TMX Group to offer same-day insider trade summaries

TORONTO, Aug 5 (Reuters) - TMX Group X.TO, which operates the Toronto Stock Exchange and TSX Venture Exchange, said it will offer a daily summary of insider stock trades on the same day they occur, becoming the first exchange in North America with such a product.

TMX Group’s TSX Datalinx division said on Tuesday that the information is based on a trade-related “marker” that brokers provide when company insiders buy or sell a security.

The summaries, which do not name insiders or break down individual transactions, will be available much faster than the insider trading reports filed with Canadian securities regulators up to 10 days after transactions are completed, TMX Group said.

The information filed with regulators is publicly available on the System for Electronic Disclosure by Insiders, or SEDI, and it identifies company officers, directors or major shareholders, and specifies how many shares each person or corporation bought or sold, along with their latest holdings.

Although the new TMX summaries do not spell out who is buying and selling, they offer an “early warning” to investors that insider activity is going on, said Ted Dixon, chief executive of INK Research in Vancouver, British Columbia, which analyzes insider trading filings for brokerage firms and investors.

“Anything that heightens awareness of insider reporting is great for the market and for what we’re trying to do,” Dixon said.

Legal insider trading can signal valuable information about a company’s prospects because of the first-hand knowledge that directors and senior managers have about their businesses and industry, INK’s website notes.

TMX said that its data will also be accompanied by a daily “corrections” summary due to “overstatement bias.” The exchange operator said that insider and non-insider orders are sometimes bundled together, and the entire trade may be marked as insider.

“Due to the sensitive nature of insider trading information, it is important to consider the correction files in conjunction with the TSX insider trade marker reports,” TSX Datalinx said on the TMX website. (Reporting by Lynne Olver; editing by Rob Wilson)