TSX Company Manual:

TSX Company Manual
Part I Introduction
Part II Why List on the Toronto Stock Exchange?
Part III Original Listing Requirements
Part IV Maintaining a Listing — General Requirements
Part V Special Requirements for Non-Exempt Issuers
Part VI Changes in Capital Structure of Listed Issuers
Part VII Halting of Trading, Suspension and Delisting of Securities
Part VIII Fees Payable by Listed Companies
Part IX Dealing with the News Media
Part X Special Purpose Acquisition Corporations (SPACs)
Part XI Requirements Applicable to Non-Corporate Issuers
Provisions Respecting Conflict of Interest and Competitors of TMX Group Limited
Notices of Approval
Requests for Comments
Staff Notices to Applicants, Listed Issuers, Securities Lawyers and Participating Organizations
Location: TSX Company Manual > Part IV Maintaining a Listing — General Requirements > B. Timely Disclosure > Insider Trading > Law > Sec. 423.4.

Law Guidelines—Disclosure, Confidentiality Guidelines and Employee Trading

Sec. 423.4.

(3 versions)

Every listed company should have a firm rule prohibiting those who have access to confidential information from making use of such information in trading in the company's securities before the information has been fully disclosed to the public and a reasonable period of time for dissemination of the information has passed.

Insider trading is strictly regulated by Part XXI and sections 76 and 134 of the OSA and the Regulation under the Act. The securities laws of other provinces also regulate insider trading in their respective jurisdictions. Insider trading in the securities of companies incorporated under the Canada Business Corporations Act is also regulated by Part Xl of that Act. The definition of an "insider" will vary from statute to statute, but in any case will include directors and senior officers of the company and large shareholders. In Ontario directors and senior officers of any company that is itself an insider of a second company are considered insiders of that second company. It is recommended that directors and officers of listed companies be fully conversant with all applicable legislation concerning insider trading.

The OSA requires insiders who own securities of a listed company to file an initial report with the OSC upon becoming insiders and to report all trades made in the securities of the company of which they are insiders.

In addition, section 76 of the OSA prohibits any person or company in a "special relationship" with a listed company from trading on the basis of undisclosed material information on the affairs of that company. Those considered to be in a "special relationship" with a listed company include those who are insiders, affiliates or associates of the listed company, a person or company proposing to make a take-over bid of the listed company, and a person or company proposing to become a party to a reorganization, amalgamation, merger or similar business arrangement with the listed company. A person or company in a "special relationship" also includes those involved, or which were involved, in the provision of business or professional services for the listed company, including employees.

An indefinite chain of "tippees" is created by including in the "special relationship" category persons or companies who acquire information from a source known to them to have a "special relationship" with the listed company.

In any situation where material information is being kept confidential because disclosure would be unduly detrimental to the best interests of the company, management is under a duty to take every possible precaution to ensure that no trading whatsoever takes place by any insiders or persons in a "special relationship" with the company, such as lawyers, engineers and accountants, in which use is made of such information before it is generally disclosed to the public. Similarly, undisclosed material information cannot be passed on or "tipped" to others who may benefit by trading on the information.

In the event that Market Surveillance is of the opinion that insider or improper trading may have occurred before material information has been disclosed and disseminated, the Exchange requires an immediate announcement to be made disclosing the material information of which use is being made.

Law Guidelines—Disclosure, Confidentiality Guidelines and Employee Trading

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