Extended meaning of “insider”
276. (1) In this section and sections 276.1 and 277, “insider” with respect to a company means
(a) the company;
(b) an affiliate of the company;
(c) a director or officer of the company or of any person described in paragraph (b), (d) or (f);
(d) a person who beneficially owns directly or indirectly, or who exercises control or direction over or has a combination of ownership, control and direction in respect of, shares of the company carrying more than the prescribed percentage of the voting rights attached to all of the company’s outstanding shares not including shares held by the person as underwriter while those shares are in the course of a distribution to the public;
(e) a person, other than a person described in paragraph (f), who is employed or retained by the company or by a person described in paragraph (f);
(f) a person who engages in or proposes to engage in any business or professional activity with or on behalf of the company;
(g) a person who received material confidential information concerning the company while they were a person described in any of paragraphs (a) to (f);
(h) a person who receives material confidential information from a person who is and who they know or ought reasonably to have known is a person described in this subsection, including in this paragraph, or subsection (3) or (4); or
(i) a prescribed person.
Extended meaning of “security”
(2) For the purposes of this section, each of the following is deemed to be a security of a company:
(a) a put, call, option or other right or obligation to purchase or sell a security of the company; and
(b) a security of another entity, the market price of which varies materially with the market price of the securities of the company.
Marginal note:Deemed insider — take-over bid or business combination
(3) For the purposes of this section and subsection 276.1(1), a person who proposes to make a take-over bid as defined in the regulations for securities of a company or to enter into a business combination with a company is an insider of the company with respect to material confidential information obtained from the company.
Marginal note:Deemed insider — affiliate or associate
(4) An insider of a person referred to in subsection (3), or the person’s affiliate or associate, is an insider of the company referred to in that subsection. Paragraphs (1)(b) to (i) apply in making this determination except that references to “company” are to be read as references to “person described in subsection (3)”.
Meaning of “associate”
(5) In subsection (4), “associate” means with respect to a person
(a) a body corporate that the person directly or indirectly controls, determined without regard to paragraph 3(1)(d), or of which they beneficially own shares or securities currently convertible into shares carrying more than 10% of the voting rights under all circumstances or by reason of the occurrence of an event that has occurred and is continuing or a currently exercisable option or right to purchase the shares or convertible securities;
(b) a partner of the person acting on behalf of the partnership of which they are partners;
(c) a trust or estate in which the person has a substantial beneficial interest or in respect of which they serve as a trustee or a liquidator of the succession or in a similar capacity;
(d) a spouse or common-law partner of the person;
(e) a child of the person or of their spouse or common-law partner; or
(f) if that relative has the same residence as the person, a relative of the person or of their spouse or common-law partner.
Marginal note:Insider trading — compensation to sellers and purchasers
(6) An insider of a company who purchases or sells a security of the company with knowledge of confidential information that if it were generally known might reasonably be expected to materially affect the value of any of the securities of the company is liable to compensate the seller or purchaser of the security, as the case may be, for any loss suffered by them as a result of the purchase or sale unless the insider establishes that
(a) the insider reasonably believed that the information had been generally disclosed;
(b) the information was known or ought reasonably to have been known by the seller or purchaser; or
(c) the purchase or sale of the security took place in the prescribed circumstances.
Marginal note:Insider trading — compensation to company
(7) The insider is accountable to the company for any benefit or advantage received or receivable by the insider as a result of a purchase or sale described in subsection (6) unless they establish the circumstances described in paragraph (6)(a).
- 1991, c. 45, s. 276;
- 2005, c. 54, s. 422.
- Date modified: