# USD DRIP in TDW RRSP



## Spudd (Oct 11, 2011)

Just thought I would post an update as to the status of the USD DRIPs in TDW RRSP's. I got a DRIP from VTI on the 27th. 

VANGUARD TTL STK MRKT ETF
CONVERT TO CAD @ 1.04600
DIV
290	
$149.85

VANGUARD TTL STK MRKT ETF
DRIP
1	
-$99.91

According to Vanguard, the distribution was .494 per share, so for my 290 shares I should have gotten $143.26 USD. After paying $95.52 USD for my dripped share (calculated based on the given conversion factor, and this seems a fair price for the day), that leaves me with $47.74 USD cash. Subtracting the DRIP from the dividends, I end up with $49.94 CAD, which multiplying by their conversion factor, comes out to exactly $47.74 USD. 

So, I think the dripping of USD dividends is now working.


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## CanadianCapitalist (Mar 31, 2009)

It looks like USD DRIPs are washed in a TDDI RRSP. Does anyone know the VTI DRIP price in USD?


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## GoldStone (Mar 6, 2011)

I got my Vanguard dividends in cash. TDW took their usual pound of flesh on the exchange rate.

Why can't they implement a similar patch for dividends in cash???

This is rhetorical, of course. We know why.


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## humble_pie (Jun 7, 2009)

GoldStone said:


> I got my Vanguard dividends in cash. TDW took their usual pound of flesh on the exchange rate.
> 
> Why can't they implement a similar patch for dividends in cash???
> 
> This is rhetorical, of course. We know why.




definitely, rhetorical.

when they wrote to me in october/13 about the upcoming patch, i promptly wrote back to request that they patch *all* US dividends in registered accounts.

converting *all* USD dividends with no FX fee would be a giant public relations victory for TDDI, i suggested, as persuasively as i could. The announcement would have drama, excitement, robust strength, would reassure so many disappointed clients, i said. It would be so much better than converting DRIP dividends now at no FX fee but the remainder of the dividends later, whenever they get around to launching a true USD dual-currency rrsp, i said.

nyet, replied the high-level mandarin. We have no plans to convert all USD dividends [at favourable rates] at this time, he said.

i didn't say anything more. It had been a monstrous 2-year mega-effort just to get them to admit, at this high level, that they were, in fact, scandalously charging double-dipped FX fees twice on USD DRIP dividends. Had been doing this for years. While never informing clients properly.

but i thought to myself that their partial gesture with respect to DRIP dividends only was weak, niggling & somewhat inappropriate, given the circumstances.

let us not forget that all other brokers, with the exception of those offering true dual-currency registered accounts with true USD tracking, are doing the exact same thing. They are charging double FX fees on USD market DRIP dividends. Even worse, most of the time their call centre representatives will deny it.

from the research i did, i believe that the double-FX problem may commence in the very CDS system itself. Like the broker's leased ISM mainframe systems, CDS would be using very old legacy systems, with parts perhaps dating even as far back as the 1950s or even before the arrival of MS DOS.

decades ago, of course, there was never anything like the hi-volume USD traffic that brokers & investors genuinely require today.

the foregoing is the brokers' excuse; however i for one am not sympathetic.


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## humble_pie (Jun 7, 2009)

now is the time to lob into the discussion the fact that the broker industry has contacted some - but not all - of the 20 or so canadian companies that pay their dividends in USD.

reportedly the brokers have asked these companies to *do* something to help their street/nominee shareholders, who are, these days, the vast majority of shareholders (most of us are street or nominee shareholders, holding our shares at brokers.)

the brokers have not offered to eliminate their predatory FX fees on those USD dividends when those shares are held in CAD accounts, which is most of the time. Rather, the brokers have encouraged the dividend-paying companies to do something on their own to help their street shareholders.

remember, officially the companies are not even supposed to know who the street shareholders are!

reportedly, barrick & potash have been so contacted. Thomson has told me that they were not contacted. Nobody seems to know who has done the contacting, but my guess is it would have to be either the IIROC or else the little-known but powerful Association of Securities Administrators.

reportedly, one company (potash) is trying to do something about the issue. Reportedly, potash will be told, by brokers, the currency in which an investor has bought the interlisted stock. That will be locked into POT's data base & dividends will be sent in the same currency, to that same investor, for the rest of eternity.

the problem with this system is that the present freedom to journal stock back & forth from one currency to the other (which we have with brokers at present) (save & except for monocurrency registered accounts, of course) ... this marvellous freedom will vanish.

it's understandable that a dividend-paying canadian company will not be able to keep up with journal crossings that an investor may do, after the initial purchase, at the broker. A dividend-paying company is going to have to keep data costs down by locking in the currency of the dividend once & for all.

but i believe that, as investors, we are much better off having the freedom to journal stock back & forth from one currency account to the other, which is the present system.


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## uptoolate (Oct 9, 2011)

Thanks for the update HP. Ever hopeful here!


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## gibor365 (Apr 1, 2011)

I published in another thread on Dec 12 "Today got email from TDDI manager that :
"on November 29th we launched the ability to have a DRIP for US dividends so that there is not a currency conversion rate charged. Please see the note below:

Dividend Reinvestment Plan (DRIP) FX Auto Wash Program: New program created to ensure clients do not incur a currency conversion for U.S. dividends reinvested in Registered Plan accounts. The service is provided automatically, and clients do not need to call our ISCs to register.

Can anyone who has any US DRIP after Nov 29 to confirm?"
Looks like it's working?


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## humble_pie (Jun 7, 2009)

uptoolate said:


> ... Ever hopeful here!


to be blunt i don't see much call for hope. 

my own test stock running as a DRIP dividend in TD registered account is goldcorp, one of the 20 canadian companies that pay USD dividends.

for both the november & the december dividends - goldcorp pays monthly - the TD converted the USD dividend into CAD at the highest FX rate i've ever seen them use. They charged 1.55%; previously i'd never seen them charge more than 1.50%.

there was no "wash." They simply bought the new share in CAD. So i paid an FX fee that was the highest i've ever known at the big green.

of course i'm thinking about moving my registered accounts elsewhere ...


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## uptoolate (Oct 9, 2011)

Well I'm with you but hope is all there is at the moment. Obviously they are very happy to skim off this money - the Golden Crumbs. As I have stated recently, I am seriously considering moving my children's accounts over to RBC before they accumulate enough complexity to make it a pain to do so later. Hearing you say that you are thinking of moving pretty much seals the deal.


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## gibor365 (Apr 1, 2011)

HP, wanted to send you private message, but got "humble_pie has exceeded their stored private messages quota ", could you please delete some?! wanted to ask you question


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## mrPPincer (Nov 21, 2011)

Spudd said:


> Just thought I would post an update as to the status of the USD DRIPs in TDW RRSP's. I got a DRIP from VTI on the 27th.
> 
> VANGUARD TTL STK MRKT ETF
> CONVERT TO CAD @ 1.04600
> ...


Thanks for the update Spudd.
My shares of VTI payed out the div in cash at the same conversion rate of $1.04600 on Dec 27.
Sad thing is the BOC closing rate on Dec 27 for US$ was C$1.0704, which adds up to a whopping one-way conversion fee of C$0.0244 in TDDI's pockets on every US$.
Or, using the BOC noon rate for Dec 27, 1.0697, it's still an outrageous money-grab of $0.0237 on the dollar.





gibor said:


> I published in another thread on Dec 12 "Today got email from TDDI manager that :
> "on November 29th we launched the ability to have a DRIP for US dividends so that there is not a currency conversion rate charged. Please see the note below:
> 
> Dividend Reinvestment Plan (DRIP) FX Auto Wash Program: New program created to ensure clients do not incur a currency conversion for U.S. dividends reinvested in Registered Plan accounts. The service is provided automatically, and clients do not need to call our ISCs to register.


gibor, I didn't notice your other post on Dec 12; if I had, I would have switch on the DRIPs.
I wish TDDI would be consistent and inform everyone equally.
I've just double-checked through all my old e-mails and there was not a word about it to me.
Why am I not surprised that TDDI seems to want to keep it hidden when they could keep raking in those heinous conversion fees?




gibor said:


> Can anyone who has any US DRIP after Nov 29 to confirm?"
> Looks like it's working?


Looks like it's working from Spudd's post above.
Have not yet seen confirmation from a second person.


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## gibor365 (Apr 1, 2011)

mrPPincer said:


> gibor, I didn't notice your other post on Dec 12; if I had, I would have switch on the DRIPs.
> I wish TDDI would be consistent and inform everyone equally.
> I've just double-checked through all my old e-mails and there was not a word about it to me.
> Why am I not surprised that TDDI seems to want to keep it hidden when they could keep raking in those heinous conversion fees?
> ...


I also didn't know it until Business Development Manager of TDDI sent me email...
From Spudd's post it's working, from HP's - not really 
weird....


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## gibor365 (Apr 1, 2011)

mrPPincer said:


> Thanks for the update Spudd.
> My shares of VTI payed out the div in cash at the same conversion rate of $1.04600 on Dec 27.
> Sad thing is the BOC closing rate on Dec 27 for US$ was C$1.0704, which adds up to a whopping one-way conversion fee of C$0.0244 in TDDI's pockets on every US$.
> Or, using the BOC noon rate for Dec 27, 1.0697, it's still an outrageous money-grab of $0.0237 on the dollar.
> ...


mrPPincer, thanks for publishing numbers! I hold US stocks in both TD and CIBC, but don't get dividends on the same day.... noe, I can compare.... and looks loke CIBC has much better rate.

On the same date I got dividends in cash from VEA: div in US 0.213 for 185	shares; I got in CAD 41.83(should've get in US 39.405), so my conversion rate was	1.061540414, much better than in TDDI (it can be even better comparing to USD DRIP in TD).
The strange thing, that I got the same day dividends from VTI with slightly different rate 1.061268556, but still pretty good, very close to BOC rate.
Do you hold LMT or CVX, so we can compare rates?


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## Spudd (Oct 11, 2011)

I believe HP is talking about other issues -- that non-DRIP dividends in USD are charged a high conversion fee, and that Canadian companies paying dividends in USD are also being charged this fee even if they are dripping.


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## humble_pie (Jun 7, 2009)

from Spudd's post the FX-free DRIP patch is working for traditional US investment vehicles with USD dividends.
however i do believe we could use more confirmations about this.
is anyone DRIPPing plain vanilla US common stocks in reg'd accounts? stuff like merck, microsoft, etc?

alas the patch is *not* working for the 20 big canadian companies that pay their dividends in USD, although this was promised.
like i posted above, my reg'd account was hit with a whopping 1.55% FX fee on the goldcorp december dividend.

the incoming USD dividend was FXed at 1.05250 on 20 dec/13.
on that day, the bank of canada noon rate was 1.0680, ie TD scored 1.55% for itself.

the big green did buy the new DRIP share on toronto, therefore there was no 2nd FX.

another disaster area imho is TD failure to properly train their staff, imho.
one of the things i had also requested - way back last may when the formal exchange of correspondence commenced - was that they train their staff to a standardized response.

they haven't ... re my ratty little goldcorp dividend, a belligerent TD rep insisted there had been no FX fee, even though the numbers (above) were staring him in the face. He also tried that goldcorp pays in CAD (it doesn't.) He also tried that the goldcorp USD dividend had been paid into US money market fund in USD (it wasn't.) At all times, he was clearly in over his head.

on this subject - adequate vs inadequate staff training - i've recently been mildly impressed to hear BMO investorline reps beginning to speak voluntarily around the edges of this complex issue. One senior BMO rep was telling me the other day how he does try, whenever clients ask him about USD dividends from the 20 canadian companies, to pro-actively inform such clients that a USD cash or margin account is always available to them, where they can hold such stocks in order to protect the dividends.

i chuckled a little bit when he confided that the concept can be difficult to explain to some clients! ah knows what he means!


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## humble_pie (Jun 7, 2009)

Spudd said:


> I believe HP is talking about other issues -- that non-DRIP dividends in USD are charged a high conversion fee, and that Canadian companies paying dividends in USD are also being charged this fee even if they are dripping.


Spudd there are a lot of closely-related issues & you are one who is very good at keeping them sorted out ... but no i was talking about my test DRIP in reg'd account.

i have 700 goldcorp there - enough for one DRIP USD dividend each month - in TD reg'd account. I'd picked goldcorp because it pays every month, therefore i could track it closely.

things are not going well. TD hit up the GG december dividend - when i bought, i'd paid in USD for goldcorp on NYSE - with a 1.55% FX fee, exactly as in the past.

as for parcelling out the observation duties, you're doing USD dividend-paying ETFs, right?
me, i'm doing the 20 canadian payors of USD dividends.
it remains to find someone who's DRIPPing regular dividend-paying US common stocks & hear about their experience ...


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## gibor365 (Apr 1, 2011)

humble_pie said:


> the incoming USD dividend was FXed at 1.05250 on 20 dec/13.
> on that day, the bank of canada noon rate was 1.0680, ie TD scored 1.55% for itself.


In Investot Edge I got rate exactly 1.068 for G div


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## mrPPincer (Nov 21, 2011)

gibor said:


> Do you hold LMT or CVX, so we can compare rates?


No, but I have some VWO which payed the dividend on the same day, Dec 27, (in the morning I believe, so that could have something to do with the big difference in rates between CIBC and TDDI, if CIBC settles later, because the BoC closing rate the day before, Dec 26, was 1.0619).

My 308 VWO shares payed a div of US$66.53 and TDDI converted it to C$69.59 using the same conversion rate of 1.046 that they used for my VTI, much worse than the rates you're getting with CIBC.


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## humble_pie (Jun 7, 2009)

gibor said:


> In Investot Edge I got rate exactly 1.068 for G div


interesting ... thankx for the info ... the fact is that this (unjust or hidden FX fees on USD dividends) is a known issue that is beginning to ferment, like yeast, across the entire brokerage community. Oh, the power of the pen!

it looks to me like CIBC is working to deal decently with the issue. You got a great rate there, gibor.


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## gibor365 (Apr 1, 2011)

Yes, looks like CIBC rates are much better... want to see 1 more confirmation for US div payment... 
Looks like numbers Rob C. article in Globe and Mail about brokerages rating not so correct (unless CIBC has some special rates for dividend conversion)...
Although I recall that about 2 years ago when I bought 2 different US stocks at the same date in TD and CIBC, CIBC rate was also better...
The biggest issues I have with CIBC, it's "gambiting" always need to call them


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## madMike (Feb 10, 2012)

I don't have the info on cdn company payers of dividends, but I do have VTI and VXUS with TDW (or TDDI? ...still says Waterhouse on site).
According to Spudd, with a distribution of .494 per share for VTI, my 216 shares should give 216 x .494 = $106.70 USD. Is this correct? Because my Net Amount column shows $111.61 CDN, which would be $106.60 x 1.046 (fx fee?). Is this backwards? It seems like they converted to CDN but didn't take their FX.
I've called TD after the last discussion on here that you guys are referring to back in Nov., and told them to stop dripping $US payers (VTI, VXUS). 

Also, a while back, Canadian Capitalist mentioned the $250 that BMO is offering for the switch. People here have seem to have good things to say about Royal Bank, but has anyone used BMO? The $US accounts would be the enticement for me; like a lot of folks here, I'm tired of waiting on TDW.


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## GoldStone (Mar 6, 2011)

madMike said:


> According to Spudd, with a distribution of .494 per share for VTI, my 216 shares should give 216 x .494 = $106.70 USD. Is this correct? Because my Net Amount column shows $111.61 CDN, which would be $106.60 x 1.046 (fx fee?). Is this backwards? It seems like they converted to CDN but didn't take their FX.


They converted the dividends at a rate of 1.046. The current market rate is somewhere around 1.065. You should have received $106.70 x 1.065 = $113.64. You got $2 less. That's what TDDI took from you.


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## madMike (Feb 10, 2012)

Thanks GoldStone. They always get their cut, eh?


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## GoldStone (Mar 6, 2011)

Those juicy bank dividends don't grow on trees.


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## humble_pie (Jun 7, 2009)

mike i've had a backup account at bmo for years. They are fine. Other cmf members have said BMO is fine.

in my case i have a few fancy option trading requirements & they don't handle these very well. I mean, the trading control infrastructure - which belongs to BMO Nesbitt - can handle complex option orders beautifully; however the interface on the discount website is not sophisticated & certain option commish are far too high.

all this being said, i don't imagine that it affects very many clients. IMHO a client who doesn't do a lot of options will be extremely well served at BMO.

a huge BMO advantage will be the dual-currency registered accounts with full USD tracking capability.

but it gets even better. BMO clients can gambit currencies effortlessly & instantly online for just a pair of low $9.95 commissions. In all accounts. Gambits work perfectly in cash, margin & registered.

btw, how to tell if TD or any other broker is charging an FX fee: determine what, exactly, was the rate they used to convert a payment such as a dividend. Even if they don't state on statement or website, you can work out the math for yourself.

next, look up the bank of canada noon rate for the relevant day. Some people use the website XE.com. Both these sources show the spot rates - ie wholesale rates from the trading floors of the world's biggest money centre banks.

a gambit trader can capture close to these rates by arbitraging a pair of currency trades.

comparing these spot rates to the broker rate will indicate what kind of FX fee the broker is charging, TD's has recently stuck in the 1.35-1.48% range, indicating a spread of just under 3%. But suddenly last week or so, the big green appears to have jumped its FX fee to 1.55%; ie the spread rate may have risen to 3.10%. i don't know whether this is a trend or an isolated incident.


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## madMike (Feb 10, 2012)

Thanks HP. It's the separate $US accounts that have decided it for me. I follow and appreciate all the ground work and heavy lifing done by yourself and others here. If only just getting the information out to 'inquiring" minds like me. I am basically a couch potato investor anyway, several gambits/yr. for $US ETFs. But I found it galling that these brokerages "double-dipped" unsuspecting mortals like myself for all this time with the DRIP conversions. 
It's goodbye TD, hello BMO.


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## gibor365 (Apr 1, 2011)

madMike said:


> It's goodbye TD, hello BMO.


There are also conditions when and how you can get those $250, it's not if automatically when you open account, also unclear if BMO refunds transfer fees. BMO will let you to deposit US dividends into US account, but won't allow to DRIP them.
Otherwise, looks like BMO is pretty good.
Another thing that still preventing me from moving to BMO (except all hussle and time I gonna spend), how fast will be done transfer....meaning for how long your equities will be locked? What happens if during re-registration your should get dividends or you have pending trades, also not all TD MF can be transfered....
P.S. TDDI continue promissing that USD RRSP will be available Q1 2015.... Who really beleives it?!


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## GoldStone (Mar 6, 2011)

gibor said:


> also unclear if BMO refunds transfer fees.


They do, up to $200, if you qualify for their 5 Star program. You need 250K in assets to qualify.

https://www.bmoinvestorline.com/home/popups/exclusive-benefits


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## CanadianCapitalist (Mar 31, 2009)

gibor said:


> There are also conditions when and how you can get those $250, it's not if automatically when you open account, also unclear if BMO refunds transfer fees. BMO will let you to deposit US dividends into US account, but won't allow to DRIP them.
> Otherwise, looks like BMO is pretty good.
> Another thing that still preventing me from moving to BMO (except all hussle and time I gonna spend), how fast will be done transfer....meaning for how long your equities will be locked? What happens if during re-registration your should get dividends or you have pending trades, also not all TD MF can be transfered....
> P.S. TDDI continue promissing that USD RRSP will be available Q1 2015.... Who really beleives it?!


I take it you have your chequing accounts at TDCT. Have you investigated how easy it is to transfer money to and from your TD account?

The other issues can be managed. It should be easy to negotiate a full refund of every transfer fee. In my experience, the receiving broker is almost always willing to refund transfer fees. Also, when you do a transfer, any dividends paid into the old account after the move will also get transferred into the new account.


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## GoldStone (Mar 6, 2011)

CanadianCapitalist said:


> I take it you have your chequing accounts at TDCT. Have you investigated how easy it is to transfer money to and from your TD account?


I have no direct experience, but it should be very easy. BMO IL non-registered account doubles as a bank account.

https://www.bmoinvestorline.com/hom...cts-and-services/account-features-inquiries#4

BMO IL wrote:



> *How can I access the cash in my BMO InvestorLine investment (non-registered) account?*
> 
> If you have opened a Cash or Margin account with us, we have automatically included AccountLink® Service as part of your account features. AccountLink Service consolidates your financial requirements into one easy-to-manage package. AccountLink is a service that we include for all non-registered accounts. It wraps the convenience of a BMO Bank of Montreal chequing account in with your BMO InvestorLine securities account.
> 
> ...


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## CanadianCapitalist (Mar 31, 2009)

Thanks Goldstone. Good to know that it appears to be easy to move money to and from BMOIL.


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## warrdogg (Feb 8, 2013)

I am with RBC DI and they said VTI (or VXUS) is not eligible for a DRIP. I get my dividends invested in my USD RSP account in US dollars.


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## gibor365 (Apr 1, 2011)

warrdogg said:


> I am with RBC DI and they said VTI (or VUS) is not eligible for a DRIP. I get my dividends invested in my USD RSP account in US dollars.


I don't know about RBC, but in BMO you cannot DRIP any US equity.

CC or anyone esle..., did you moved any registered account out of TDDI recently?
CC, I moved twice locked RRSP into LIRA, whole process from submitting application until money were available in discount in CIBC IE took about 4 weeks, and as as I remember, for about weeks or so , money were in "transition", thus I saw redemption in LRRSP, but thre were no money in CIBC. I'm not sure how it workes between discount brokerages


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## humble_pie (Jun 7, 2009)

re the BMO $250 incentive gift for a $100,000 account. This promotion apparently ends 6 jan/14 & includes 2 months of free trading on BMO's new mobile app, up to a maximuum of 250 trades.

but after expiration of this offer, they'll have more. The cashback offers always have the same snag, which i'll elaborate.

the $250 gift is payable at the end of 6 months.

the real catch is more subtle. As i recall from similar BMO deals in the past, New Investor cannot withdraw during the 6 months, unless he overcontributes initially or makes additional new deposits during the 6 months.

in other words, [(initial contribution + additional deposits) - withdrawals] must always remain above $100,000. Dividends & interests earned by New Investor during this 6-month period don't count as additional deposits.

i found out the hard way. The first time i entered such a program at BMO, i withdrew $15k during month 3, so the cashback gift was forfeited.

the 2nd time i was cagier. I made sure i had extra funds somewhere else, then injected 100k into BMO account & left it there for 6 months. No withdrawals. At that time, the prize was $100. At the end of 6 months, BMO paid like little lambs.


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## Beaver101 (Nov 14, 2011)

All brokerages should provide an estimated timeframe (under their FAQs) it would take them to transfer your funds from the bank to their discount brokerage or any other financial institution to their discount brokerage (ie. another bank or an insurance company). If the bank and discount brokerage falls under the same umbrella group (eg. BMO and BMOIL or RBC or RBC DI), then the transfer should not take more than a week. But this is "provided" you have all your papers in order (eg. LIRA require additional paperwork submission to CRA, provincial addendum).... transfers from non same financial institution ie. say CIBC IE to BMOIL .. wouldn't be surprised it would take 4 weeks for a LIRA .. perhaps RRSP transfers wouldn't take that long... transfers from an insurance company to a discount brokerage takes about 6 to 8 weeks ... and this is no guarantee. Also, don't do it during the Xmas holidays ... you can be guaranteed it will take 6+ weeks ... because 1,001 excuses offered by the brokerage ... :hopelessness:

Have a look at the brokerage's FAQ and decide if you want to attempt this feat for your circumstances (LIRA to LIRA) .. patience is virtue I tell ya. 

Perhaps non-registered / cash accounts / margin accounts transfers are a lot quicker given there is less paperwork.


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## gibor365 (Apr 1, 2011)

Beaver101 said:


> But this is "provided" you have all your papers in order (eg. LIRA require additional paperwork submission to CRA, provincial addendum).... transfers from non same financial institution ie. say CIBC IE to BMOIL .. wouldn't be surprised it would take 4 weeks for a LIRA .. perhaps RRSP transfers wouldn't take that long...


Yes, this is what i was talking about... also when transfering make sure you don't hold any e-Series MF (maybe some others) or transfer will be rejected.... 
So, for several weeks you practically cannot make transactions on your account.... probably you shouldn't have any pending trades during transfer and if you should get dividends during "transfer window" and don't get, whom you should contact?


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## GoldStone (Mar 6, 2011)

gibor said:


> So, for several weeks you practically cannot make transactions on your account.... probably you shouldn't have any pending trades during transfer and if you should get dividends during "transfer window" and don't get, whom you should contact?


"Several weeks" is a stretch. Brokers use ATON system to handle the transfers. It's all done electronically, except the initial paperwork between you and your new broker. The actual transfer of assets is very quick.

If you get dividends in the closed account, the old broker must send them over in a separate transfer. Contact your new broker if you don't get them.


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## gibor365 (Apr 1, 2011)

In December I traded in CIBC IE twice US currencies.....was checking now and I don't really understand why their rate is so closed to BOC Spot rates:
Dec 13:
sold US MM and bought VEA. Called IE for "FX netting" and got rate 1.0590. BOC rates for this date:
Noon 1.0595
High 1.0657
Low 1.0586

Dec 16:
bought POT on TSX, sold POT on NYSE, bought DEM on NYSE and US MM, called IE and got rate 1.0589
for all transactions. BOC rates for this date:
Noon `1.0577
High 1.0593
Low 1.0573
Or I don't understand something or IE has very good rates and gambits doesn't really make sense unless gambitting 50K or more?


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## humble_pie (Jun 7, 2009)

not yet noticed: the TDDI spread rate for FX fees has now quietly crept up to 3.20%.

a few months ago CC conducted an informal poll in this forum. On a designated morning we contacted our individual brokers & reported the spread rates in cmf.

most FX rates on that date were hovering just below 3%. Around 2.90% was typical. Only questrade was an aberration, with rates hovering close to 4% - but questrade is one of the brokers offering true USD rrsps, so its accounts, presumably, would not have many conversions.

however TD's rate has now soared north of 3% & i imagine all other brokers are in that league also, or soon will be.

one of the surprising facts i learned when digging on this story is that there are no regulations whatsoever that govern how high brokers' FX fees can go. Nor are there any regulations requiring brokers to inform clients about the FX fees they are, in fact, charging.

parties complaining to IIROC about brokers' FX fees on USD dividends are told that the brokers are not breaking any regulations, therefore the parties have no complaint.

apparently jurisdiction on the issue - the issue being broker practices including the charging of foreign exchange fees - lies with the individual provincial securities acts & the individual provincial securities authorities, most of which are weak & powerless. No federal ministry, certainly not Finance or the Bank Act - can intervene.

a national securities authority might be able to act to protect investors' interests; but right now there is no authority to turn to.

on a practical basis this means that nothing can be done top-down to help investors. It means that solutions have to be bottom-up, ie investors themselves have to learn the necessary information somehow, then vote with their feet by moving their accounts to brokers that are less predatory.


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## humble_pie (Jun 7, 2009)

CanadianCapitalist said:


> I take it you have your chequing accounts at TDCT. Have you investigated how easy it is to transfer money to and from your TD account?


it's possible to transmit funds between bmo investorline account & tddi broker accounts by simple online Bill Payment. I tested it one-way & it worked (bmo to td) but haven't tested the other direction yet.

it's true that BMO investorline broker does equip every client with both a CAD & a USD bank account. These are how funds are deposited to or withdrawn from BMO IL.

however the bank services allowed by these accounts are limited. There are only 2 free withdrawals/cheques per month, excess withdrawals/cheques are charged.

parties intending to use BMO for all principal banking services are usually advised to get a regular BMO bank or chequing account, in addition to the 2 freebies that come with a discount broker account.


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## Xoron (Jun 22, 2010)

gibor said:


> In December I traded in CIBC IE twice US currencies.....was checking now and I don't really understand why their rate is so closed to BOC Spot rates:
> Dec 13:
> sold US MM and bought VEA. Called IE for "FX netting" and got rate 1.0590. BOC rates for this date:
> Noon 1.0595
> ...


CIBC FX Netting is essentially locking in the same rate on the buy and sell side. So it could be 1.1 or 0.99, doesn't really matter too much provided you're buying and selling approximately equivalent USD amounts of stocks. This is usually what I'm doing (selling $x of USD stocks and buying $y of USD stocks where $x is pretty close to $y), the actual FX netted rate is almost irrelevant for me.

And if you use the norbit's gambit to get your money into USD, then it's all good at CIBC IE (just a bit of a pain in the a$$)


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## CanadianCapitalist (Mar 31, 2009)

humble_pie said:


> not yet noticed: the TDDI spread rate for FX fees has now quietly crept up to 3.20%.
> 
> a few months ago CC conducted an informal poll in this forum. On a designated morning we contacted our individual brokers & reported the spread rates in cmf.


This morning, the TDDI spread is back down under 3 percent. TDDI quotes 100 CAD to USD back to CAD at 97.06.


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## madMike (Feb 10, 2012)

humble_pie said:


> however the bank services allowed by these accounts are limited. There are only 2 free withdrawals/cheques per month, excess withdrawals/cheques are charged.
> 
> parties intending to use BMO for all principal banking services are usually advised to get a regular BMO bank or chequing account, in addition to the 2 freebies that come with a discount broker account.


I can live with that. I have a historic TD Canada Trust chequing account (not available anymore), unlimited free transactions if you keep $1000.00 plus, but no interest paid out, and I am loathe to leave a grand sittin' around not working for me. My TDCT savings account (bank side, not brokerage) allows two free withdrawals per month, but I rarely need to use that.
I can live with leaving registered accounts alone (no withdrawals below $100,000) for 6 months. TFSA is just basically retirement money anyway along with RSP, unless an ice storm knocks a tree into my house. :02.47-tranquillity:

So like HP noted, time to vote with my feet. BMO sounds ok to me. I predict that one year from now, we'll be quoting TD reps: "US dollar registered accounts coming 1st quarter 2015!".


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## gibor365 (Apr 1, 2011)

Xoron said:


> CIBC FX Netting is essentially locking in the same rate on the buy and sell side. So it could be 1.1 or 0.99, doesn't really matter too much provided you're buying and selling approximately equivalent USD amounts of stocks. This is usually what I'm doing (selling $x of USD stocks and buying $y of USD stocks where $x is pretty close to $y), the actual FX netted rate is almost irrelevant for me.
> 
> And if you use the norbit's gambit to get your money into USD, then it's all good at CIBC IE (just a bit of a pain in the a$$)


Just called to CIBC IE and yes, FX netting rate is not rellevant, as they give you some average buy/sell rate..... however, rep couldn't tell me what is FX rate if I buy US stock...the only thing she told me that for Registered accounts FX rate is preferable and very closed to spot rate and CIBC doesn't get any income from FX convertions in registered accounts.. The question is what amount worth gambitting.... As by "big secret" rep told me that some guys did research and figured that buying US equities directly is better


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## gibor365 (Apr 1, 2011)

Got another proof that CIBC FX rates are much better (at least for registered accounts). On Dec 31 got dividends from 2 different US ETFs. 
I got FX rate at CIBC IE 1.063486298 and in TDDI 1.048990808. Spot noon BoC rate was 1.0636. So IE gave perfect rate very close to spot rate. 
Interesting if I get same FX rate not only for dividends conversion, but also for buying equities?! If yes, imho, really no need for gambit in EI registered accounts.
TDDI rates are really sux  If you get 10K in dividends in US$, you lose about $145 on TD FX rate comparing to CIBC. Also considering fact that trading fee in CIBC $6.95 vs $9.99 in TD, I like CIBC much more


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## gibor365 (Apr 1, 2011)

Did some more research regarding CIBC IE FX rates in Registered accounts and came to conclusion that "gambit" over there doesn't make sense, as you will pay more in trading fees.
I tooks randomly 5 trades from LIRA and RRSP when I bought US stock directly (without FX Netting or so), 
Rates I paid: 1.036, 1.029, 1.0325, 1.029, 0.998
BoC Spot noon rates for the same dates are: 
1.0348, 1.029, 1.0314, 1.0285, 0.9987
So if I'd buy those 5 stocks without netting (assuming I invest 10K in every stock), the differencr between rates I paid and spot noon rate is $21 ! The maximum difference between rate I paid and spot rate (again for buy of 10K) wa jusr $12, and 1 time I'd pay even less than spot rate by $7


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## gibor365 (Apr 1, 2011)

Last proff that TDDI has ridiculous FX rate,
Jan 2 got dividends in CIBC and TD, got rate in CIBC 1.063201418, in TD , 1.047400881
Too bad I didn't do calculations earlier..... would save some cash.... what the hell I need to do "gambits" in TD and pay $20 trading fees, if in CIBC I just get it for spot rate!!!


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## uptoolate (Oct 9, 2011)

Ouch. That is impressive - does CIBC market this at all? Do you know what kind of rates one gets in non-registered accounts?


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## gibor365 (Apr 1, 2011)

uptoolate said:


> Ouch. That is impressive - does CIBC market this at all? Do you know what kind of rates one gets in non-registered accounts?


No! This was very surprising that their sales stuff (include managers) doesn't even aware of it! 
For non-registerd I believe rates will be similat to TD's


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## humble_pie (Jun 7, 2009)

uptoolate said:


> Ouch. That is impressive - does CIBC market this at all? Do you know what kind of rates one gets in non-registered accounts?



uptoolate - you seem to be assuming that the FX rate which cibc uses for stock buy/sell transactions is the same as their FX rate for dividend USD/CAD conversions in rrsp.

but there is not necessarily any connection between the 2 types of transactions.

this is a thread about FX fees on dividend conversions in rrsp accounts. It's not a thread about gambit trading. They are 2 entirely different types of transactions.

gibor is somehow assuming - without any testing - that an equity buy or sell which crosses currencies will indeed be FXed at the same rate he has observed for very recent dividend conversions. But i think that such an assumption is illogical. I think that a reality test is required before anyone can conclude anything.

as for non-registered accounts, the above-quoted question is somewhat meaningless, don't u think? Non-registered CAD & non-registered USD accounts are maintained separately or quasi-separately at all canadian brokers. That is, USD investment products are bought & sold in USD with no FX fee. USD dividends are paid in USD with no FX fee. The same is true for CAD transactions & CAD dividends on the canadian side of all these non-registered accounts.

(aside to gibor) if you feel you must turn this thread away from a discussion of FX rates on dividends - which is its true topic - into yet another discussion of gambitting, why don't you go ahead & test your theory with an actual cross-currency stock purchase in rrsp at cibc?

ie your test should buy a US stock & pay for it with canadian dollars. You would first have to disable any "currency netting" or "auto-washing" currency procedure you have already set up for this cibc account, because if you don't so disable, the platform is going to pay for the new US purchase in USD, out of US MMF.

so first disable, then buy, then watch to see what the system does when it goes to pay for that new US stock in CAD. I for one would not be surprised if the FX rate charged for stock transactions is vastly different from the rate used for dividend conversion. I for one would expect cibc to charge an FX fee at the usual broker spread rate, which is about 3% these days.


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## uptoolate (Oct 9, 2011)

Good point hp. I had made that leap and obvioiusly didn't read gibor's post critically enough. I thought he was talking about buying US stocks with CAD and getting near spot exchange rates. My bad. Perhaps he will do the experiment for us as you suggested.


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## gibor365 (Apr 1, 2011)

HP, as I mentioned in post before: "I tooks randomly 5 trades from LIRA and RRSP when I bought US stock directly (without FX Netting or so), 
Rates I paid: 1.036, 1.029, 1.0325, 1.029, 0.998
BoC Spot noon rates for the same dates are: 1.0348, 1.029, 1.0314, 1.0285, 0.9987".

Those rates from my buys in 2013, I did one time buy on the same date in both TDW and IE about 2-2.5 years ago, I need to retrieve old statements to give exact numbers.
P.S. Lately all my buys/sells in TWD were thorough "US wash", so I can only give old data


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## humble_pie (Jun 7, 2009)

gibor it's hard to believe you would have done 5 (five!) trades in registered account at TD, in one year, without a gambit. Are you saying you had 5 stock buys or sells at TD just last year where you failed to gambit the currencies but instead allowed the broker to charge its FX fee?

why would you do that? i inquire because i've known for at least a couple of years that you know precisely how to gambit. 

paying broker FX fees on stock buy/sells should be a thing of the past. Also, a good idea is to get the amount of USD up to speed - that is, gambit as much as one thinks is appropriate for one's overall portfolio - and then leave the currency as is. Utilize USD MMF as the bridge between stock purchases. Rarely or never should one gambit the US dollars back into the native currency.

flipping currencies back & forth is a horrible waste of time, trouble, effort, stamina & commish $$, imho. Me, i might do one (1) gambit a year, but quite often none.


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## humble_pie (Jun 7, 2009)

what gibor is telling us about developments re FX rate on USD dividends in rrsp at cibc broker is part & parcel of the breaking story about how broker improvements on this specific matter - FX fees charged on USD dividends in registered accounts - are fermenting like yeast at brokers across canada.

ya'll recall how haroldCrump was telling us that scotia ITrade began wafting his USD dividends into his rrsp account, starting last july, converted at bank of canada rates?

tddi has also just begun its famous laundry procedure on USD DRIP dividends in registered accounts. According to the big green, a new patch is supposed to wash USD DRIP divvies clean, with no FX fee. Some cmf members have recently posted here that this is indeed the case.

however i've discovered, from my own personal test in goldcorp dividend drips in reg'd account, that USD DRIP dividends from the 20 canadian companies that pay USD dividends still wash as dirty as ever, tch. 

i also sincerely believe that it was a huge mistake on the part of the TD to fail to convert all USD dividends in rrsp at spot or bank of canada rates. What they chose to do - in a baffling sort of cheapskate niggliness - was to wash only the DRIP dividends. Cash dividends are still being FXed at regular rates, which now seem to be higher than ever. Couple weeks ago, in registered account, i was charged an FX fee of 1.55% on a dividend. It's the highest rate i've ever seen at the TD.

this cheapskate niggliness becomes even more baffling when one considers that in the exact same recent month - december 2013 - tddi began telling inquirors that the infamous USD rrsp has now been postponed until 2015. That's such a long way off & there have been so many postponements that one wonders why they don't try to hang onto any remaining goodwill from their clients by promptly offering all USD dividends in registered accounts converted at true spot or bank of canada rates.

if 2 other brokers - scotia, cibc - can do this, the big green should pull up its socks


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## gibor365 (Apr 1, 2011)

humble_pie said:


> gibor it's hard to believe you would have done 5 (five!) trades in registered account at TD, in one year, without a gambit. .


HP, you misunderstood me  Those 5 trades I did at CIBC IE and as you can see their FX rate is extremely close to spot rate.
In TDDI I did all US stock trades using a gambit/US wash, this is why I cannot tell you what would be a real FX rate at TD, but truly I hardly beleive that it would be even close to CIBC one.....I'll send email next week to on of the managers ar GTA West asking queston about FX rate comparing to CIBC one....
All this Xmas story about USD RRSP in TDDI started to piss me off, one manager told me that in will be available in June 2014, than another one (Business Development Manager) sent me email "What I can tell you is that it is a strategic priority for fiscal 2014 and our hope is that it will be live by Q1 2015". 
At CIBC IE I got answer that that they are planning it , but there is still in process on "ball park". But at least CIBC gives me good FX rates.......


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## humble_pie (Jun 7, 2009)

gibor the cibc appears to be giving you so close to spot rates we have to call em spot aka bank of canada rates. These are the rolls royces, no wait the lamborghinis, of FXland. Things don't get any better than this. Good for you for reporting all this.

what is amazing is that cibc would be offering those same rates for stock buy/sell transactions. Wondering if other monocurrency registered account brokers are doing this?

what i can observe & understand these days is a gradual movement towards clarity & fairness by the brokers, who are, one by one, a little at a time, ceasing to charge outrageous FX fees on USD dividends in rrsp. These are the monocurrency reg'd account brokers, of course. The dual currency brokers have already solved this problem - but there are only 3 of them to date, plus Qtrade, which reportedly has a small FX fee on registered accounts to cover its costs.

all brokers are acting as trustees for their registered accounts. Jurisprudence across centuries of common law binds them to act always in the best interests of their beneficiaries. This rules out predatory seizures of FX fees on dividends without even disclosing the same on statements to innocent client beneficiaries - clients who therefore cannot easily understand what's going on. Which is what most brokers have been doing all these years (barrick switched to USD dividends 21 years ago, so it's been a long time already.)

i can understand the brokers acting on the FX dividend issue now, because the cat is out of the bag - in large part thanks to some journos & especially to cmf forum & to CC on his own canadiancapitalist blogspot. Both of these have published copious threads, posts & articles dealing with the dividend FX issue over the past 2 years. These have shone the light upon the brokers' previously hidden & therefore unnoticed greed.

turning now to the question of FX fees on stock buy/sell transactions in registered accounts, i personally have no experience with these. Because, years before the TD introduced its "washing" laundry procedure in rrsp, i was already "washing" any USD trades i ever did in rrsp on my own, by hand (it's still possible to do this manually; a client does not have to be enrolled in TD's autowash program.)

brokers in general have been far more careful to provide FX fee relief in registered accounts for stock buy/sell transactions following the 2 big class action lawsuits on this issue. One - at roybank - has already been settled. The other one - at BMO - is still in progress, in fact the hearings have not even started yet. Summaries of the case to date are published on the website of the law firm for the class. This is Paliare Rolland, one of canada's top boutique litigation law firms. They are representing a class of BMO registered account holders that, as a class, does not exist any longer. It dates back to a period a few years ago when BMO was - tch - charging FX fees without one single sign of acknowledgement anywhere. Talk about predatory greed!

the Paliare/BMO case, which has not yet reached the hearings stage, is an important action. I've noticed that BMO is keeping its nose squeaky clean on the FX issue these days, in fact ever since the Paliare suit was filed. 

namely, BMO now offers a true USD rrsp. BMO agents are specifically trained to individually assist incoming clients who are transferring monocurrency rrsps from other brokers in setting up their dual-currency BMO rrsps correctly (stocks paying USD dividends have to be moved to the US side of a new BMO reg'd account; this usually requires manually journalling them over, one by one, to USD side, since such USD payor stocks always arrive on canadian side from the monocurrency brokers.)

as the old chinese proverb says, May you always live in Interesting Times! big change is underway these days at canadian brokers with respect to the way they hold, officially report in accounts & collect dividends from US securities - in the critically-sensitive registered accounts where they are acting as trustees.


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## uptoolate (Oct 9, 2011)

So the quick version is that CIBC did indeed give gibor very near spot (BOC) Forex rates on US stocks purchased with Canadian dollars? Maybe someone else using the CIBC platform could confirm this? Granted, HP, that this thread was about drips and TDDI, but I think that this is an important development. Hopefully if true, it reflects a growing trend.


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## humble_pie (Jun 7, 2009)

uptoolate said:


> So the quick version is that CIBC did indeed give gibor very near spot (BOC) Forex rates on US stocks purchased with Canadian dollars? Maybe someone else using the CIBC platform could confirm this? Granted, HP, that this thread was about drips and TDDI, but I think that this is an important development. Hopefully if true, it reflects a growing trend.


u are right! it's amazing how quickly the bank broker joker cards are tumbling down now.

when u think that the pressure has mostly come from 2 places - this forum plus CC's canadiancapitalist blogspot - it's pretty incredible.

new developments are too recent to yet be classed as permanent imho. But tentatively it looks like we may have, with respect to the monocurrency rrsp brokers:

1) cibc in front with both dividends & stock buy/sell transactions tracking at BOC rates;

2) scotia ITrade next with dividends being converted from USD to CAD at BOC rates;

3) tddi trailing in 3rd with only true USD DRIP dividends being converted at BOC rates via a new patch; meanwhile canadian-stocks-paying-USD-DRIP-dividends are still being hit up with FX fees; meanwhile USD cash dividends are still being hit up with FX fees. This response on the part of TD is disappointing imho.


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## uptoolate (Oct 9, 2011)

Thanks for the summary. It seems like the same as when I go to Costco and the grocery store. Always in the slowest line!! Wake up TD!


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## gibor365 (Apr 1, 2011)

uptoolate said:


> Maybe someone else using the CIBC platform could confirm this? .


I'd like to see it too


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## gibor365 (Apr 1, 2011)

Did more digging into old statement and found that on Feb 1, 2012 I bought US stocks in both TDW and CIBC IE. BoC Noon rate was 0.9971, CIBC gave me on purchase 1.002 and TDW 1.01706! CIBC rate divide by BoC 1.005 and TDW 1.02. Assuming I buy US shares for 10K, in IE I'd overpay $50 (comparimg to BoC rate) and in TD $200. So, CIBC is a clean winner!

More numbers, I did simulation how much I'd overpay comparing to BoC noon rate if I buy 10K USD equities for all my purchases in TD and CIBC on different dates when I really bought US equities:
CIBC: 
Year 2011:
Jan 30 $48, Feb 1 
Feb 11 $58, Feb 25 $114, Mar 24 $67, Aug 16 $64
Year 2012:
Jan 30 $48, Feb 1 $49, Mar 12 $95, Oct 23 (-$65) - so I got FX rate bettter that BoC rate! Looks like in the middle of 2012 CIBC changed rates policy and started to give excelent FX rates.
Year 2013: 
Feb 1 (-$7), Feb 11 (-$5) - again better rate than BoC's, Feb 21 $15, Mar 1 $6, Mar 5 $1, Mar 6 $12, Jun 4 $13

Now for TDW (HP was right that I used lately only US wash trades, so trade dates are pretty old):
Year 2011:
Jan 24 $188, Feb 18 $183, Aug 12 $203, Dec 1 $302
Year 2012:
Feb 1 $200, Feb 15 $221
I don't have any buys (without washing ) in 2013, so cannot compare rates, but for 2011 and 2012 , again, CIBC is a winner, and I doubt that TD could've match CIBC rates in 2013 as CIBC gives you practically BoC spot rate.

Considering fact that CIBC charge 6.95 for trade vs 9.99 TD, I really completely changed my opinion about CIBC IE from very negative to very positive 

P.S. After my extensive research CIBC should hire me as an advisor  Funny part that even CIBC managers are not aware about their excelent rates


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## Xoron (Jun 22, 2010)

Gibor, your rates may also be due to the size of your portfolio. I'm also with CIBC IE, but because I'm usually buying / selling same $ amounts, I FX net. So I don't have many examples I can use to see if I get the same FX rates. Are you using the rates on the trade date or settlement date?

I'll look back over some previous IE statements to see if I can figure out what my rates have been in the past.


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## madMike (Feb 10, 2012)

Just a note back to the original discussion on this post: I visited a BMO branch to start the transfer from TDDI to BMOIL for the $250 promo available up to today for new accounts over $100,000, and I was told that starting Jan. 7, the NEW promo is $300 bribe. So naturally I will wait until later this week to make the switch, or at least start the ball rolling. Already sold e-series and proprietary TD funds.


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## mrPPincer (Nov 21, 2011)

gibor said:


> CIBC:
> Year 2011:
> Jan 30 $48, Feb 1
> Feb 11 $58, Feb 25 $114, Mar 24 $67, Aug 16 $64
> ...


gibor judging by these numbers it looks like CIBC quietly and without any fanfare started doing conversions at as fair a rate as one could hope for sometime before Oct 23 2012.

Interestingly, that was around the time when we had this thread running, where I was on a rant about TDDI's double dipping:
http://canadianmoneyforum.com/showt...ouse-charges-2-8-for-DRIP-of-US-RRSP-holdings
and also when CC did this blog on the same thing:
http://www.canadiancapitalist.com/double-dipping-on-currency-conversions-in-us-dollar-rrsp-drips/

It looks like CIBC took notice and immediately did the right thing, whereas TD still has it's feet firmly planted 15 months later; it's like trying to pull the fattest pig kicking and squeeling away from the trough when there's still a lick of gravy in there.



Spudd said:


> DRIP from VTI on the 27th.
> 
> VANGUARD TTL STK MRKT ETF
> CONVERT TO CAD @ 1.04600


I also had USD dividends on the 27th in my TD registered account, two of them, both converted at 1.04600.
BoC noon rate on Dec 27 was 1.0697.
TD's cut on a *one-way* trip from USD to CAD on the 27th was 0.0237!!!

0.0237 / 1.0697 = 2.216%

So let me reiterate, that's over 2.2% charged to each and every TDDI customer who had any reg. acct. dividends or dividend balance after dripping, just for a one-way conversion.
TD still has it's nose in the trough.

It's definitely time to take another look at CIBC.
Not only do they offer lower trading costs, now they seem to be doing all USD conversions at spot. 

One more thing that did interest me about them was that if one keeps over $150K* in CIBC index funds they offer a MER discount of 0.63% that makes them look more attractive than TD's e-series, with a greater variety of low-cost funds, the one negative thing being that if during a market crash your balance drops below you'd be back at regular MERs.


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## gibor365 (Apr 1, 2011)

Xoron said:


> Gibor, your rates may also be due to the size of your portfolio. I'm also with CIBC IE, but because I'm usually buying / selling same $ amounts, I FX net. So I don't have many examples I can use to see if I get the same FX rates. Are you using the rates on the trade date or settlement date?
> 
> I'll look back over some previous IE statements to see if I can figure out what my rates have been in the past.


I check on Trade date.


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## gibor365 (Apr 1, 2011)

_It's definitely time to take another look at CIBC.
Not only do they offer lower trading costs, now they seem to be doing all USD conversions at spot. 
_
This is what I'm thinking.... I have accounts in TDDI and CIBC .... maybe instead of transfering TDDI account to BMO, I will transfer it to CIBC.... If CIBC DRIPs US stocks so close to spot rate and BMO doesn't allow to DRIP US stocks at all, I prefer CIBC...
Will try to negotiate with CIBC to cover transfer fees and get some free trades... 
My concern that I hold in TD some MF, include eSeries and TD GIC.... not sure if it can be an issue?


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## mrPPincer (Nov 21, 2011)

I'd expect that the eSeries would have to be sold before changing brokerages, but it couldn't hurt to check that out, maybe they could be transferred.
When I was choosing brokerages I seem to remember the Questade phone rep saying it was no problem but he could have been mistaken.


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## humble_pie (Jun 7, 2009)

we should not forget that scotia iTrade, as haroldCrump has been reporting, was first off the mark last july/13 in correcting the predatory behaviour of brokers with respect to FX fees charged on USD dividends in many registered accounts. As well as on USD dividends paid by canadian companies in both registered & non-registered accounts.

scotia's forward steps, & cibc's forward steps, are part & parcel of the general yeast that is fermenting in canadian brokerland these days, as investors here, there & everywhere catch on to the fact that, for many years now, brokers have quietly been stripping off significant FX fees on many USD dividends without ever even informing their clients.

TD has made a partial effort that, by comparison to scotia Itrade & to what we are hearing about CIBC from gibor, looks shabby indeed.

in rrsp, TD has patched its system so that it will pay "some" USD DRIP dividends - but not all - in rrsp with no FX fee.

however, it is still charging substantial FX fees on USD cash dividends in rrsp & also on USD dividends paid out by 20 canadian corporations in all accounts.

no explanation as to why the TD has chosen to be so niggardly, so cheapskate & so parsimonious. It certainly looks bad.


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## gibor365 (Apr 1, 2011)

humble_pie said:


> TD has made a partial effort that, by comparison to scotia Itrade & to what we are hearing about CIBC from gibor, looks shabby indeed.
> 
> in rrsp, TD has patched its system so that it will pay "some" USD DRIP dividends - but not all - in rrsp with no FX fee.
> 
> ...


Actually today I sent email to TDDI Business Development Manager whom I contacted several times in the past. I asked questions about FX on dividends and on direct buys (comparing with CIBC) and gave him some numbers, also asked about transfering out GIC and eSeries .... Will keep you informed what he answers


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## HaroldCrump (Jun 10, 2009)

Yup, I am consistently getting USD dividends in a CAD$ RRSP account at BOC noon rates as of the dividend Record date.
There was a clear shift in policy around June - July 2013.
Front line reps will never say so, just as they never admitted the problem in the first place (or were truly not aware of a problem to begin with).

Now based on what gibor is reporting, I will place a trade or two for USD stocks in my CAD RRSP account and observe the FX conversion rate.
I suspect there is still a FX spread at iTrade for real-time conversions, but I haven't tried this in the last few months.


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## humble_pie (Jun 7, 2009)

the TD reps are also tongue-tied, blancmanged & wooly-mouthed when it comes to discussing what is actually going on that produces the FX results we are seeing in our accounts.

my hypothesis is that the issue - especially in registered accounts - is hyper-sensitive. The brokers are the trustees of these accounts; they are bound by hundreds of years of jurisprudence that require them to act always in the best interests of their beneficiaries; this precludes their ever charging hidden or secret fees for themselves; alas this is the very situation - quite predatory, actually - that has been going on for many long years now.

ie the charging of hidden FX fees in a registered account by a trustee is likely to be the very kernel of a possible class-action lawsuit. So the brokers are tiptoeing around like pussycats, saying nothing, hoping nobody will notice while they turn themselves into Little Miss Sunshine ...


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## Xoron (Jun 22, 2010)

I don't have any USD purchases in my RRSP or TFSA where I didn't have an offsetting sale. 

I could do the calculations on the dividends I've received, but what date should I be looking at for the FX? Record date, or pay date (when it actually appeared in my account)? I have quite a few USD dividend payers in my RRSP.


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## gibor365 (Apr 1, 2011)

HaroldCrump said:


> Yup, I am consistently getting USD dividends in a CAD$ RRSP account at BOC noon rates as of the dividend Record date.
> There was a clear shift in policy around June - July 2013.


BOC rate as of the dividend Record date? I was checking BOC rate of Payment date....


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## humble_pie (Jun 7, 2009)

gibor said:


> Actually today I sent email to TDDI Business Development Manager whom I contacted several times in the past. I asked questions about FX on dividends and on direct buys (comparing with CIBC) and gave him some numbers, also asked about transfering out GIC and eSeries .... Will keep you informed what he answers



thankx gibor

very nice footwork that you've done re cibc! 

can ya'll see how valuable is the internet & - more importantly - a forum like this one where folks can pool their knowledge & try to protect their interests. It's the old story: one stick alone will bend & snap; but a thick bundle of sticks, bound together, cannot be broken.


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## HaroldCrump (Jun 10, 2009)

gibor said:


> BOC rate as of the dividend Record date? I was checking BOC rate of Payment date....


I found it to be the record date.
Check back against the record dates again, and see if it matches.


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## mrPPincer (Nov 21, 2011)

Actually humble, from gibor's posts, it seems CIBC was first off the mark, on or before Oct 2012, to correct their behavior, and not just in a half-baked way either.

Whereas Harold says Scotia stopped dinging US divs around June - July 2013, close to as much as a year later, just sayin..


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## gibor365 (Apr 1, 2011)

HaroldCrump said:


> There was a clear shift in policy around June - July 2013.
> Front line reps will never say so, just as they never admitted the problem in the first place (or were truly not aware of a problem to begin with).
> 
> Now based on what gibor is reporting, I will place a trade or two for USD stocks in my CAD RRSP account and observe the FX conversion rate.
> I suspect there is still a FX spread at iTrade for real-time conversions, but I haven't tried this in the last few months.


From my post 61 above you can see that CIBC started giving BoC rates on buys between Mar and Oct 2012.... (before it was higher , but still much better than TDW's ones)
It's interesting what FX rate you gonna get now in your discount brokerage...
The interesting point.....I was discussing FX rates issue with 2 different managers, no one told me me about prefered rates (even though I got other goodies from CIBC )... several times I discused same issue with front-line reps....again nothing... just ONE time one rep "by big secret" told me abour preferred rates for RRSP and...she was right. Questions, they don't know or don't want to tell?!


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## gibor365 (Apr 1, 2011)

Xoron said:


> I don't have any USD purchases in my RRSP or TFSA where I didn't have an offsetting sale.
> 
> .


I also did it before couple of times, but now I see that it doesn't really make sense for 1 time buy os US stock or for gambit, you pay more in commissions than earn


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## humble_pie (Jun 7, 2009)

re dividend Record date vs dividend Payment date:

the 20 canadian companies that pay their dividends in USD have some registered shareholders who have chosen to receive their divs in CAD (note: a "registered" shareholder here means a shareholder who holds a certificate in his or her own personal name; he receives his dividends directly from the company via the transfer agent. These days, registered shareholders are in the minority. The vast majority of shareholders these days are "street" or "nominee" shareholders whose shares are held in street form at brokers.)

... ok to resume: registered shareholders who have requested CAD dividends will receive a dividend amount converted, usually at BOC rates, as of the record date of the dividend.

... but the brokers use the payment date for the currency conversions that they make. When i dug around researching this issue, 2 different brokers at fairly high levels confirmed the payable date info to me.

but i was left thinking that - if i were a broker's trading desk - i would certainly seize the currency trading opportunity for the dividend amount during the period of time between the record date & the payable date.

because the exact size of the bulk dividend amount going to each broker is known as of the record date, right? even if the money doesn't arrive until the payable date, it's still possible for the currency trading mice to play in the meantime, right?

in general: i imagine that each broker has worked out their own FX system adaptation for dividends as best they can. Some may use record dates, some may use payable dates. At the end of the day the choice would not likely make much difference to retail investors.


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## gibor365 (Apr 1, 2011)

Just called CIBC and rep told me that he's almost sure that FX rate applies on Payment date.... still he promised to call back office and confirm on Wed for sure


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## humble_pie (Jun 7, 2009)

gibor said:


> Just called CIBC and rep told me that he's almost sure that FX rate applies on Payment date.... still he promised to call back office and confirm on Wed for sure


yes, like i mentioned, most brokers are using the payment date.

apparently scotia is using a slightly different setup, one that favours the record date. I'd imagine that they have jolly good system reasons for this.

at the end of the day it doesn't matter much to us retail shareholders. Where it would make a difference would be a big dividend bulk payment coming in to a broker - one where broker has a large number of clients who are shareholders - a potash, for example - so a broker's trading desk could fool around on the currency, with respect to the bulk dividend amount, during the period between the record date & the payable date ...


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## gibor365 (Apr 1, 2011)

I also checked today FX rates when I DRIP (buy) shares: CIBC gave me on Dec 2 for COP FX rate 0.942934572 , BoC noon rate0.9404, Nov 15 ABBV got in CIBC 0.955753262, BoC rate	0.9562
. So, in COP case I got rate even better than BoC spot rate 
Also calculated average FX rate I got in 2013 for US dividends in cash (17 dividends, got tired to calc more): I got rate 1.047370697, and BoC average noon rate for those 17 days (I took payment date) is 1.049723529. Very close.


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## Xoron (Jun 22, 2010)

gibor said:


> I also did it before couple of times, but now I see that it doesn't really make sense for 1 time buy os US stock or for gambit, you pay more in commissions than earn


I just meant that because I FX netted the trades, I got a preset FX rate from a trader over the phone. And that rate may not be representative of the noon spot rate.

In any case, I calculated my FX rates on my last 9 dividends (Dec1 - Jan 3), and here is what I get using the FX of the pay date (CAD -> USD):


Pay DateTickerFX Rate from CIBC on Pay DateBOC FX Rate of pay date (noon)Difference in FX rates
January 03, 2014

COH

1.06410

1.0614

-0.255%

December 27, 2013

HFC

1.06167

1.0697

0.751%

December 27, 2013

VWO

1.06145

1.0697

0.771%

December 16, 2013

HFC

1.05850

1.0577

-0.076%

December 12, 2013

MSFT

1.05774

1.0641

0.598%

December 12, 2013

PDLI

1.05739

1.0641

0.630%

December 02, 2013

DLX

1.06080

1.0634

0.244%

December 02, 2013

INTC

1.06056

1.0634

0.267%

December 02, 2013

KLAC

1.06032

1.0634

0.290%


So, couple of things to note:
1. When divs paid on the same day (3 on Dec 2nd for example) there isn't the same rate applied to each dividend payout by CIBC IE. 
2. The payout FX rate is sometimes better and sometimes worse on the BOC noon rate. 
3. Most of these pay dates are at least 1-2 weeks after the record date. COH had a record date of almost 1 month before the pay date, where VWO it was only 3 days between record and pay. 
4. And these were pure dividend payouts. No DRIP, synthetic or otherwise

Thoughts?


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## gibor365 (Apr 1, 2011)

Xoron said:


> Thoughts?


IMHO, it's pretty good, the higher Difference in FX rates that I paid (you have the same rate) = 0.78 , and on the same date TDDI had 2.27
The best rate I got -0.13% better than BoC spot rate.
I checked several rates of CIBC and TD, TD was always much higher in range 1.3-1.5%


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## humble_pie (Jun 7, 2009)

xoron i'm happy you joined gibor on the cibc watch, it's a situation where 2 pairs of eyes looking at slightly different information can more quickly assemble the 3-D picture imho.

re those 3 mildly different FX rates on 2 dec/13, i'd imagine this is because the cibc system is using a money centre bank feed & this rate changes every minute. So the exact rate would depend upon the moment at which an individual dividend is processed; however all rates for a particular day would normally be very close to BOC noon rate.

re FX fees on stock buy/sell transactions, i'm not clear on what happens in cibc registered accounts.

could we use an example in rrsp (let's stick to rrsp because rates for cash/margin accounts may be different): suppose client has only CAD cash in his rrsp account at cibc. He send an online order to buy 100 MSFT at 36.25. The system executes the order, taking sufficient funds from the CAD cash or cash-equivalent deposit & converting this to the required amount of USD at a particular rate.

what rate does the cibc system use? does it use the BOC rate for this capital conversion in rrsp? or does it - like every other broker - apply its house spread rate to the conversion, which at the moment would mean around 1.50% for a single transaction?

if the former - ie the cibc system is offering the spot or BOC rate for conversions of capital - then, as gibor says, there would be no need to go to the trouble of gambitting, the way one has to do at every other broker. Because the gambit trade - ie the arbitrage - would already be incorporated in the spot aka BOC rate that is being offered.

if all this would be true, then canadian investors with significant US holdings in their registered accounts should a) obtain confirmation from cibc that this policy is going to remain stable & is not the result of a temporary fluke; & b) run, do not walk, their rrsps over to the cibc en très grand nombre! 

i think it's necessary for us to do more research & for the cibc to confirm that this is going to remain its policy for some time, before breaking out the champagne though.

plus it should be remembered that such benefits in rrsp do not mean that cibc should be expected to offer the same terms in cash or margin accounts.

it appears that scotia iTrade may have moved in the same direction. HaroldCrump did you not say you are planning an experimental buy of a US security but paid for with canadian dollars in rrsp, just to observe how scotia would handle the FX? please let us know all the details when that happens ...

if these changes in rrsp are going to be permanent, they would mean another giant step forward for canadian investors. They would bring to 5 the number of brokers offering 100% non-toxic client-friendly zero-FX-fee registered accounts.

bite the dust, remaining brokers! into the dustbin, td, natbank, hsbc!


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## HaroldCrump (Jun 10, 2009)

humble_pie said:


> HaroldCrump did you not say you are planning an experimental buy of a US security but paid for with canadian dollars in rrsp, just to observe how scotia would handle the FX? please let us know all the details when that happens ...


I just tried this, no CIBC IE style luck yet with iTrade.
BOC noon rate is 1.0742, and iTrade is converting my USD trades at 1.0945.
That's a 1.88% spread.

Not as bad as the 3.5% spread they used to charge for dividends, but there is still a spread nevertheless.

I will keep monitoring this every couple of weeks or so.
It is possible that iTrade might catch up this June/July.


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## gibor365 (Apr 1, 2011)

Regarding buys in CIBC, last year 2013, I found only 5 buys I did directly (not using FX netting)
CIBC FX	noon	high low
Jun-04	1.036	1.0348	1.0362	1.0308
Mar-05	1.029	1.029	1.0294	1.0262
Mar-06	1.0325	1.0314	1.0337	1.027
Feb-01	0.998	0.9987	1.0006	0.9969
Feb-21	1.02	1.0185	1.0208	1.0176
Feb-11	1.006	1.0065	1.0084	1.0042

You can see that CIBC FX is extremely close to BoC and always in the range on High/Low for the same date.

Even more intersting numbers below. Twice in 2013 I sold US stock and bought on the same date. In both cases spread between buy and sell price is only 0.002 cents! I think it's perfect, isn't it HP?
Mar-01	1.029	1.0285	1.0343	1.0263	buy
Mar-01	1.027	1.0285	1.0343	1.0263	sell
Feb-01	0.998	0.9987	1.0006	0.9969	buy
Feb-01	0.996	0.9987	1.0006	0.9969	sell

I completely agre with you regarding "i think it's necessary for us to do more research & for the cibc to confirm that this is going to remain its policy for some time, before breaking out the champagne though." - but who gonna confirm?!

P.S. I was confirmed by rep that preferred FX rates are ONLY for registered accounts (my examples from RRSP and LIRA)


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## gibor365 (Apr 1, 2011)

Regarding Payment vs Record date..... Rep double checked in back office and confirmed that it goes by Record date (so his "pretty sure Payment date" was wrong  ).

The funny part here that yes, majority of FX rates are pretty much the same , but I found 1 exception and don't understand how it can be:
CVX Record date on Nov 18, CIBC gave me rate 1.06375, but BoC rates were Noon - 1.0427, High 1.0438, Low 1.0414 (if I go by Payment date - rates much closer).
Maybe some companies go by Payment and some by Record? How CIBC can give rate that is much much better than highest rate of BoC at the same date?


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## uptoolate (Oct 9, 2011)

Is there any way to retitle this thread or at least the part of it that doesn't really have much to do with TDW RRSP DRIPS. HP pointed this out as we veered into more general discussion re: Forex rates at the various discount brokerages. I think there would be more participants if the title were different.


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## humble_pie (Jun 7, 2009)

i think the topic is ok as is though ... we could always establish a new thread later & link back to this one ... 

these are all related issues so the general question of brokers' FX fees seems to be always coming up in one form or another, in one thread or another.

(to gibor) great stuff! it had never occurred to me that cibc would burst onto the scene like an opera diva singing her heart out at la Scala, with a full-blown FX-free rrsp! i actually can hardly believe it!

it was so kind of you to share all your research. May i mention gibor that the good act you did for others will continue to reverberate for years to come. Because readers will see here how several different kinds of zero-FX-fee RRSPs are possible, so they will continue to put pressure on the holdout brokers.

after that, it will only be a matter of time, i imagine. The holdout brokers will gradually have to bow to the competition & offer a similar platform.


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## gibor365 (Apr 1, 2011)

humble_pie said:


> (to gibor) great stuff! it had never occurred to me that cibc would burst onto the scene like an opera diva singing her heart out at la Scala, with a full-blown FX-free rrsp! i actually can hardly believe it!
> 
> .


HP, to tell you the truth, I hardly believed it by myself, until I started to do calculations  this is why I dig a lot into my statement to find more proof and was asking if other CIBC client can confirm my findings.....
and another concern, how stable is current FX rate approach. 
I sent email to CIBC Customer Satisfaction Department rep with whom I communicated earlier.... will update when he replies.
I'm thinking to move my TDDI account to CIBC, as looking on those "closed to perfect" FX rates and the lowest commissions among big banks, I don't even feel that I need to "gambit" and even have USD RRSP account


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## Xoron (Jun 22, 2010)

And here are the last few months of div payouts in my TFSA. It looks like the good rates apply to CIBC IE TFSA accounts as well as RRSP.



Pay DateTickerFX Rate from CIBC on Pay DateBOC FX Rate of pay date (noon)
December 18, 2013

VLO

1.0596

1.0645

October 30, 2013

LDOS

1.0458

1.0456

October 30, 2013

SAIC

1.0462

1.0456

October 15, 2013

CST

1.0286

1.0371

September 11, 2013

VLO

1.0347

1.0337

June 19, 2013

VLO

1.0200

1.0187


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## humble_pie (Jun 7, 2009)

hey xoron it's great to have your input. I appreciate so much that both you & gibor are working strictly from firsthand evidence, not from remarks that one front-line representative or another might say.

may we know whether CIBC is printing the conversion rate for each dividend upon the statements? if so, this would also be a huge step forward, entirely for the clients' benefit (btw same question to haroldCrump re scotia).

getting FX rates for *all* dividends printed upon *all* statements - cash, margin & registered - has been a hope & goal of mine for such a long time.


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## Xoron (Jun 22, 2010)

humble_pie said:


> may we know whether CIBC is printing the conversion rate for each dividend upon the statements? if so, this would also be a huge step forward, entirely for the clients' benefit (btw same question to haroldCrump re scotia).


For buys and sells it *DOES *list the FX rate on the statement
For Dividends it *DOES NOT* list the FX rate on the statement

My FX rates for dividends that I listed were calculated by me based on my # of shares and payout/share. Then I used the difference in the CAD cash into my RRSP/TFSA vs the USD value of the dividends.


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## HaroldCrump (Jun 10, 2009)

humble_pie said:


> may we know whether CIBC is printing the conversion rate for each dividend upon the statements? if so, this would also be a huge step forward, entirely for the clients' benefit (btw same question to haroldCrump re scotia).
> getting FX rates for *all* dividends printed upon *all* statements - cash, margin & registered - has been a hope & goal of mine for such a long time.


Scotia iTrade statements show FX conversion rate in the case of buy/sell, but not in the case of USD dividends.
Dividends are shown as an absolute number, but not even a hint that there has been an FX conversion.

They are now using BOC rates just as silently as they were siphoning off 3.5% earlier.


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## humble_pie (Jun 7, 2009)

Xoron said:


> For buys and sells it *DOES *list the FX rate on the statement
> For Dividends it *DOES NOT* list the FX rate on the statement


thankx for info

my hope has always been that if the brokers would place FX rates for dividends on statements, then clients would at least have the opportunity to ask the broker what the charges mean ...

with respect to the 20-canadians-that-pay-USD-dividends, still the majority of canadian investors don't know what's happening. They go to a canadian broker, buy shares in a canadian company, pay in canadian dollars, stock goes into a canadian account, dividend arrives, they think _That's It_.

until the broker would indicate the FX rate, there's nothing to suggest to them that they are silently, invisibly paying the broker 1.50% of every dividend.

i did recently find one licensed rep - he's a 5-star rep at BMO - who says he's taken it upon himself, whenever there is an opportunity, to explain to some BMO clients that they can avoid FX fees in cash or margin accounts on the 20-canadians-etc by holding such shares in a USD account.

i knew he was telling me the Real Deal when he laughed & said Sometimes it's so Difficult to Get Them to Understand.


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## gibor365 (Apr 1, 2011)

Xoron said:


> For buys and sells it *DOES *list the FX rate on the statement
> For Dividends it *DOES NOT* list the FX rate on the statement
> 
> .


Confirming the same  Also what I like on CIBC GUI platform, you don't need to go to statement to see FX rates or prices, you can filter (and they have a lot of filters) all your data 13 months back. I hate TDDI in this respect, as I can see my activity for 1 or 2 months maximum and no any filters.
The only drawback in CIBC...their system cannot recognize that you hold MM or ATL5000 and in order to place trade you should first submit sell order on MM or ATL5000.


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## gibor365 (Apr 1, 2011)

Reply from CIBC "Yes, we do offer preferred FX rates for registered accounts. The spread for registered accounts is considerably lower than the rate for our non-registered accounts."


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