WSR 02-23-026

PREPROPOSAL STATEMENT OF INQUIRY

DEPARTMENT OF

FINANCIAL INSTITUTIONS
(Securities Division)

[ Filed November 12, 2002, 8:55 a.m. ]

Subject of Possible Rule Making: The Securities Division proposes to amend WAC 460-42A-081 to exempt, for purposes of secondary trading, securities traded on the Toronto Stock Exchange from the securities registration requirements of the Securities Act, chapter 21.20 RCW.

Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 21.20.310(8), 21.20.450.

Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: This amendment would exempt, for purposes of secondary trading, securities traded on the Toronto Stock Exchange (TSE) from the securities registration requirements of the Securities Act, chapter 21.20 RCW. The amendment would allow Washington residents to trade securities listed on the TSE, which is subject to a regulatory regime that is substantially similar to the United States scheme of regulation to which the exchanges currently recognized by the rule are subject. The TSE is the third largest stock exchange in North America and is ranked eighth in the world by market capitalization.

Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: This proposal is intended to be consistent with the North American Securities Administrators Association (NASAA) Model Secondary Trading Exemption for Qualifying Securities.

Process for Developing New Rule: The NASAA model rule upon which this amendment will be based was subjected to extensive public comment prior to adoption.

Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication by contacting William M. Beatty, Securities Division, Department of Financial Institutions, P.O. Box 9033, Olympia, WA 98507-9033, (360) 902-8760, fax (360) 704-6923, bbeatty@dfi.wa.gov, Securities Division website http://www.dfi.wa.gov/sd.

November 8, 2002

Deborah R. Bortner

Director of Securities

Washington State Code Reviser's Office