Law Note - Insider Trading Exemption: Automatic Securities Trading by Stephen J. White


Under Ontario law, insiders are prohibited from purchasing or selling securities of an issuer with knowledge of a material fact or material change with respect to the issuer that has not been generally disclosed (“material undisclosed information”). However, the purchase or sale by insiders of securities of issuers with material undisclosed information may be exempt from this prohibition where the purchase or sale is effected pursuant to “automatic securities dispositions plans” or “automatic securities purchase plans” (that we are collectively referring to as “automatic securities trading plans” or “ASTPs”). (The

Ontario Securities Commission (“OSC”) Staff Notice 55-701 – Automatic Securities Disposition Plans and Automatic Securities Purchase Plans (the “Staff Notice”) sets out the view of the staff of the OSC in this regard.)

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