ORDER EXEMPTING FOREIGN MARGIN STOCK FROM REGISTRATION

WHEREAS the Commissioner of Banking (the "Commissioner") is charged with administering Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act, as amended by P.A. 98-162, (the "Act") and Sections 36b-31-2 et seq. of the Regulations of Connecticut State Agencies promulgated under the Act;

WHEREAS Section 36b-16 of the Act provides, in part, that: "No person shall offer or sell any security in this state unless (1) it is registered under sections 36b-2 to 36b-33, inclusive ... [or] the security or transaction is exempted under section 36b-21 .... "

WHEREAS Section 36b-21(a) of the Act states, in pertinent part, that: "The following securities are exempted from sections 36b-16 and 36b-22 ... (8)(A) any security appearing on the list of … foreign securities approved for margin by the Board of Governors of the Federal Reserve System which is not otherwise a covered security … [or] (21) any other security that the commissioner may exempt, conditionally or unconditionally, on a finding that registration is not necessary or appropriate in the public interest or for the protection of investors";

WHEREAS Section 36b-31(a) of the Act provides that "[t]he commissioner may from time to time make, amend and rescind such ... orders as are necessary to carry out the provisions of section 36b-2 to 36b-33, inclusive, including ... orders ... defining any terms whether or not used in said sections insofar as the definitions are not inconsistent with the provisions of said sections. For the purpose of ... orders, the commissioner may classify securities, persons and matters within his jurisdiction, and prescribe different requirements for different classes";

WHEREAS Section 36b-31(b) of the Act states, in part, that: "No ... order may be made, amended or rescinded unless the commissioner finds that the action is necessary or appropriate in the public interest or for the protection of investors and consistent with the purposes fairly intended by the policy and provisions of sections 36b-2 to 36b-33, inclusive ....";

WHEREAS the Commissioner finds that the entry of this Order is necessary or appropriate in the public interest or for the protection of investors and consistent with the purposes fairly intended by the policy and provisions of the Act;

WHEREAS the Commissioner also finds that registration of the securities described herein is not necessary or appropriate in the public interest or for the protection of investors";

WHEREAS the Commissioner acknowledges that in January 1998, the Board of Governors of the Federal Reserve System (the "Board") amended the definition of "foreign margin stock" in Section 220.2 of Regulation T to mean "a foreign security that is an equity security that: (A) Appears on the Board’s periodically published List of Foreign Margin Stocks; or (2) Is deemed to have a ‘ready market’ under SEC Rule 15c3-1, (17 CFR 240.15c3-1) or a ‘no action’ position issued thereunder";

WHEREAS the Commissioner also acknowledges that the Board’s action was premised on the theory that stocks having a "ready market" under SEC Rule 15c3-1, like their counterparts on the Board’s Foreign List, possessed a degree of liquidity, stability and market presence characteristic of exchange-listed securities;

WHEREAS the Commissioner believes that the Board’s development of an alternative criterion for marginability to supplement the Foreign List would bring foreign stocks satisfying SEC Rule 51c3-1 within the spirit, if not the letter, of Section 36b-21(a)(8) of the Act;

Securities Registration, Exemptions and Notice Filings