US Eases Retirement Rules for Canadian Expats Living Stateside
Published Date: 5/28/2025
Notice
Summary
The SEC wants to keep a special rule that helps Canadians who move to the U.S. manage their Canadian retirement accounts without getting taxed right away or breaking U.S. rules. This rule lets them buy and sell investments in these accounts even though the funds aren’t registered in the U.S. The SEC is asking for comments before extending this rule, which keeps things smooth for these investors without extra costs or delays.
Analyzed Economic Effects
3 provisions identified: 2 benefits, 1 costs, 0 mixed.
Manage Canadian retirement accounts
If you moved from Canada to the United States and still hold a Canadian tax‑deferred retirement account, Rule 7d-2 (17 CFR 270.7d-2) permits foreign (Canadian) funds to offer and sell securities to those Canadian retirement accounts without registering as U.S. investment companies. The rule, first issued in 2000, lets Canadian‑U.S. participants continue to buy, sell, or exchange investments in their Canadian retirement accounts instead of having to cash out and trigger immediate taxation in Canada.
Required non‑registration disclosure
If securities are offered or sold under Rule 7d-2, the written offering materials must prominently state that the securities and the issuing fund are not registered with the U.S. Securities and Exchange Commission and may not be offered or sold in the United States unless registered or exempt. The SEC staff estimates it takes about 10 minutes per offering document to add this one‑time disclosure.
Paperwork hours and legal cost for funds
The SEC staff estimates there are 3,887 publicly offered Canadian funds that could rely on Rule 7d-2 and that 194 additional Canadian funds would newly rely on the rule each year. Those 194 funds are estimated to add the disclosure to 582 offering documents (3 documents each), requiring about 97 total hours annually (582 documents × 10 minutes) and an estimated annual legal cost of $49,567 (97 hours × $511 per hour).
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