ORDER GOVERNING TRANSACTIONS BY FOREIGN BROKER-DEALERS EXEMPT FROM FEDERAL REGISTRATION AND TRANSACTIONS EXEMPT UNDER SEC RULE 237

WHEREAS the Commissioner of Banking (the "Commissioner") is charged with administering Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act, as amended by P.A. 00-61, (the "Act") and Sections 36b-31-2 et seq. of the Regulations of Connecticut State Agencies (the "Regulations") promulgated under the Act;

WHEREAS Section 36b-31(a) of the Act provides that "[t]he commissioner may from time to time make ... such ... orders as are necessary to carry out the provisions of sections 36b-2 to 36b-33, inclusive, including ... orders governing registration statements, applications, and reports, and defining any terms, whether or not used in said sections, insofar as the definitions are not inconsistent with the provisions of said sections. For the purpose of ... orders, the commissioner may classify securities, persons and matters within his jurisdiction, and prescribe different requirements for different classes.";

WHEREAS Section 36b-31(b) of the Act adds that "[n]o ... order may be made, amended or rescinded unless the commissioner finds that the action is necessary or appropriate in the public interest or for the protection of investors and consistent with the purposes fairly intended by the policy and provisions of sections 36b-2 to 36b-33, inclusive. In prescribing ... orders the commissioner may cooperate with the securities administrators of the other states and the Securities and Exchange Commission with a view to effectuating the policy of said sections to achieve maximum uniformity in the form and content of registration statements, applications and reports wherever practicable.

WHEREAS Section 36b-6(a) of the Act provides, in part, that "[n]o person shall transact business in this state as a broker-dealer unless he is registered under ... [the Act]. No individual shall transact business as an agent in this state unless he is ... registered as an agent of the broker-dealer ... whom he represents in transacting such business";

WHEREAS Section 36b-3(5) of the Act states, in part, that the term "broker-dealer" means "any person engaged in the business of effecting transactions in securities for the account of others or for his own account. 'Broker-dealer' does not include ... (E) such other persons not within the intent of this subdivision as the Commissioner may by ... order determine";

WHEREAS the United States Securities and Exchange Commission (the "SEC") has promulgated Rule 15a-6 under the Securities Exchange Act of 1934 (the "'34 Act") exempting foreign brokers and dealers engaging in specific transactions from the registration requirements of Sections 15(a)(1) and 15B(a)(1) of the '34 Act;

WHEREAS Rule 15a-6 would exempt, without limitation, a foreign broker-dealer engaging in one or more of the following transactions: 1) effecting transactions in securities with or for persons that have not been solicited by the foreign broker or dealer; 2) subject to certain conditions, inducing or attempting to induce the purchase or sale of any security by a "U.S. institutional investor" or a "major U.S. institutional investor" as those terms are defined in the rule; and 3) effecting transactions in securities with or for, or inducing or attempting to induce the purchase or sale of any security by a foreign person temporarily present in the United States with whom the foreign broker or dealer had a bona fide, pre-existing relationship before the foreign person entered the United States;

WHEREAS on June 7, 2000, the SEC entered an Order (hereinafter, the "Canadian Broker-dealer Order") granting Canadian broker-dealers servicing "Canadian Retirement Accounts", as defined in Rule 237 under the Securities Act of 1933 (the "'33 Act") a narrow exemption from the broker-dealer registration requirement in Section 15(a)(1) of the '34 Act to enable them "to conduct activities necessary to allow individuals, who have established Canadian Retirement Accounts and later moved to the U.S., to effectively manage the assets in those accounts" (Release No. 34-42906);

WHEREAS Section 36b-16 of the Act provides, in part, that: "No person shall offer or sell any security in this state unless (1) it is registered under sections 36b-2 to 36b-33, inclusive, (2) the security or transaction is exempted under section 36b-21, or (3) the security is a covered security provided such person complies with any applicable requirements in subsections (c), (d) and (e) of section 36b-21";

WHEREAS Section 36b-21(b)(17) of the Act provides that: The following transactions are exempted from sections 36b-16 and 36b-22 ... any other transaction that the commissioner may exempt, conditionally or unconditionally, on a finding that registration is not necessary or appropriate in the public interest or for the protection of investors";

WHEREAS the SEC has promulgated Rule 237 exempting from the securities registration requirements of Section 5 of the '33 Act offers and sales of Eligible Securities, as defined in the Rule to certain Canadian tax-deferred retirement accounts, including, without limitation Registered Retirement Savings Plans and Registered Retirement Income Funds administered and established under Canadian law to provide for qualified tax-deferred treatment;

WHEREAS the Commissioner finds that the entry of this Order, which recognizes the increasing globalization of the securities markets and the need for state and federal uniformity, is necessary or appropriate in the public interest and consistent with the purposes fairly intended by the policy and provisions of the Act";

WHEREAS the Commissioner determines, pursuant to Section 36b-3(5)(E) of the Act, that those broker-dealers meeting the criteria set forth in this Order do not fall within the intent of Section 36-3(5) of the Act;

WHEREAS the Commissioner also finds that the registration under Section 36b-16 of the Act of securities transactions effected in accordance with SEC Rule 237 is not necessary or appropriate in the public interest or for the protection of investors.

NOW THEREFORE, THE COMMISSIONER ORDERS AS FOLLOWS:

So ordered at Hartford, Connecticut
this 17th day of August, 2000.

John P. Burke
Banking Commissioner

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