The Investment Dealers Association says that, effective March 1, 2002, brokerage firms and individual registered representatives must either be registered in the Canadian or U.S. jurisdiction where its clients reside, or be eligible for an exemption under all securities legislation applicable within that jurisdiction.

Firms must take reasonable steps to ensure that they and their registered representatives are eligible for an exemption, including the filing of any documents required under the relevant exemption provision. If the firm or individual is not registered, the account must be closed by March 1, 2002.

After March 1, 2002, any dealer or registered representative found to be maintaining an account for a resident of any jurisdiction in Canada or the US contrary to the legislation of that jurisdiction may be the subject of disciplinary action by the IDA.

The IDA says that recent developments, including its success in reaching an accommodation with the Securities and Exchange Commission and most of the state regulators for registered plan accounts and temporary residents, leads it to be more definitive on the holding of non-resident accounts.