How We Calculate Late Transaction Filing for Insiders

Insider reporting regimes in both Canada and the United States are designed to promote market transparency and deter the misuse of material non-public information. Each jurisdiction imposes specific deadlines measured from a triggering event — such as becoming an insider or executing a transaction — and applies different day-counting conventions (calendar days versus business days) depending on the form and the jurisdiction.

Contents

1. Statutory Deadlines
2. Canada - SEDI
3. United States - EDGAR
4. How We Calculate Lateness
5. References

Statutory Deadlines

Canada - SEDI

Governing Legislation

Insider reporting in Canada is governed primarily by National Instrument 55-104 — Insider Reporting Requirements and Exemptions (NI 55-104), adopted by the Canadian Securities Administrators (CSA) and in force across all provinces and territories. Mandatory electronic filing is conducted through SEDI (System for Electronic Disclosure by Insiders), the national online filing system administered by the CSA.

The companion policy, Companion Policy 55-104CP, provides interpretive guidance on the scope of reporting obligations. Provincial securities legislation — including section 107 of the Ontario Securities Act — may impose supplementary requirements in certain jurisdictions.

Opening Balance / Initial Report (Form 55-102F2)

Triggering Event

A reporting insider's first obligation upon becoming a reporting insider — or upon first holding securities of a new reporting issuer — is to file an opening balance report ("Initial Report") on Form 55-102F2 through SEDI, disclosing all current holdings of securities and related financial instruments of that issuer.

Statutory Deadline

Pursuant to NI 55-104, s. 3.2, the initial report must be filed within 10 calendar days of the date on which the individual became a reporting insider of the issuer.

SEDI's own filing guide confirms: “If you already own or control, directly or indirectly, securities or related financial instruments relating to a SEDI issuer, you need to file your insider profile and opening balance within 10 calendar days of becoming a reporting insider.” (SEDI FAQ Factsheet)

The opening balance must reflect the insider's holdings as at the date they became a reporting insider. SEDI requires an insider profile (Form 55-102F1) to be created and linked before the initial report can be filed.

Transaction Reports

Triggering Event

Following the initial report, a reporting insider must file a subsequent insider report for each transaction resulting in a change in beneficial ownership of, or control or direction over, securities of the reporting issuer, or any interest in a related financial instrument involving such securities.

Statutory Deadline

Pursuant to NI 55-104, s. 3.3, and — in Ontario — section 107(2) of the Securities Act (Ontario) (as amended effective October 31, 2010), subsequent transaction reports must be filed within 5 calendar days of the transaction date.

The OSC's SEDI page confirms: reporting insiders are required to file insider reports on SEDI within five calendar days of a trade unless an exemption is available. The CSA accelerated this deadline from 10 calendar days to 5 calendar days when NI 55-104 came into force in 2010, as noted in the CSA Bulletin on accelerated filing deadlines.

Option and Warrant Exercises

Where a reporting insider exercises an option, warrant, or other convertible or exchangeable security, NI 55-104, s. 3.4 requires the filing of two separate reports within 5 calendar days of the exercise: one disclosing the change in the derivative security, and one disclosing the resulting change in the underlying securities (e.g., common shares).

Normal Course Issuer Bids (NCIB)

For acquisitions made by a reporting issuer under a normal course issuer bid (NCIB) as defined in NI 55-104, a modified deadline applies: the issuer must report each acquisition within 10 calendar days of the end of the month in which the acquisitions occurred, rather than within 5 days of each individual transaction. (OSC Insider Reporting Guidance)

United States - EDGAR

Governing Legislation

U.S. insider reporting obligations are established by Section 16 of the Securities Exchange Act of 1934 (the "Exchange Act") and the rules promulgated thereunder by the U.S. Securities and Exchange Commission (SEC). Filings are made electronically through the SEC's EDGAR system. The statutory framework is set out at 15 U.S.C. § 78p.

Detailed rules governing Forms 3, 4, and 5 are found in Rules 16a-1 through 16a-13 under the Exchange Act. The SEC's investor-facing summary is available at Investor.gov: Insider Transactions and Forms 3, 4, and 5.

Form 3 — Initial Statement of Beneficial Ownership

Purpose

Form 3 is the initial disclosure form filed by a person upon first becoming subject to Section 16. It discloses all equity securities of the issuer beneficially owned by the insider at the time of becoming an insider, including derivative securities.

Triggering Event

The obligation to file Form 3 arises upon becoming an insider — i.e., upon first being appointed as a director, designated as a Section 16 officer, or crossing the 10% beneficial ownership threshold. It also arises upon the Section 12 registration of the issuer's securities if the person is already an insider at that time.

Statutory Deadline

Form 3 must be filed within 10 calendar days after the person becomes an insider. (SEC Investor Bulletin — Forms 3, 4, and 5)

How ACCREDITEX Calculates Lateness

Methodology

When Accreditex identifies a potential late filing, we apply the following methodology:

• We determine the transaction date (T) — the date of execution of the underlying trade or event, as reported in the filing itself or as reconstructed from market data and issuer records
• We identify the applicable statutory deadline based on the jurisdiction, form type, and whether the filing is an initial report or a transaction report
• We count the relevant day type from T+1: calendar days for Canadian filings and initial-status U.S. filings; business days for U.S. Form 4 filings
• We compare the actual filing date (as stamped on SEDI or EDGAR) to the computed deadline
• Where the actual filing date exceeds the deadline, the transaction is flagged as late, and the number of days late is recorded

Day-Counting Notes

Day counting begins on T+1 — i.e., the first day counted is the calendar or business day immediately following the transaction date (T). The filing is required by the end of the last day in the window.

For Canadian filings: all days, including weekends and holidays, are counted as calendar days. There is no business-day exception under NI 55-104.

For U.S. Form 4: only business days are counted. A "business day" is any day that is not a Saturday, Sunday, or U.S. federal public holiday. Where the 2nd business day is a U.S. federal holiday, the deadline rolls to the next business day.

For U.S. Form 3 and Form 5: calendar days apply. The Form 3 window is 10 calendar days from the triggering event; the Form 5 window is 45 calendar days from fiscal year-end.

References & Regulatory Sources

 Canada

• National Instrument 55-104 — Insider Reporting Requirements and Exemptions (OSC Unofficial Consolidation)
• Companion Policy 55-104CP (OSC)
• CSA Staff Notice 55-315 — Frequently Asked Questions about NI 55-104
• OSC Rule 13-502 — Fees (including Appendix G: Late Filing Fees)
• OSC — SEDI Overview and Insider Reporting Guidance
• OSC — Insider Reporting Obligations
• SEDI — Filing an Opening Balance on Initial Report
• SEDI Late Filing Factsheet
• SEDI FAQ Factsheet
• BCSC — Requirements for Reporting Insiders
• NI 55-104 — BC Laws (full text)

United States

• SEC — Section 16 of the Securities Exchange Act of 1934 (15 U.S.C. § 78p)
• SEC — Exchange Act Section 16 and Related Rules and Forms (C&DIs)
• SEC Investor Bulletin — Insider Transactions and Forms 3, 4, and 5
• SEC — Forms 3, 4, and 5 Overview (PDF)
• Paul Hastings — SEC Reporting Obligations Under Sections 13 and 16 of the Exchange Act
• Davis Graham — SEC Extends Section 16 Reporting to FPI Directors & Officers (HFIAA)
• Toppan Merrill — New SEC Section 16 Requirements for Foreign Private Issuers

Legal Disclaimer

This document has been prepared by ACCREDITEX Technologies Inc. for informational purposes only. It does not constitute legal, securities, tax, or professional advice, and should not be relied upon as such. Insider reporting obligations are subject to change and are highly fact-specific. Readers are encouraged to consult qualified securities counsel in the relevant jurisdiction before acting on any information contained herein. Accreditex Technologies Inc. makes no representations or warranties as to the accuracy, completeness, or currency of the information provided.