Canadian Reps Get a Break

Canadian retirees can now manage their retirement accounts whether they are north or south of the Canadian border.After a year delay, the SEC has issued rules that exempt Canadian broker/dealers and reps from U.S. registration requirements when dealing with Canadian clients who are in the United States. The exemption means reps north of the border can now sell Canadian securities and funds to their

Canadian retirees can now manage their retirement accounts whether they are north or south of the Canadian border.

After a year delay, the SEC has issued rules that exempt Canadian broker/dealers and reps from U.S. registration requirements when dealing with Canadian clients who are in the United States. The exemption means reps north of the border can now sell Canadian securities and funds to their U.S.-based Canadian investors. Previously, Canadian investors had complained that they were unable to manage their accounts while vacationing or living in the United States.

The new rules took effect June 23, 2000. They apply only where there is an existing business relationship between account holders and the brokerage firm. However, firms can open unsolicited accounts.

The rules also contain some notable conditions:

* Canadian firms and reps cannot advertise Canadian retirement plans in the United States.

* Canadian firms must disclose to investors in the United States at least annually that they and the retirement accounts are not regulated by U.S. laws.

* Firms and reps cannot solicit Canadians in the United States for new accounts. However, reps changing firms can inquire whether their clients want to stay with the firm or move their accounts with the rep.

The exemptions also apply to Canadian firms' Web sites.

Complete text of the rules is available at www.sec.gov/rules/final/33-7860.htm.

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