On February 19, 2016, the Ontario Securities Commission (OSC) published OSC Staff Notice 51-726 Report on Staff’s Review of Insider Reporting and User Guides for Insiders and Issuers (OSC Staff Notice 51-726).


OSC staff conducted a review of insider reporting and insider trading policies of 100 reporting issuers.  On average, each reporting issuer that was reviewed had 15 reporting insiders, resulting in the review of approximately 1,500 reporting insiders.

Results of the Review

In the case of approximately 70% of the issuers that were subject to the review, there was at least one reporting insider which had a compliance deficiency, requiring the reporting insider to file one or more new insider reports on the System for Electronic Disclosure by Insiders (SEDI) in order to correct the deficiencies (Material Insider Reporting Deficiencies).  Reporting insiders that were required to correct their Material Insider Reporting Deficiency were subject to late filing fees.

In addition, there were non-material deficiencies (Non-Material Insider Reporting Deficiencies) found in the reporting practices of insiders in the case of approximately 45% of the issuers reviewed.  Non-Material Insider Reporting Deficiencies resulted in correctional filings being required, however the reporting insiders were not subject to late fees or penalties.

Common Material Insider Reporting Deficiencies

Among the common Material Insider Reporting Deficiencies identified by OSC staff following its review were the following:

  • Failure by reporting insiders to set up an insider profile and file reports on SEDI.
  • Failure by reporting issuers to set up an insider profile for the issuer and complete insider filings to report purchases under a normal course issuer bid.
  • Discrepancies in the balances of securities held by insiders on SEDI and the issuer’s continuous disclosure filings.
  • Failure by holding companies holding 10% or more of a security of a reporting issuer to have their own insider profiles and reports when they are included as indirect holdings by another reporting insider.
  • Failure by reporting insiders to report the expiration of derivative securities.

Common Non-Material Insider Reporting Deficiencies

Among the common Non-Material Insider Reporting Deficiencies identified by the OSC staff following its review were the following:

  • Incorrect use of transaction codes.
  • Incorrect transaction dates.
  • Incorrect type of ownership and indication of registered holder’s name.
  • Incorrect set up of security designations by the issuer.
  • Failure by reporting insiders to update their insider profiles within 10 days of ceasing to be a reporting insider.
  • Failure by issuers to update their issuer profiles immediately upon any change in the information contained in the issuer profile supplement.

OSC staff also noted the limited use of issuer grant reports by insiders.

Approximately 85% of the issuers that were reviewed had insider trading policies in place and OSC staff found that most of the policies were in accordance with the best practices outlined in National Policy 51-201 Disclosure Standards.  Staff did note, however, that not all policies restricted derivative-based transactions or the grant of stock-based compensation during blackout periods.


OSC Staff Notice 51-726 includes a number of recommendations to assist both issuers and reporting insiders with insider reporting, including the following:


  • As responsibility to file insider reports remains with the reporting insider regardless of whether they use a third party agent, reporting insiders should periodically review SEDI to make sure their reports are being filed correctly.
  • Reporting insiders should be proactive and periodically review their insider profiles on SEDI to determine whether they continue to be shown as reporting insiders of issuers and whether their contact information is current.
  • Reporting insiders should be proactive and review information circulars annually and other CD records of the issuer on a regular basis to ensure their security holdings are properly reflected.


  • Issuers should be proactive and periodically review their issuer profile supplement to see if any updates are required and remind their insiders to review their insider profiles for accuracy and completeness.
  • Guidance on creating security designations can be found in CSA Staff Notice 55-316 Questions and Answers on Insider reporting and the System for Disclosure by Insiders (SEDI). However, issuers should contact the OSC if they have further questions to ensure new securities designations are set up properly in SEDI.
  • To communicate information about a grant in a timely manner and to help avoid late fees being charged against its insiders, issuers should consider filing an issuer grant report within 5 days of a grant.
  • Issuers should implement a process to annually verify the securities holdings communicated to them by insiders in order to avoid variances in the public records filed by the issuer on SEDAR versus the reports filed by insiders on SEDI.
  • Issuers should annually review their insider trading policies to ensure they align with current Canadian securities legislation.
  • Issuers should also adopt a written policy which, among other things, specifically prohibits derivative-based transactions, the grant of options and the setting of the exercise price during blackout periods. The written policy should also provide for a senior officer to approve and monitor the trading activity of all insiders, officers, and senior employees.

User guides for reporting insiders and reporting issuers are included as appendices to OSC Staff Notice 51-726.  The user guides are intended to assist reporting insiders and reporting issuers in conducting a review of their own reporting on SEDI.