Delaware Securities Act
608 Registration Exemption for Certain Canadian Broker-Dealers
Order Adopting Rules and Regulations Pursuant to the Delaware Securities Act
On April 1, 2003, the Division of Securities of the Delaware Department of Justice (“Division”) published in the Delaware Register of Regulations proposed revisions to the Rules and Regulations Pursuant to the Delaware Securities Act. The proposed revisions were held open for public comment until May 1, 2003.
Summary of Evidence and Information Submitted
During the thirty day comment period, no evidence or information was provided to the Division regarding the proposed revisions.
Findings of Fact
The Commissioner determines that the adoption of the proposed revisions to the Rules and Regulations Pursuant to the Delaware Securities Act is appropriate.
Decision to Adopt the Proposed Revisions
Wherefore, It is Hereby Ordered, pursuant to 6 Del.C. 7325 and 29 Del.C. 10118, the the proposed revisions to the Rules and Regulations Pursuant to the Delaware Securities Act, in the form attached hereto as Exhibit A, are adopted to be effective ten (10) days following publication of this order in the Delaware Register of Regulations.
SO ORDERED THIS 9TH DAY OF JULY, 2003.
James B. Ropp, Securities Commissioner
Part F. Broker-Dealers, Broker-Dealer Agents, and Issuer Agents
§608 Registration Exemption for Certain Canadian Broker-Dealers
(a) A Canadian broker-dealer which meets the conditions of this rule as set forth below shall be exempt from the registration requirement of Section 7313 of the Act.
(b) To be eligible for this exemption, the broker-dealer must be resident in Canada, have no office or other physical presence in Delaware, and comply with the following conditions:
(1) Only effects or attempts to effect transactions in securities with, or for, one or more of the following;
(i) A person from Canada who is temporarily present in Delaware, with whom the Canadian broker-dealer had a bona fide business-client relationship before the person entered Delaware;
(ii) A person from Canada who is present in Delaware, whose transactions are in a self-directed tax advantaged retirement plan in Canada of which the person is the holder or contributor; or
(iii) A "U.S. institutional investor" or a "major U.S. institutional investor" to the extent permitted by SEC Reg. §240.15a-6 (17 CFR §240.15a-6) As otherwise permitted by the act; and
(2) Is registered in its home province or territory, and a member in good standing of a self-regulatory organization or stock exchange in Canada;
(3) Files with the Securities Commissioner a notice in the form of the current application required by the jurisdiction in which its head office is located;
(4) Files with the Securities Commissioner a consent to service of process in a form which complies with the requirements of Section 7327 of the Act.
(5) Discloses to its clients in Delaware that it is not subject to the full regulatory requirements of the Act; and
(6) Is not in violation of Section[s] 7303 or 7316 of the Act or any rules promulgated thereunder.
(c) Exempt transactions. Offers or sales of any security effected by a broker-dealer who is exempt from registration under this Regulation are exempt from the registration requirements of Section 7304 of the Act and the filing requirements of Section 7312 of the Act.
(d) Agent exemption: An agent who represents a Canadian broker-dealer who is exempt from registration under this Regulation is also exempt from the registration requirement of Section 7313 of the Act, provided such agent maintains his or her provincial or territorial registration in good standing.
(e) Denial, Suspension or Revocation. The Commissioner may by order deny, suspend, or revoke the exemption of a particular Canadian broker-dealer provided pursuant to Rule 608 if he finds that the order is in the public interest and that the Canadian broker-dealer (or any partner, officer, director, or any person occupying a similar status or performing similar functions, or any person directly or indirectly, controlling the broker-dealer) has done anything prohibited by Section 7316(a)(1) to (8),(12) or (13).