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Insider Report for Exchange Traded Options

Filing Process for Exchange Traded Options

You report securities holdings and transactions involving exchange traded call or put options in a manner similar to how you would report other options, such as OTC call or put options, with the following exceptions:

Designation of class of securities: Exchange traded call option or exchange traded put option, with the underlying security designation, from the insider-defined securities list (the insider will need to create an insider-defined security designation if this is the first time filing the exchange traded option, see note below.)

Nature of transaction: Code 70 - Acquisition or disposition (writing) of third party derivative

Indicate the number of contracts (or securities) disposed of or acquired in the Number or value of securities or contracts disposed of or acquired fields.

Indicate the equivalent number of underlying securities that may be disposed of or acquired in the Equivalent number or value of underlying securities disposed of or acquired fields.

Note that until the options are exercised, the equivalent number of underlying securities is not increased or reduced from the actual holdings of the insider in the underlying securities as it does not mean and should not be taken to indicate that the underlying securities have, in fact, been acquired or disposed of by the insider.

· Unit price or exercise price: consideration for the option (e.g. premium), if applicable

Conversion or exercise price: option exercise price

Date of expiry or maturity: indicate expiry date of the call or put option

Note: In most situations, insiders are required to add an insider-defined security designation when filing the acquisition of a third party derivative such as an Exchange Traded Call or Put Option.

An initial report recording the opening balance of securities held for the insider-defined security and ownership type is required to be completed prior to posting any related transactions on SEDI. The steps are similar to Filing an Opening Balance on Initial Report with the exception that an insider-defined security is added when filing the report instead of selecting a security from the issuer’s list.

Once a transaction has been posted as an insider-defined security designation, all other transactions for those securities must be filed under that security designation to ensure proper balances of securities. SEDI calculates separate balances for insider-defined securities and issuer-defined securities.

When an insider acquires exchange traded options, these options are created for the transaction. Consequently, the exchange traded options are not included in the insider opening balance of securities held and the opening balance amounts are zero. The transaction could therefore result in a negative closing balance of securities/contracts held and/or equivalent underlying securities in the exchange traded options, depending on the type of option, until they are exercised or when they expire.

Instructions for Filing an Insider Report

Instructions to file an insider report for exchange traded options is similar to filing other option transactions with the exceptions noted above.

See:
Insider Report to Add an Insider-Defined Security Designation (e.g. Third Party Derivatives)

Insider Report for Stock Options
Preliminary Information for Stock Option Filings

The process for filing third party derivatives is described in the following documents: