Currently, it is estimated that there are 850,000 Canadians living as permanent U.S. residents, one million snowbirds living in the U.S. for less than 183 days, and more than five million Canadians who spend about two weeks a year in the U.S.

For years, the U.S. Securities and Exchange Commission has been issuing warnings against Canadian-based brokerage firms and mutual fund companies accepting orders for investments from these large groups of Canadians. Their position has been that Canadians in the U.S. must deal only with U.S. registered and licensed brokers, U.S. listed securities and mutual funds, and that all transactions have to go to a U.S. address.

This meant that Canadians in the U.S. could not invest in Canadian mutual funds or even invest in their RRSPs or RRIFs unless they returned to Canada. Some issued instructions by mail or fax from a U.S. address but, in 1997, mutual fund companies started to refuse to process these orders for fear of penalties against their U.S. operations for violating the SEC-imposed regulations.

This seemed unfair to most of us. If your RRSP or RRIF must be 80 per cent Canadian content, how could we protect these investments using a U.S. broker?

It is expected that the large hue and cry against this state of affairs will result in permanent changes, effective as early as this year. The SEC has proposed granting permission for Canadians to effect RRSP and RRIF transactions in 1999, while resident in the United States. However, the proposed changes are restricted to registered funds only. Stocks, bonds, mutual funds, and investments that do not go into an RRSP or RRIF will still be prohibited, and Canadian dealers will still not be allowed to provide any transaction service to a Canadian-U.S. resident.

As a snowbird, you will continue to be required to place all transaction orders for purchase or sale of non-registered securities prior to departing from Canada. E-mail or fax orders from U.S. addresses are still illegal for all non-registered investment transactions.

This small step is, hopefully, just the first in allowing travelling Canadians to properly monitor their investments while outside Canada.

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