Recent Development in Insider Trading

The prohibition against insider trading, a cornerstone of Canadian securities law, remains one of the few areas of such law not completely harmonized among all Canadian jurisdictions; i.e., unlike the rules governing insider reporting, continuous disclosure, take-over bids, distributions by prospectus and exempt distributions, there is no one single national instrument governing insider trading that each Canadian jurisdiction has adopted as a rule or regulation.

In Québec, the fundamental rules in respect of insider trading are set out in Sections 187 and 188 of the Québec Securities Act (QSA): the former provision prohibits insider trading where the insider (and certain other persons) are in possession of non-public "privileged information," while the latter prohibits "tipping," i.e., disclosure by insiders (and certain other persons) of non-public privileged information to others. Recently, both of these provisions have been amended: