(September 18 – 17:30 ET) – In a speech to the annual conference of the North American Securities Administrators Association’s in Montreal, the Ian Russell, senior vice president, capital markets of the Investment Dealers Association, talked about the progress toward better cross-border trading opportunities.
Russell outlined the mandate of the Joint Securities Industry Committee on Cross-border Issues:
- Publish a handbook for Canadian dealers on U.S. rules;
- Achieve regulatory relief in the U.S. for Canadian dealers to trade RRSP accounts of U.S. residents;
- Achieve relief for secondary market transactions in Canadian stocks for U.S. investors;
- Achieve relief from the SEC penny stock rule for listed Canadian stocks;
- Obtain appropriate margin treatment by U.S. SROs for liquid Canadian stocks traded by the U.S. arms of Canadian dealers; and
- Acheive relief from certain SRO rules for U.S. affiliates of Canadian dealers.
The committee has accomplished its first two objectives, although state by state approval is still required for snowbird trading, and only about half of the U.S. jurisdictions have granted relief. It is now focusing on objective number three, allowing U.S. investors to trade Canadian stocks with Canadian dealers.
Russell says that based on recent discussions the committee is optimistic that an exemption will be agreed to with the NASAA, and that the NASAA may consider it at its April meeting. The committee hopes to receive relief only for secondary trades without going to the extent of drafting a memorandum of understanding.
Russell says that gaining this relief will be key in that it will establish that Canadian listing and disclosure standards have merit and can be relied on to gain other exemptions. Currently Canadian markets are considered no better than unregulated over-the-counter markets by U.S. regulators.
-IE Staff