The North American Securities Administrators’ Association has approved a “model exemption” for the secondary trading of all Toronto Stock Exchange listed securities by U.S. investors.

The exemption will help facilitate the secondary trading in the United States of TSX securities that are not listed on a U.S. exchange. Canadian based interlisted trading will not be affected by this decision.

NASAA is a voluntary association of North American state, provincial and territorial securities administrators.

“This exemption expands opportunities for U.S. investors by giving them access to qualifying Canadian companies,” said NASAA president Joseph Borg.

The TSX and Investment Dealers Association believe this weekend’s decision is a major step forward for the Canadian capital markets and their profile south of the border..

“The NASAA decision is a vote of confidence in the Canadian regulatory system and will reduce burdens on our Member firms with U.S. clients and operations. This in turn will benefit Canadian capital formation,” said Joe Oliver, president and CEO of the IDA.

Most U.S state securities commissions currently prohibit residents from secondary trading of stocks which are not listed on a U.S. exchange unless they have been individually registered or an exemption from registration requirements on a state-by-state basis is available.

The model, which must be adopted by each state individually, will provide individual state commissions with a means to quickly provide a secondary trading exemption for TSX listed companies from this requirement. Since most major US states have a good understanding of the Canadian regulatory system from IDA efforts to obtain RRSP relief, this will facilitate the exemption process.