The Canadian Securities Administrators have issued a notice explaining their interpretation of use of the terms, “senior officer”, “officer” and “insider”.
The notice, which is issued by staff in all CSA jurisdictions other than PEI and the three territories, is designed to provide guidance regarding the interpretation of the terms. It notes that in order to facilitate harmonization of requirements and processes, a number of CSA jurisdictions have repealed or expect to repeal their definition of “senior officer”, and are amending the definition of “officer”. In addition, the term “insider” has been or is expected to be amended, in part, to replace the term “senior officer” with the term “officer”. Because these changes involve amendments to statutes, the timing of implementing these act amendments will differ among the jurisdictions, it notes.
The national rule regarding insider reporting exemptions currently exempts senior officers from insider reporting requirements, provided other conditions are met. Because the rule uses the term “senior officer”, the CSA reports that it has been asked whether the exemptions are available in jurisdictions that no longer have a definition of “senior officer”.
The definition of “officer” in the harmonized amendments is intended to replace the definition of “senior officer” currently used in legislation. The definitions are generally similar, except that the definition of senior officer included the five highest paid employees of an issuer, and the definition of officer includes a number of assistant officer positions, the CSA explains.
“The changes to the definitions of insider, officer and senior officer were not intended to change the availability of the exemptions,” it says. “The reporting requirement in the legislation and exemptions should be read together.”
It adds that references to the term “senior officer” in the insider exemptions rule should be read as “officer” in jurisdictions that no longer have a definition of “senior officer”.