The Canadian Securities Administrators has published the report it has received from the Illegal Insider Trading Task Force, which recommends practices to address illegal insider trading in Canadian capital markets.

The recommendations focus on addressing illegal insider trading from three directions: prevention, detection and deterrence.

Key recommendations include:

  • encouraging strict adherence to information containment practices by senior management, corporate directors, lawyers and accountants through best practice recommendations;
  • giving investors real-time access to trading data with markers used to identify trades by insiders;
  • improving surveillance capabilities through a shared database among regulators to integrate client data with data from trading on Canadian equities and derivatives markets;
  • reducing the use of offshore accounts in illegal insider trades by identifying jurisdictions that have unsatisfactory regulatory regimes and by evaluating the costs and benefits of requiring offshore financial institutions that open accounts for Canadian investors to consent to identify individuals responsible for specific trades;
  • supporting the approval of proposed criminal sanctions under the Federal Bill C-46; and
  • forming a national subgroup of the RCMP Integrated Market Enforcement Teams to focus solely on illegal insider trading.



The task force , which was established in September 2002, includes representatives from the Ontario, Quebec, British Columbia and Alberta securities commissions, the Investment Dealers Association of Canada, the Bourse de Montréal and Market Regulation Services Inc.

“We are pleased to receive these recommendations, which have been tabled with all securities regulators in Canada,” said Stephen Sibold, chairman of the CSA and of the Alberta Securities Commission. “We will be thoughtfully considering these recommendations as we devise an action plan to address the problem of illegal insider trading.”

“Illegal insider trading is not a victimless crime,” added Sibold. “Investors who unknowingly trade with people who have inside information lose because they are in an unequal and unfair relationship. Markets where illegal insider trading occurs can suffer a loss of liquidity if international capital flows avoid them. By coordinating our efforts, we can bolster the reputation of the Canadian capital market and assure our investors that they are dealing in a fair, level market.”