System for Electronic Disclosure by Insiders (SEDI) Questions and Answers from the Toronto SEDI information session held on October 15, 2001
Note: these questions and answers are not organized into insider and issuer questions, but are listed in the order in which they were asked.
QUESTIONS
- As an agent, how do I access each of my clients' filings?
- What do I need to do if I'm an insider of several companies?
- When do I file an issuer event report versus a material change report?
- For an existing stock option plan, do I need to amend the issuer's profile supplement to add a different security designation each time the issuer grants options at a different exercise price?
- Five years down the road, will I be able to retrieve information on an insider's position at a given point in time?
- On becoming an insider, do I need to file an insider report if I have a nil position?
- Why is the electronic insider trade reporting system in the U.S. not widely used and how have you taken this into account in designing SEDI?
- What prevents insiders from adding incorrect securities to the lists for particular issuers?
- Is there a provision for bulk filing?
- The deadlines to file are too tight, especially the initial 5-day period.
- Do I have to file reports on trades for direct and indirect holdings?
- How extensive will be the list of derivatives on the "Insider Transaction Detail" screen that the public can access when doing searches?
- Can a law firm register as an agent?
- Can law clerks register as agents?
- Can an issuer or an insider have several agents?
- How many passwords will I have as an agent?
- How can I trust that personal information is secure in SEDI?
- At what time on October 29 will the system be launched?
- Can we access the screens now to get acquainted with the system and the requirements?
- When is the fee increase effective?
- SEDI information can be sold - who will make a profit?
- Can we select currencies other than Canadian for filings?
- Can I correct mistakes from earlier filings?
- Do insiders who will only file through an agent need to register in SEDI?
- Do I need to be registered in SEDI before I can access the system and view the screens?
- How can I get help in SEDI?
- SEDI imposes lots of new requirements and short deadlines, why can't we access the test environment?
- When agents file on behalf of clients who are insiders at more than one company, they may not know if a profile is already on file. Can they check?
- Insiders have filed in the past using their office address to protect their personal information. Can they do that in SEDI?
- For trades made on November 12, can I file the insider trading report in the paper format or do I have to use SEDI?
- If I am an agent, can I get onscreen at the same time as my client so we can work on a file together?
- Can I register as an insider, an issuer and an agent?
- Will SEDI list the number of issued and outstanding shares for each issuer?
ANSWERS
1. As an agent, how do I access each of my clients' filings?
You will need each client's access key to access each client's records. If you set up the account, you will receive notification about their key. Otherwise, you will need the client to supply you with the key. Note that the access key may also be used by others if the client is an insider at another company and chooses to have a different agent file reports for insider trades in that company's securities.
Back to Questions
2. What do I need to do if I'm an insider of several companies?
You can only file a single profile and will be issued only one access key for all your filings. Note that if you choose to have different agents file reports for insider trades you make of different companies' securities, you will need to share your access key with each of the agents.
Back to Questions
3. When do I file an issuer event report versus a material change report?
You must file an issuer event report when an event affects the entire class of securities in the same manner. This may also be a material change in which case a material change report will also need to be filed. However, not all material changes will be issuer events.
Back to Questions
4. For an existing stock option plan, do I need to amend the issuer's profile supplement to add a different security designation each time the issuer grants options at a different exercise price?
No. In order to include options issued under a stock option plan as a security on your Issuer Profile Supplement, you first select the appropriate "Security Category" by choosing "Issuer Derivative". Then, you provide a designation of the security by selecting "Options" from the list of generic security names provided for issuer derivatives, and then, if applicable, you enter additional words to describe the specific options. i.e., 2001 Executive Stock Option Plan. Because Options are issuer derivatives, you will also then provide the category and designation of the underlying security, i.e., the security issued on exercise of the option. There is no need to amend the Issuer Profile Supplement if options under this plan are issued at different exercise prices. However, if, for example, the options are issued under a different plan and/or the underlying security changes, you will need to amend the Issuer Profile Supplement.
Back to Questions
5. Five years down the road, will I be able to retrieve information on an insider’s position at a given point in time?
Yes, the search feature will enable you to get information on a particular insider's record at any specific point in time for any trades reported on SEDI from November 13, 2001 onwards. Note that at some point, we may need to archive data older than several years and that the data may not be instantly available.
Back to Questions
6. On becoming an insider, do I need to file an insider report if I have a nil position?
No. You are only required to file an insider report when you become an insider if you hold securities of the issuer at that time. However, you should note that different rules apply to you if you are a director or officer of an issuer that becomes an insider.
Back to Questions
7. Why is the electronic insider trade reporting system in the U.S. not widely used and how have you taken this into account in designing SEDI?
We understand that in the U.S. some users still find the paper-based system to be easier to use. The electronic insider trade reporting system in use in the U.S. is optional and was developed some years ago. We have built SEDI to be very user friendly and easy to navigate. For example, one significant difference between SEDI and the U.S. system is that you can access SEDI through the internet.
Back to Questions
8. What prevents insiders from adding incorrect securities to the lists for particular issuers?
If an insider wants to file a report for a trade in a security that the issuer has not included in their profile, the insider can either contact the issuer to have them update their list or add a new class for the security. If the insider adds the information when filing an insider report, this is highlighted as an insider-defined security. This change does not affect the issuer's or any other insiders' records. Therefore, it is preferable for the issuer to add the security to its Issuer Profile Supplement.
Back to Questions
9. Is there a provision for bulk filing?
A bulk filing feature (often referred to as batch filing) was discussed during system planning sessions. However, given the complexity of the system as it stands, it was felt that bulk filing capabilities would add too much to the project scope and cost. This issue remains a potential add-on for future SEDI releases.
Back to Questions
10. The deadlines to file are too tight, especially the initial 5-day period.
Issuers have until October 26 to update their SEDAR profile. Then, during the period of October 29 to November 5, all that is required of issuers is to register and file a SEDI Profile Supplement that will provide basic information on which insiders can subsequently provide information on their trades. Refer to the National Instrument for specific information on the Issuer Profile Supplement. The information required is not complex. Moreover, the deadlines were published as part of the publication of the National Instrument in July of this year. In addition, we are available to help issuers understand their obligations.
Back to Questions
11. Do I have to file reports on trades for direct and indirect holdings?
Yes, you must file reports for trades in direct and indirect holdings, as you are currently required to file on paper.
Back to Questions
12. How extensive will be the list of derivatives on the "Insider Transaction Detail" screen that the public can access when doing searches?
There are 15 specified types of derivatives listed for searches, as well as an "other" check box for each of issuer derivatives and third party derivatives.
Back to Questions
13. Can a law firm register as an agent?
No. Only individuals can register as agents.
Back to Questions
14. Can law clerks register as agents?
Yes, any individual can register.
Back to Questions
15. Can an issuer or an insider have several agents?
Yes. You may wish to have several people register as agents on behalf of an issuer or an insider to ensure you are able to meet the issuers' and their insiders' needs.
Back to Questions
16. How many passwords will I have as an agent?
You will be issued a user ID and a password for yourself. In addition, you will need the access key for each issuer or insider on whose behalf you will file reports.
Back to Questions
17. How can I trust that personal information is secure in SEDI?
The system is designed with security features to prevent the disclosure of personal information. Access privileges are strictly controlled with ID checks and access keys. Gateways into the hardware are protected with firewalls and other security features.
Back to Questions
18. At what time on October 29 will the system be launched?
SEDI will be launched at 6 am Toronto time October 29, 2001.
Back to Questions
19. Can we access the screens now to get acquainted with the system and the requirements?
SEDI will not be available until it is launched on October 29. However, the National Instrument and the relevant forms (posted on the OSC Web site) list in detail the type of information that SEDI will require issuers and insiders to file. As well, see the "Getting Started" document on the OSC Web site for more information.
Back to Questions
20. When is the fee increase effective?
The increased SEDAR Continuous Disclosure fee will be payable by issuers commencing in January 2002. There is no fee charged to insiders for filing in SEDI. Instead, an increase to the existing annual continuous disclosure fee will apply to all reporting issuers other than mutual funds that are required to file continuous disclosure documents through SEDAR. Fees payable in 2002 will be for 14 months - November and December 2001 and 12 months of 2002.
Back to Questions
21. SEDI information can be sold - who will make a profit?
As the SEDI operator, CDS INC. hopes to profitably sell repackaged bulk data collected in SEDI. Note that personal information filed in SEDI will not be included in any data sales.
Back to Questions
22. Can we select currencies other than Canadian for filings?
Yes, there is a drop-down box that allows for selections. The default setting will be Canadian dollars.
Back to Questions
23. Can I correct mistakes from earlier filings?
Yes, you can file an amendment if you subsequently notice an error in your filings. If you change the closing balance on your report, SEDI will also change the closing balance on subsequent reports.
Back to Questions
24. Do insiders who will only file through an agent need to register in SEDI?
No.
Back to Questions
25. Do I need to be registered in SEDI before I can access the system and view the screens?
If you are only accessing the public side of the site, no registration is required. However, if you are interested in viewing the screens in the registration and filing portion of SEDI, you will first need to register as an issuer, an insider or an agent. Remember that if you are an insider SEDI does not change what you need to report, it just changes the way in which you report. You will quickly appreciate the advantages of online reporting once you acquaint yourself with the system.
Back to Questions
26. How can I get help in SEDI?
SEDI is a web-based system and is designed to be user-friendly and intuitive for filers. It incorporates online help, a user guide, a list of frequently asked questions (FAQs) and detailed guidance such as a derivatives reporting section. Information on the system is available now in the "Getting Started" section of the OSC Web site. This will be removed from the OSC Web site after SEDI is launched, as a more comprehensive on line help guide will be available on the SEDI Web site. As well, telephone support will be available from CDS for technical questions and from the securities commissions for questions related to SEDI functionality or for regulatory or compliance issues.
Back to Questions
27. SEDI imposes lots of new requirements and short deadlines, why can't we access the test environment?
Once the system is launched on October 29, it will be available for your review. Until that time, it is just not possible to open the system to access. However, keep in mind that SEDI does not impose any new requirements for insiders, it automates existing processes. Over time, we are confident that you will come to appreciate the advantages of an online reporting system.
Back to Questions
28. When agents file on behalf of clients who are insiders at more than one company, they may not know if a profile is already on file. Can they check?
Users can view insider profiles. Therefore, you can see if a profile has already been set up for an individual. People who are insiders of more than one company and who use agents' services should decide which of their agents should create their profile and instruct other agents to wait until this initial step is completed before adding information to the file. SEDI is programmed to track obvious duplicate profiles.
Back to Questions
29. Insiders have filed in the past using their office address to protect their personal information. Can they do that in SEDI?
SEDI does not change an insider's current responsibility to file a complete report including home address and day telephone number. This personal information will not be made public in SEDI or by the commissions.
Back to Questions
30. For trades made on November 12, can I file the insider trading report in the paper format or do I have to use SEDI?
You have the choice. Trades made prior to November 13 can be reported in the paper system or in SEDI, as long as you respect the ten-day filing requirement. All reports filed from November 13 onwards must be filed in SEDI.
Back to Questions
31. If I am an agent, can I get onscreen at the same time as my client so we can work on a file together?
For security reasons, only one user can use one access key at any time. Therefore, you will not be able to log on at the same time as your client. However, through online help and customer service telephone inquiries, most users should be able to complete their filings with little difficulty.
Back to Questions
32. Can I register as an insider, an issuer and an agent?
Yes, if you fulfill multiple roles, you can register as an issuer, an insider and an agent.
Back to Questions
33. Will SEDI list the number of issued and outstanding shares for each issuer?
No, that information will not be available in SEDI.
Back to Questions
|
