Trading funds while in the U.S.

Q – What are the requirements for holding/buying/selling Canadian mutual funds and
stocks while living in the U.S., as well as maintaining Canadian residency? Have the Investment Dealers Association of Canada (IDA) and the Securities Exchange Commission (SEC) ever come to an agreement on this? From my understanding, you can hold, but not buy, or switch, in the case of mutual funds. The last best advice I had was to simply return to Canada, complete my transactions, then return to the U.S. Is this still the wisest choice? – C.M.

A – There has been significant progress on this issue. Here’s the text of an item on the subject that I wrote for a February edition of The MoneyLetter:

More Canadians living in the U.S. or temporarily visiting there are able to trade securities in their RRSPs and RRIFs. You may recall that in 2000 the Securities and Exchange Commission (SEC) moved to ease the restrictions that effectively froze the retirement accounts of Canadians while they were south of the border. However, individual states also had to approve regulations changes.

The Investment Funds Institute of Canada (IC), which has been monitoring developments, reports that Kentucky, Maryland and Vermont recently took the needed legislative action. That brings the total number of states that are now on board to 38. All the major snowbird destinations are on that list, including Florida, Arizona, California, Texas, Hawaii, and South Carolina. Georgia is one of the few remaining holdouts among southern states that attract a large number of Canadian visitors. – G.P.