Question of the Week: What is SEDI?

Submitted by nsscadmin on Wed, 04/21/2021 - 09:00

SEDI is short for the System for Electronic Disclosure by Insiders. It is Canada’s online service for the filing and viewing of insider reports that are required under Canadian securities laws.

In Canada people deemed ‘insiders’ must publicly disclose their trading activity. These disclosures deter insider trading on confidential information and identify significant securityholders.

An insider generally includes directors or senior officers of reporting issuers, or anyone that has beneficial ownership or control or direction over more than 10 percent of the voting rights attached to all outstanding voting securities of an issuer.

According to the SEDI website any person will be deemed an insider under these two circumstances:

If an issuer (reporting or not) becomes an insider of a reporting issuer, every director or senior officer of the issuer is deemed to have been an insider of the reporting issuer for the previous six months or for the shorter period that the person was a director or senior officer of the issuer.
If a reporting issuer becomes an insider of another reporting issuer, every director or senior officer of the latter reporting issuer is deemed to have been an insider of the former reporting issuer for the previous six months or for the shorter period that the person was a director or senior officer of the latter reporting issuer.

As such, a director or senior officer, must file an initial SEDI report containing the securities transactions or positions to be reported during these periods.

Rules and possible exemptions for insider reporting can be found in NI 55-104 (National Instrument 55-104 Insider Reporting Requirements and Exemptions).

Failure to file annual financial statements.
Failure to file interim financial statements.
Failure to file an annual or interim management’s discussion and analysis (MD&A) or an annual or interim management report of fund performance (MRFP).
Failure to file an Annual Information Form (AIF).
Failure to file a certification of annual or interim filings required by Multilateral Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (MI 52-109).
Failure to file required proxy materials or a required information circular.
Failure to file an issuer profile supplement on the System for Electronic Disclosure by Insiders (SEDI).
Failure to file a material change report.
Failure to provide a written update after filing a confidential report of a material change.
Failure to file a business acquisition report.
Failure to file annual oil and gas disclosure prescribed by National Instrument 51-101 Standards of Disclosure of Oil and Gas Activities (NI 51-101) or technical reports for a mineral project required under NI 43-101 Standards of Disclosure for Mineral Projects (NI 43-101).
Failure to file a mandatory news release.
Failure to file corporate governance disclosure as required by national Instrument 58-101 Disclosure of Corporate Governance Practices (NI 58-101).
Failure to file audit committee disclosure as required by Multilateral Instrument 52-110 Audit Committees (MI 52-110) or BC Instrument 52-509 Audit Committees.
Failure to include disclosure in an issuer’s MD&A relating to disclosure controls and procedures and their direct effectiveness that is referred to in a certificate filed under MI 52-109.
Financial statements of the reporting issuer, or the auditors’ report accompanying the financial statements, do not comply with the requirements of NI 51-102 Continuous Disclosure Obligations (NI 51-102), National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106) or National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency (NI 52-107).
The reporting issuer has acknowledged that its financial statements, or the auditors’ report accompanying the financial statements, may no longer be relied upon.
The reporting issuer’s AIF, MD&A, MRFP, information circular, or business acquisition reports do not contain information for each of the content items required by NI 51-102 or NI 81-106.
The reporting issuer’s technical disclosure or other reports do not comply with the disclosure requirements of NI 43-101 or 51-101.
Failure to pay a fee required by the Act or the regulations.
Failure to comply with any other requirement related to continuous disclosure.