What is the purpose of the System for Electronic Disclosure by Insiders (SEDI)?

What is the purpose of the System for Electronic Disclosure by Insiders (SEDI)?

• A. To facilitate public trading of securities
• B. To provide electronic filings of insider reports
• C. To gather market data for analysis
• D. To track trading patterns of dealers

Answer: (B)

The System for Electronic Disclosure by Insiders (SEDI) is designed specifically for the electronic filing of reports related to insider trading. Its primary purpose is to provide a transparent platform where insiders, such as directors and executives of reporting issuers, can file their insider trading reports electronically. This system enhances the accessibility of this information to both regulatory bodies and the public, promoting transparency and accountability in the securities market, which helps to maintain investor confidence.

Insider reports filed through SEDI detail transactions involving securities of the reporting issuer and are pivotal for ensuring that material information about changes in ownership by insiders is readily available. This facilitates a clear understanding of insider trading activities, which can be critical for investors making informed decisions. Ultimately, SEDI serves a vital role in the oversight of market activities by ensuring that all insider trading information is systematically recorded and available for review.