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Limited Registration of Canadian Broker-Dealers and Agents

WHEREAS, the North Dakota Securities Commissioner (Commissioner) is charged with the administration of the North Dakota Securities Act of 1951, as amended (the "Act") and the North Dakota Administrative Rules regarding securities; and

WHEREAS, Section 10-04-03(2) of the Act provides in part that "the commissioner may from time to time make, amend, and rescind such rules, forms, and orders as are necessary under this chapter, including ...... "; and

WHEREAS, Section 10-04-10 of the Act provides that "A dealer or salesman may not offer for sale or sell any securities within or from this state, except in transactions exempt under section 10-04-06, unless registration as a dealer or salesman pursuant to the provisions of this section."; and

WHEREAS, the Commissioner finds that the issuance of this Order is necessary and appropriate in the public interest and is issued with a view toward achieving uniformity.

THEREFORE, IT IS HEREBY ORDERED, pursuant to Section 10-04-03(2) of the Act, that the following persons are exempt from the registration requirements of Section 10-04-10 of the Act.

  • A person who is a resident in Canada, has no office or other physical presence in this state and complies with the following conditions:
    • Only effects or attempts to effect transactions in securities:
      • With or through the issuers of securities involved in the transactions, brokerdealers, banks, savings institutions, trust companies, insurance companies, investment companies (as defined in the Investment Company Act of 1940), pension or profit-sharing trusts, or other financial institutions or institutional buyers, whether acting for themselves or as trustees;
      • With or for a person from Canada who is temporarily present in this state, with whom the Canadian person had a bona fide business-client relationship before the person entered this state; or
      • With or for a person from Canada who is present in this state, whose transactions are in a self-directed tax advantage retirement plan in Canada of which the person is the holder or contributor; and
    • Files a notice in the form of its current application required by the jurisdiction in which its head office is located and a consent to service of process;
    • Is a member of a self-regulatory organization or stock exchange in Canada;
    • Maintains its provincial or territorial registration and its membership in a self regulatory organization or stock exchange in good standing;
    • Provides the Commissioner upon request with its books and records relating to its business in this state as a broker-dealer;
    • Discloses to its clients in the state that such person is not subject to the full regulatory requirements of the North Dakota Securities Act of 1951, as amended, and the rules promulgated thereunder; and
    • Is not in violation of any provisions of the Act or any rules promulgated thereunder.
  • Any offer, sale or purchase of a security effected by a person exempt from the broker-dealer or agent registration requirements pursuant to this Order shall be exempt from the registration requirements of the North Dakota Securities Act of 1951, as amended.

This Order shall remain in effect until amended or rescinded by the Commissioner.

The Commissioner's Order entitled "Canadian Cross-Border Trading Order" dated March 7, 1997 is hereby rescinded and superceded by this Order. Any Orders previously entered by the Commissioner which are inconsistent, in whole or in part, with this order are hereby superceded by this Order.

Dated at Bismarck, North Dakota, this 1st day of July, 1999.