Single-issuer ETFs and CDRs are growing fast — and regulators are paying attention
Canada's securities regulators want to shut down a potential gap that could let corporate insiders trade single-issuer ETFs and structured products without disclosure.
On April 9, 2026, the Canadian Securities Administrators published a proposed amendment to National Instrument 55-104, the national rule governing insider reporting requirements and exemptions. The change zeroes in on a specific exemption — paragraph 9.7(g) — that the CSA says was never meant to cover transactions in investment funds or structured products tied to an insider's own reporting issuer. A 60-day comment period is now open and runs until June 8, 2026.
The timing is no accident. Single-issuer exchange traded funds arrived in the Canadian market in August 2025, and the space has grown quickly. According to the Ontario Securities Commission, there are now approximately 200 Canadian Depositary Receipts and 70 single-issuer ETFs listed in Canada, with many new listings having come to market in 2025. Structured notes and American Depositary Receipts have also expanded across a wide variety of issuers.
The problem, as the CSA sees it, is straightforward. These products give investors economic exposure to a reporting issuer that is equivalent to investing in the securities of a reporting issuer. That means a corporate insider could potentially take the position that the 9.7(g) exemption allows them to enter into transactions involving single-issuer ETFs, or certain structured products that are based on securities of the insider's reporting issuer, without having to report such transactions. The CSA has said that interpretation is contrary to the policy rationales of NI 55-104.
There is already an exemption under paragraph 9.7(f) that covers transactions in investment funds, but it comes with an important condition: securities of the reporting issuer must not form a material component of the investment fund's market value. The proposed amendment would add a new section 9.8, making it explicit that the 9.7(g) exemption does not apply when the issuer is an investment fund, or when the value or market price of the security is derived from, referenced to, or based on an underlying security, interest, benchmark, or formula that is, or includes as a material component, a security of the reporting issuer or a related financial instrument involving a security of the reporting issuer.
So what does this mean in practice? The OSC identified insiders, issuers, and investors as the stakeholders primarily affected. The Commission noted that the amendment will allow for more efficient allocation of legal and compliance resources by impacted stakeholders. The CSA stated that insiders should comply with insider reporting requirements in respect of transactions involving investment funds and issuers of certain other structured products that derive their value from underlying interests that are, or include as a material component, a security of the insider's reporting issuer or a related financial instrument involving a security of the reporting issuer.
The OSC's cost-benefit analysis makes one thing clear: this amendment does not impose any new insider reporting requirements. It is a clarification, not an expansion. The Commission anticipates no additional costs to insiders, reporting issuers, or investors.
In that same analysis, the OSC weighed two alternatives before the proposed rule change was settled upon. Doing nothing, the Commission concluded, would risk diminishing the effectiveness of the insider reporting regime, since insiders may take the position that they can rely on the 9.7(g) exemption to enter into transactions involving single-issuer ETFs or certain structured products that involve the insider's reporting issuer without having to report such transactions. That approach, the OSC stated, is not consistent with the original intent of the existing rules and would create a gap in the insider reporting regime. Simply issuing guidance was considered to be of questionable effectiveness and would not provide the certainty of the proposed amendment.
Comments can be submitted through the CSA's consultation portal and will be directed to all participating provincial and territorial regulators, including the British Columbia Securities Commission, the Alberta Securities Commission, the Ontario Securities Commission, and the Autorité des marchés financiers. The CSA has noted that submissions cannot be kept confidential, as securities legislation in certain provinces requires publication of the written comments received during the comment period.
The amendment's coming-into-force date has not yet been determined.
