CSA Notice: 35-301 - Conditional Exemption from Registration for United States Broker-Dealers and Agents

CANADIAN SECURITIES ADMINISTRATORS' NOTICE 35-301
Conditional Exemption from Registration for United StatesBroker-Dealers and Agents

In October 1997, the Canadian Securities Administrators (the "CSA") released for commentproposed National Instrument 35-101 Conditional Exemption from Registration for UnitedStates Broker-Dealers and Agents. The substance and purpose of the proposed NationalInstrument are to provide United States of America (the "USA") broker-dealers and theiragents with a conditional exemption from the applicable registration and prospectusrequirements under Canadian securities legislation in order to facilitate certain cross-bordertrading in foreign securities between USA broker-dealers and their clients from the USAwho are present in a Canadian jurisdiction.

Based on the comment letters received in response to the release, the CSA havedetermined that the following two reciprocity issues require resolution prior to proceedingwith the implementation of the National Instrument.

First, the Securities and Exchange Commission (the "SEC") in the USA has published forcomment proposed rules that would provide registration relief to Canadian dealers andtheir salespersons in a manner similar to that provided to USA broker-dealers and theiragents under the National Instrument. The CSA await the final SEC rules to ensure therules will provide sufficient reciprocal relief.

Second, the CSA are of the view that in order for sufficient reciprocity to be achievedcertain additional states in the USA must adopt rules that provide relief substantivelysimilar to that provided under the National Instrument and the North American SecuritiesAdministrators Association resolution on this issue.

The CSA expect to proceed with the National Instrument following the satisfactoryresolution of the above reciprocity issues.