Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: Why can’t he, an American resident and Canadian citizen, acquire securities through a self-directed RRSP?
Position: Nothing in Act preventing him.
Reasons: The Act does not prevent him from acquiring qualified investments. However, as per the July 3, 1998 XXXXXXXXXX letter to you, it is explained that American securities legislation prohibits non-registered firms and individuals from dealing in investment products with their residents.
XXXXXXXXXX 982207
M. P. Sarazin
November 16, 1998
Dear XXXXXXXXXX:
Re: U.S. RRSP Annuitant and the Acquisition of Securities
This is in reply to your letter dated August 26, 1998, wherein you ask why you are not able to transfer the property in your existing registered retirement savings plan (“RRSP”) to a self-directed RRSP in order to acquire securities that trade on various stock exchanges.
The property that may be held by a trust governed by an RRSP is restricted to qualified investments within the meaning assigned by subsection 146(1) of the Income Tax Act (the “Act”). We enclose a copy of Interpretation Bulletin IT-320R2 which describes the various kinds of property that constitute qualified investments for an RRSP. You will note that paragraph 3 of IT-320R2 lists the most common types of investments that may be acquired by an RRSP and these investments include shares and debt obligations of corporations listed on a prescribed stock exchange in Canada and shares listed on prescribed stock exchanges outside of Canada. Consequently, there is nothing in the Act that prevents you from transferring the property held in your existing RRSP to a self-directed RRSP for the purpose of acquiring shares listed on prescribed stock exchanges.
In one of the letters you received from your investment advisers which you forwarded to us, it is stated that American securities regulations prohibit non-registered firms and individuals from dealing in investment products with U.S. residents regardless of their citizenship. Another letter states that Canadian Securities regulations prohibit the adviser from opening accounts for U.S. residents. It appears that your problem is caused by the application of securities regulations and not by any restrictions contained within the Act.
We trust our comments will be of assistance to you.
Yours truly,
Paul Lynch
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
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