Continuous disclosure, insiders and insider reporting

The reporting issuer's obligations

Once a company has sold securities to the public under a prospectus it becomes a reporting issuer, and the prospectus's one-time disclosure turns into a continuous obligation under NI 51-102. Tamarack Foods, a reporting issuer listed on the TSX, files:

• Annual financial statements, audited, with the auditor's report;
• Interim financial statements each quarter, unaudited;
• Management's discussion and analysis (MD&A) with each set of financials — management's narrative of the results, the liquidity, the risks;
• an annual information form (AIF) — the standing description of the business, its risks and its people;
• a material-change report whenever a material change occurs — one that would reasonably be expected to have a significant effect on the market price or value of its securities — promptly, with a news release.

All of it is filed on SEDAR+, the CSA's national electronic filing system, where any investor can read it. Timely disclosure of material information is also an exchange requirement: the TSX can halt a stock while news is released (Lesson 6).

Who is an insider

An insider of a reporting issuer is, in substance, a person presumed to have access to undisclosed material information: the issuer's directors, its senior officers (the CEO, CFO and COO among them), and any person who beneficially owns or controls more than 10 % of its voting securities. Being an insider is a status, and it is entirely lawful — companies have directors and large shareholders by design.

Worked example. Tamarack has 11,000,000 shares outstanding. Its CFO, Hannah, is an insider by office. Harbourfront Capital holds 1,250,000 shares: =1250000/11000000 = 0.113636, or 11.36 % — above the 10 % line, so Harbourfront is an insider by holding. A fund holding 1,000,000 shares (9.09 %) is not.

Insider reporting — the lawful trade

Hannah sells 5,000 Tamarack shares to fund a house purchase, at a time when everything she knows is already public. Perfectly lawful. Because she is a reporting insider, she must file an insider report on SEDI — the System for Electronic Disclosure by Insiders — within the filing window: at time of writing (2026), an initial report within 10 days of becoming a reporting insider, and a report of any change in holdings within 5 days of the trade (NI 55-104). The market then sees that an officer sold, and can weigh it.

Insider trading — the illegal one

Three weeks later Tamarack learns that a contamination problem will force a national product recall — plainly material, and not yet disclosed. Hannah tells her friend Marc over dinner. Marc sells his Tamarack shares the next morning; the recall is announced that afternoon and the stock falls 30 %.

• Hannah has tipped: passing undisclosed material information to someone outside the necessary course of business is an offence, whether or not she traded.
• Marc is a tippee. He is not an insider by office or holding, but a person who trades with knowledge of undisclosed material information obtained from an insider is liable as if he were one.
• Had Hannah sold her own shares that morning, that would be insider trading — the offence is trading on the information, not being an insider.

The two verbs

Insider reporting — lawful trading by an insider, disclosed on SEDI after the fact. Insider trading (in the offence sense) — trading, by anyone, with knowledge of material information the market does not yet have. The paper's distractor is to make the status itself the crime; it is not.

Four people to classify

A director who buys shares after the annual results are published and files on SEDI — lawful; insider reporting. A 12 % shareholder — an insider, by holding. An analyst who overhears the recall on a train and sells — a tippee, liable if she knew the source. A shareholder with 8 % — not an insider.