Hello, would you please help me understand Canadian B/D? thanks.
Hi, I’m happy to help - what part of the explanation could use more clarification?
Canadian broker-dealers may claim a limited form of registration with any state in order to offer its services to Canadian clients residing in the United States. There are two different circumstances to be aware of:
- Canadian clients temporarily visiting the US
- Canadian clients permanently residing in the US
FYI - Canadian broker-dealers must obtain full registration if offering any services to American customers in the US
Canadian clients temporarily visiting the US
If a Canadian client travels to the US for 6 months or less, Canadian broker-dealers can file for a limited form of registration with the state the client is located in. The broker-dealer will file an application with the appropriate Canadian regulator (also known as an SRO - self-regulatory organization) and a consent to service of process with the state administrator. Additionally, the state administrator may request the broker-dealer provide their books and records.
Canadian clients permanently residing in the US
This rule primarily applies to dual resident clients that primarily reside in the US. Canadian broker-dealers may only offer services related to Registered Retirement Savings Plans (RRSPs), which are similar to Individual Retirement Accounts (IRAs) in the US. Additionally, the broker-dealer must file the same documentation listed in the section above to gain limited registration.
If the Canadian broker-dealer maintains ongoing limited registration, they must periodically renew their registration. Unlike US broker-dealers that must renew annually by December 31st, Canadian broker-dealer must renew annually by December 1st.