDI issuer in the same manner. A cash dividend, for example, would not be an issuer event reportable on SEDI.
What is an Issuer Event Report?
An issuer event report is a report filed by a SEDI issuer on SEDI. This report provides notice to insiders that an issuer event has occurred. It helps insiders to more accurately report changes in their securities holdings that may result from the issuer event.
What is an Issues Grant Report?
An issuer grant report is a report filed by a SEDI issuer on SEDI. The report provides notice of a grant of options or other securities by a reporting issuer under a compensation arrangement to its insiders.
What are the three ownership types?
Direct: You can hold the securities directly. For example, you can hold the securities in an account with your broker, but the account is in your name.
Indirect: You can hold the securities indirectly. For example, you beneficially own common shares in S Co. but the registered owner is another entity such as a holding company, an RRSP or a family trust.
Control or Direction: You have control or direction over the securities if you, directly or indirectly, through any contract, arrangement, understanding or relationship or otherwise have or share
- voting power, or
- investment power
For example, you set up a trust for your children in which Co X securities are held. Because of your relationship with your minor children,you need to report your children's holdings, because you could direct your children to purchase or sell those securities. This may also be the case if your spouse (r any other person related to you) owns the securities, but you have control or direction over those securities.
What is a registered Holder?
A "registered holder" is required to be chosen when filing insider transactions where the insider does not have direct ownership of the securities. If the ownership type chosen is either indirect or control or direction, then a registered holder must be chosen from the list of registered holders.
What are SARs?
Stock Appreciation Rights (SAR) typically only entitle employees to cash payments based on the value or growth in the value of the issuer's common shares over a specified period.
For Market Transactions: the transaction date is the trade date, not the settlement date.
For Non Market Transactions: The transaction date is the date ownership passes when an offer to sell is accepted by the purchaser or an offer to buy is accepted by the seller.
Reportable Transaction date for Stock options: A grant of stock options must be reported within five calendar days of the date the insider legally acquires ownership of a specific number of options. (prior to October 31 2010, you need to report within 10 calendar days). If your issuer has file an "issuer grant report" within five calendar days of the grant that discloses the existence and material terms of the grant, it is not necessary to file an insider report within the normal time periods for filing insider reports and you can instead file an annual report file by March 31 of the following year.
What is a Third Party Derivative?
A third party derivative is issued by a person or company other than the reporting issuer to which the insider reporting requirement relates. The price of third party derivatives is based on an underlying interest (such as common shares) issued by the issuer as the underlying security.
What is a Third Party Option?
An option contract is a contract in which the writer of the option grants the buyer of the option the right, but not the obligation, to purchase from (call option), or sell to (put option), the writer, a designated security (the underlying security), at a specified price (the exercise price) within a specified time period.
Options can be settled by physical delivery of the underlying or by cash payment, depending on the contract specifications (exchange-traded option) or the terms of the agreement (over-the-counter option or OTC option, including private option).
One option contract could cover various underlying securities.
Note: SEDI requires that the number of contracts and the equivalent number of underlying securities be reported. The equivalent number of underlying securities should not be added to the actual holdings of the insider in the underlying securities as it does not mean and should not be taken to indicate that the underlying securities have, in fact, been acquired or disposed of by the insider.
What is an Underlying Security?
An underlying security is a security you would acquire if you exercised the right attached to another previously acquired security.
For example, if you previously acquired an option that is exercisable into a common share, the common share is the “underlying security.” You would receive a common share when you exercise the option. You need to report the grant of the option with its corresponding underlying security as an acquisition under options. When you exercise the options, you report a disposition of the options and the equivalent number of underlying securities (code 51). A separate report to reflect the acquisition of the common shares (code 51) must also be filed.
What is the Unit Price?
The unit price is the per unit price you paid or received for each transaction, if applicable. If the transaction involved consideration other than cash, provide the approximate fair value of the consideration in Canadian dollars and describe the consideration in the General Remarks field (maximum number of characters for remarks: 254). If no amount or value was paid or received (e.g. expiration of stock options, warrants or rights), check Not Applicable
What is Indirect Beneficial Ownership?
A person is an indirect beneficial owner when the person's securities are held through an issuer, an affiliated issuer, a family trust, a third person or other legal entity.