Securities Bulletin

              SECURITIES bulletin
For the past several years, one week in April has been
designated as Facts on Saving and Investing Week. One
of the goals is to educate the public about the
importance of saving, investing, managing finances and
preparing for retirement. Just a few years ago, the
stock market was rising at an incredible rate and
investors were making money in the market like never
before. Americans who traditionally held their funds in
savings, checking and money market accounts,
ventured into the stock market and other forms of
investments. Unfortunately, many people lost money
both in the legitimate market and to unscrupulous
con-artists peddling exotic investments.
Even though investors have suffered financial setbacks
and might be discouraged from investing, most experts
agree that future financial security requires a plan of
action that includes not only saving but investing as
well. Investors need set goals and objectives based on
answers to these questions:
• What are my primary investment priorities?
• Am I interested in long-term growth or in
generating quick profits?
• Do I plan to use investments for tax savings or as a
primary source of income?
• How much risk am I willing to take?
• How much of my investment can I afford to lose?
Discuss this with a reputable financial professional who
understands your situation and has the know-how and
credentials to offer financial advice. Once you choose
a financial professional, contact the Securities
Department to confirm whether the individual is
properly registered in Illinois and if
he or she has a disciplinary history.
The department also can provide
investment guides and information
regarding investor rights.
Jesse White
Secretary of State
Spring 2003
Under provisions of Section 5 of the Illinois Securities Law of 1953, all
securities offered or sold, unless deemed exempt under Section 3 or
sold or offered within transactions as defined in Section 4, must be
registered with the Illinois Securities Department and sold by
salespersons and firms that are also registered. Canadian self-directed
retirement accounts controlled by Canadian citizens who are
temporary residents in Illinois are affected by this requirement by
being prohibited from transacting any sales or purchases for these
types of accounts while in Illinois.
To resolve this dilemma, Secretary of State Jesse White has proposed a
new limited registration exemption for dealers, salespersons and the
securities involved in these types of transactions. The proposal was
submitted to the Illinois General Assembly’s Joint Committee on
Administrative Rules in February. This legislation is in line with previous
actions in numerous other states that have approved similar
exemptions.
The three elements of the proposed exemption are outlined below:
a) A broker-dealer who is a resident of Canada and who has no
office or other physical presence in this State is exempted from
the broker-dealer registration requirements in Section 8 of the
Act, provided the broker-dealer:
1) is registered with or is a member of a self-regulatory
organization in Canada, stock exchange in Canada or the
Bureau des services financiers;
2) maintains in good standing its provincial or territorial
registration and its registration with or membership in a self-regulatory
organization in Canada, stock exchange in Canada
or the Bureau des services financiers; and
3) effects or attempts to effect transactions in securities only:
(A) with or for a person from Canada who is temporarily
present in this State with whom the Canadian person had
a bona fide business-client relationship before the person
entered this state;
(B) with or for a person present in this State whose
transactions are in a Canadian self-directed tax
advantaged retirement account of which the person is
the holder or contributor.
b) Salesperson registration under Section 8 of the Act is not
required if the salesperson:
1) represents a Canadian broker-dealer acting in accordance
with the provisions of subsection (a) of this Section; and
2) is registered and maintains in good standing the agent’s
provincial or territorial registration.
c) An offer or sale of a security is exempt from the securities
registration requirements of Section 5, 6 and 7 of the Act if the
offer or sale is effected by a Canadian broker-dealer acting in
accordance with the provisions of subsection (a) of this Section.
Secretary White proposes new
limited registration exemption
IN
THIS
ISSUE
• NEW LIMITED REGISTRATION EXEMPTION •
• ENFORCEMENT CONFERENCE •
• SEVEN TAKE EARLY RETIREMENT •
• AUDIT DIVISON REPORT •
• LEGAL NOTES FROM THE DIRECTOR •
A NEWSLETTER OF THE ILLINOIS SECURITIES DEPARTMENT • SECRETARY OF STATE JESSE WHITE