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SEC Adopts Rules Regarding Canadians’ IRAs
Washington, DC, June 14, 2000 - The Securities and Exchange Commission recently adopted "snowbird" proposals, consisting of new rules under the Investment Company Act of 1940 and the Securities Act of 1933, amendments to a rule under the Securities Exchange Act of 1934, and an exemptive order for Canadian broker-dealers. These proposals are designed to enable Canadians who have moved to the US, or who temporarily reside in the US, to manage assets in their tax-advantaged Canadian individual retirement accounts. Without these new rules and rule amendments, these Canadians would have been unable to make changes in their retirement accounts because the changes would have involved the sale of unregistered securities and investment companies in violation of US securities laws. The new rules and rule amendments take effect on June 23, 2000.
In addition to the new rules and rule amendments, the Commission issued an order exempting the Canadian broker-dealers that maintain Canadian retirement accounts from the registration requirements and other related provisions of the Exchange Act. As a condition to the exemptive relief, the broker-dealer must have had a bona fide, pre-existing relationship with the participant before the participant entered the US.
The Institute submitted a comment letter on the proposal in May 1999.