Canadian Tax-Deferred Retirement Savings Accounts

Until recently, Canadian citizens who resided in the United States could not buy or sell securities in their Canadian retirement accounts through their Canadian broker-dealer. This was because federal securities laws generally require that securities transactions made for U.S. residents-even those in the U.S. for only a brief period of time-and brokers who sell those securities be registered with the SEC. Since Canadian brokers and the securities they sold were typically not registered in the U.S., Canadian citizens residing in the U.S. were prevented from managing the assets in their accounts.

In June 2000, the SEC adopted two new rules and issued an exemptive order that essentially remove all federal barriers to managing the assets of a Canadian retirement account. The SEC rules do not, however, eliminate any state securities laws that may apply. Although some states have adopted exemptions similar to the ones adopted by the SEC, some have not. Individuals residing in the U.S. who wish to manage their Canadian retirement accounts should consult their state securities regulator to insure that there are no state law impediments to managing these accounts. You can obtain more information about cross-border trading issues with Canada on the website of the Investment Funds Institute of Canada.

http://www.sec.gov/answers/canadiansnow.htm