CSA To Review Automatic Securities Disposition Plans

The Canadian Securities Administrators (the “CSA”) announced on October 24, 2019, that they are undertaking a review of automatic securities disposition plans (“ASDPs”). The stated objective of this review is to ensure that such plans “remain a legitimate mechanism of trading” by insiders that “do not undermine the fairness” of Canadian capital markets.

Executive Summary

What you need to know:

• The CSA are reviewing the use by insiders of ASDPs, which are currently permitted by certain exemptions under applicable securities legislation.
• There is no current indication that the CSA expect to restrict the legitimate use of ASDPs, although the review could result in regulatory guidance being revised from that provided by OSC staff in 2006 as to the conditions to the availability of the relevant exemptions.