# Direct Registration of Equities



## Mike59 (May 22, 2010)

Perhaps my paranoid anti-big-bank thoughts are getting the best of me, but does anyone happen to own their stock certificates or ETFs directly, either in certificate form or "direct registration"? 

What are the costs to register directly with the issuing body through a brokerage (like RBC direct or TD waterhouse) , and does this exist for ETFs? 

Thanks for any replies!


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## Cal (Jun 17, 2009)

Yes. If you currently hold the equities with a bank, I think the going rate is $50 to obtain a share certificate. No cost to register with the transfer agent.

More info can be found at www.dripinvesting.org and www.dripprimer.ca

Although if your main concern over this is that a Canadian bank may become inslovent, then you are probably being paranoid. There are a few threads on dripinvesting.org regarding pros and cons of directly holding the shares. Canèt remember but there might just be on this site too.


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## Eclectic12 (Oct 20, 2010)

Mike59 said:


> Perhaps my paranoid anti-big-bank thoughts are getting the best of me, but does anyone happen to own their stock certificates or ETFs directly, either in certificate form or "direct registration"?
> 
> What are the costs to register directly with the issuing body through a brokerage (like RBC direct or TD waterhouse) , and does this exist for ETFs?
> 
> Thanks for any replies!


No - I don't have any shares directly in my name.

Cal is right that average costs to have the broker register the shares in your name is about $50. However, check with the financial institution involved as I did notice RBC charges $50 for "regular" time frame requests but a "rush" (i.e. 3 to 5 business days) is $200.

Since the share certificates are mailed to you, I believe responsibility for safe keeping becomes your job. My understanding is that the share certificate is similar to cash or a cheque. If someone steals it from your house and re-registers it as theirs, it may be a mess to clear up. I'm not sure how long before you'd find out or what the process to prove you had not sold them. 

I'm hoping that with computers etc., the process has been changed so that there is some sort of proof of a sale is required but I don't know. Maybe someone who has transferred shares can give a better idea.


Then too - if you have ten stocks, do you really want to be reconciling ten different report formats to confirm accuracy and then consolidate this in order to have a portfolio view?



Cheers


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## Toronto.gal (Jan 8, 2010)

Eclectic12 said:


> If someone steals it from your house and re-registers it as theirs, it may be a mess to clear up.


Lol, I framed my certificates, so I better find a hiding spot under the bed now. :biggrin:

I paid $50 [that's the only cost], and I think most brokers charge that, except for Questrade, who charges a monstrous $300 [rush = $450]. :rolleyes2:

The key disadvantage is not being able to buy/sell shares in real time.

I hardly ever sign-on to the Transfer Agents' website, so not sure what other benefits there may be [with respect to security of ownership].


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## indexxx (Oct 31, 2011)

I have two securities in my name thus far, and will likely go that route on a few more- I do it for the ability to DRiP partial shares and to save 5% on additional purchases.


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## Eclectic12 (Oct 20, 2010)

indexxx said:


> I have two securities in my name thus far, and will likely go that route on a few more- I do it for the ability to DRiP partial shares and to save 5% on additional purchases.


A few questions to satisfy my curiosity, if you don't mind.

Did you end up with actual certificates that you had to send copies to the DRIP company?

Were the costs similar to what has been posted?

If the two shares are administered by the same transfer agent, do you get a consolidated report?


Cheers


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## Toronto.gal (Jan 8, 2010)

Eclectic12 said:


> 1. Did you end up with actual certificates that you had to send copies to the DRIP company?
> 2. If the two shares are administered by the same transfer agent, do you get a consolidated report?


1. I did this over 2 years ago, so I don't recall every detail, but no, I did not send them copies of any certificates. What I remember is that I received a package with some forms to fill out & those were mailed to the TA [you just give them the certificate numbers].

2. You get a quarterly statement for each company.


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## Toronto.gal (Jan 8, 2010)

Edit: I think I gave 2 much info. Anyway, the certificate = your account#.


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## Cal (Jun 17, 2009)

Yes, I can verify the info above.

The certificate has a number on it that is unique to your share registration. You can fill it out on the forms and mail it in to the transfer agent.

Funny T.gal, yes some of teh share cert's are rather nice looking and I have previously wondered about framing them too. I have the understanding that replacing a lost cert. can take about 2 weeks and cost $500, so don't lose one.

I have never registered online for any of mine. I have too many passwords to remember already.

If you have 2 cert's w 2 companies, but the same tranfer agent, you will receive 2 quarterly reports, one for each company. If you have 2 share cert's w one company, (perhaps b/c of a stock split), you will receive 1 report.

All of this information and more is easily obtained through the links I posted above. They are a great source of information.


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## sharbit (Apr 26, 2012)

Arn't the shares titled to you so it wouldn't matter if the bank goes under? This wouldn't even use your CDIC allocation.


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## Toronto.gal (Jan 8, 2010)

Cal said:


> 1. Funny T.gal, yes some of teh share cert's are rather nice looking and I have previously wondered about framing them too.
> 2. I have the understanding that replacing a lost cert. can take about 2 weeks and cost $500, so don't lose one.
> 3. I have never registered online for any of mine. I have too many passwords to remember already.


1. Yes, they all are very nice, hence the reason I decorated my study area with them! [see, I'm good at interior decorating as well]. ride:
http://www.google.ca/search?tbm=isc...10.0.8.8.0.112.835.8j2.10.0...0.0.H7jOq61Q4Ig

2. I was not aware of that! :rolleyes2:

However, I have no plans of losing them, especially since I have double the certificates for shares that split [you receive a 2nd certificate when that happens in case you're not aware]. I will call my TA's to confirm cost of replacement just to be sure. At any rate, I have no plans of misplacing them from my walls, but I'll be careful if I move & I'll watch my guests closely too. :biggrin:

3. You can have a different password for every site, but there is an easy way to never forget [can't disclose my method].


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## Beaver101 (Nov 14, 2011)

Toronto.gal said:


> 1. Yes, they all are very nice, hence the reason I decorated my study area with them! [see, I'm good at interior decorating as well]. ride:
> 
> However, I have no plans of losing them, especially since I have double the certificates for shares that split [you receive a 2nd certificate when that happens in case you're not aware]. I will call my TA's to confirm cost of replacement just to be sure. At any rate, I have no plans of misplacing them from my walls, but I'll be careful if I move & I'll watch my guests closely too. :biggrin:
> 
> ....


 ... then what are banks' vaults aka safety deposit boxes for? :biggrin:


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## CanadianCapitalist (Mar 31, 2009)

sharbit said:


> Arn't the shares titled to you so it wouldn't matter if the bank goes under? This wouldn't even use your CDIC allocation.


The answer is no. Most of us hold securities in street name, which means it is not registered in our names. Typically, this is not an issue because if you just have an investment account, your holdings are separate from the broker's. But assume that this firewall is breached due to malfeasance and there is a shortfall in the books. i.e. all clients cannot be made whole. Then the assets that do remain is divided pro-rata among clients who held securities in the street name.

http://www.canadiancapitalist.com/what-happens-when-a-broker-goes-bankrupt/


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## Toronto.gal (Jan 8, 2010)

Beaver101 said:


> ... then what are banks' vaults aka safety deposit boxes for? :biggrin:


For diamonds. :biggrin:

The certificates are not that small.

With respect to the replacement cost, no, it's not $500, it depends on the # of shares you own.

I called Computershare today, and I learned the following:

- if you own less than 5 shares, there is no cost to replace the certificate;
- if you own more than 5, the cost is 3% of share value & a $25 minimum fee;
- to avoid any charges & replacements, you can return the certificate and in lieu, you would receive a DRS statement [at no cost], which would register your shares on their online *Direct Registration System.*

http://corporate.computershare.com/CANADA/OURBUSINESS/CIS/OC/Pages/DirectRegistration(DRS).aspx

So, if I understood right, the shares I subsequently purchased [via the OCP & DRIP plans], are on the DRS system already, but not the ones that I transferred out from my broker [will have to confirm this to be sure]. 

The other key TA is CTS:

https://www.canstockta.com/requestReplacementCe.do

They said to me that the DRS does not apply to all companies [though the agent did not sound all that confident, so I'll have to confirm this as well]. :rolleyes2:


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## Cal (Jun 17, 2009)

I found this link regarding replacing a lost certificate, looks like it is free if you have less than 5 shares, as t.gal mentioned, after that cost depends on how many shares you hold:

http://www.dripinvesting.org/Boards/Read.asp?MID=107436


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## Andre112 (Apr 27, 2011)

Toronto.gal said:


> 3. You can have a different password for every site, but there is an easy way to never forget [can't disclose my method].


Write them on a piece of paper and put in on the wall next to your certificates? lol


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## Kail (Feb 7, 2012)

Toronto.gal said:


> For diamonds. :biggrin:
> 
> The certificates are not that small.
> 
> ...


It all depends on the current market value of the securities as well as the TA. Some TAs charge 3% of the value of the securities or $50, whichever is greater plus a $100 replacement processing fee. I've seen people lose certificates worth upwards of $100,000. It's amazing how hard they look for it when they are told it will cost over $3,000 to replace their misplaced certificate.

I belive Computershare is the only TA in Canada that offers DRS for all of it's clients. There is a cost for Companies to offer DRS to their shareholders, but there is no cost to the shareholders to use it. It's a good alternative to receiving physical certificates in that you will never lose your shares in a move or anything like that, though you'll still have to go the usual route in filling out forms and having your signature guaranteed in order to transfer your shares.


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## Toronto.gal (Jan 8, 2010)

*Andre:* I think I have more brains than that. 

And I meant with any account, be it CMF, CST, etc.

I'll give you a hint: it requires no pen, paper, or even a ruler; in fact, all you need is brilliance. :rolleyes2:

Anyway, I hope you found this thread informative.


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## Toronto.gal (Jan 8, 2010)

Kail said:


> It all depends on the current market value of the securities as well as the TA. Some TAs charge 3% of the value of the securities or $50, whichever is greater plus a $100 replacement processing fee. I've seen people lose certificates worth upwards of $100,000. It's amazing how hard they look for it when they are told it will cost over $3,000 to replace their misplaced certificate.
> 
> I belive Computershare is the only TA in Canada that offers DRS for all of it's clients. There is a cost for Companies to offer DRS to their shareholders, but there is no cost to the shareholders to use it. It's a good alternative to receiving physical certificates in that you will never lose your shares in a move or anything like that, though you'll still have to go the usual route in filling out forms and having your signature guaranteed in order to transfer your shares.


That's weird, when I responded to Andre, I did not see your post [maybe because it's your 1st and was being moderated].

Indeed everyone has different rules and that is why I like to always call & quote direct sources as done above.

Welcome to the forum *Kail.*


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## sharbit (Apr 26, 2012)

CanadianCapitalist said:


> Most of us hold securities in street name, which means it is not registered in our names. Typically, this is not an issue because if you just have an investment account, your holdings are separate from the broker's. But assume that this firewall is breached due to malfeasance and there is a shortfall in the books. i.e. all clients cannot be made whole. Then the assets that do remain is divided pro-rata among clients who held securities in the street name.


Interesting. Thanks!


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## humble_pie (Jun 7, 2009)

CC i'm at a bit of a loss here.

first, recent messages in this thread are dealing with shares that are registered in a shareholder's name, as opposed to shares held in what is called street or bearer form at a broker.

but here is your post about shares held in street, and i do question it.



CanadianCapitalist said:


> ... Most of us hold securities in street name, which means it is not registered in our names. Typically, this is not an issue because if you just have an investment account, your holdings are separate from the broker's.


securities held in street at a broker are not, to the best of my knowledge, separate from such brokers' reach. In fact, the opposite is true. Ours are the very holdings that the brokers borrow in order to lend the same to other clients who wish to short particular stocks.

later, at some point in time, the broker will quietly return our borrowed shares to us.

the word "seg" on clients' statements does not mean these securities are being kept apart for the benefit of the owner. In fact i believe it means the opposite. It means that shares marked "seg" are available to be loaned out for shorting purposes.

there are almost no markings on an investor's account that can tell him whether his shares are being used for short borrowing. Like the foreign exchange markups, these are silent, well-hidden profit-making strategies which a broker would prefer the client not know about.

nevertheless, borrowing clients' stock has been going on, at all brokers, for close to a century. It's a lucrative business for both discount & full-service brokers. They borrow at no cost to themselves & then they lend out, usually at margin rates.

from which accounts do brokers borrow shares ?

from registered accounts, never.
from non-registered accounts, usually in this order: 1st) from margin accounts running debits; 2nd) from paid-up margin accounts, ie no debits; & 3rd) from paid-up cash accounts.
on a practical basis, most brokers do not borrow stock from paid-up cash accounts. However, i believe they have the right to do so.

there are ways to prevent the borrowing of shares. All of them require some effort by the investor.


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## Toronto.gal (Jan 8, 2010)

humble_pie said:


> there are ways to prevent the borrowing of shares. All of them require some effort by the investor.


Interesting & informative post, thank you!

I knew that brokers do borrow shares [without asking for permission, lol], but could you expand on the above mentioned? I'm willing to make the effort.


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## Eclectic12 (Oct 20, 2010)

Toronto.gal said:


> Interesting & informative post, thank you!
> 
> I knew that brokers do borrow shares [without asking for permission, lol], but could you expand on the above mentioned? I'm willing to make the effort.


Hmmm ... I suspect the "asking" part is buried in the account agreement, which is long, rarely read and even less often understood. 

Personally, I seem to recall getting a letter a long time ago that outlined the borrowing of shares. It was buried in language that most would not understand, if they took the time to read it through completely. I'm sure most people skipped reading it.


Cheers


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## Toronto.gal (Jan 8, 2010)

Yes Eclectic, you're right, of course they would cover themselves, I was just being a bit sarcastic that most people are not even aware of such a practice.


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## humble_pie (Jun 7, 2009)

toronto.gal i'm sure eclectic is right (he usually is); we all did sign broker agreements in which the broker's right to borrow stock was probably set forth in the densest legalese possible.

before i mention how-to-save-your-stocks, may i say that i for one stick with well-run big bank brokers for the reason that i've often mentioned.

namely, in a global financial collapse, which we barely averted in 2008/09, there would be no money whatsoever in CIPF to protect any investor. Many brokers would fail. Even mr. Belguy could lose his life savings.

so i stick with strong bank-owned brokers on the grounds that we know nothing about the financial substructure of the small privately-owned online brokers. All we know is that they meet the minimum requirements of the exchanges. We don't even know who their banker(s) are, because being privately owned they publish nothing.

may i add also that i have no inclination to register my stocks or otherwise try to put up a stockade between my life savings & on-again-off-again predations from the broker. I have enough faith in the broker each: - it's a strong bank - that i do have confidence their compliance department is following draconian & puritanical borrowing protocols.

however, here are some ways to avoid broker borrowings:

1) investors can obtain their share holdings in physical certificate form, or they can register directly as owners with the CDS system as you have shown us (note: acronym stands for Central Depository System & it is, i believe, jointly owned by the brokers);

2) investors can enter Sell orders with prices that are wildly above the market, ie in a disrupted collapsing market such securities will probably not be sold. The sell order should lock down the security against borrowing. However, it's my belief that most online broker platforms are designed to reject trading orders that are wildly out of the money;

3) if the security has options, investors can enter wildly out-of-the-money Sell option orders that will also, theoretically speaking, lock down the underlying security.

however, my direct experience has been that occasionally - it's rare, but perhaps once or twice a decade i have seen it happen - the broker will borrow stocks against which i have already sold short call options. Tch, tch. This means that the same stock gets shorted twice, first by the client/investor who has sold the option on the grounds that the option position is covered by the stock he holds long, and a second time by the broker who borrows said stock for another client who wishes to short ...

the few times i have seen this happen, it was always for a small number of shares & they were always restored to the account within 2 or 3 weeks ... 

lastly, may i add that the ancient & widespread broker practice of borrowing stock to lend out on margin does have substantial benefits for all us investors. All the custodial costs of holding all the securities, including failproof deliveries of stock upon settlement dates & failproof delivery of all the dividends rightfully belonging to each & every individual investor - all these benefits accrue to us at zero cost. We don't pay for custody, because the broker is paying for it out of the profits they make from borrowing our stock.

it's the old jingle, the foot-bone's-connected-to-the-ankle-bone-&-the-ankle-bone's-connected-to-the-shin-bone ...


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## Sampson (Apr 3, 2009)

Thanks for the informative posts Pie.


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## Andre112 (Apr 27, 2011)

Toronto.gal said:


> I'll give you a hint: it requires no pen, paper, or even a ruler; in fact, all you need is brilliance. :rolleyes2:


I'm sure you have more brains.
Brilliance is what I lack of. 

I guess you could have one set of password and just adding name of the website into the password.


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## Toronto.gal (Jan 8, 2010)

humble_pie said:


> it's the old jingle, the foot-bone's-connected-to-the-ankle-bone-&-the-ankle-bone's-connected-to-the-shin-bone ...


Indeed!

Thank you for all the information HP; lots to think about [as usual]. 

*Andre:* close but no cigar! No brilliance needed, just common-sense! [there are 3 parts in my formula]. :biggrin:


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## CanadianCapitalist (Mar 31, 2009)

humble_pie said:


> CC i'm at a bit of a loss here.
> 
> securities held in street at a broker are not, to the best of my knowledge, separate from such brokers' reach. In fact, the opposite is true. Ours are the very holdings that the brokers borrow in order to lend the same to other clients who wish to short particular stocks.


Sorry for taking the discussion off-topic. Fully paid-up securities are out of the broker's reach (Of course, "out of reach" doesn't mean client assets cannot be illegally accessed as in the MF Global case). Seg in client statements means just that: the securities are segregated and cannot be used by the broker. Of course, this does not apply to securities held as collateral for margin loans.

The CIPF website has a couple of pages explaining segregation and how losses are allocated when a broker becomes insolvent.

http://www.cipf.ca/Public/FAQ/Coverage/Segregation.aspx

http://www.cipf.ca/Public/CIPFCover...ng1Million/AllocationofLossestoCustomers.aspx


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## humble_pie (Jun 7, 2009)

no, fully paid-up securities are not out of a broker's reach.

all my accounts are always fully paid-up. I never borrow on margin.

i've repeatedly had stocks borrowed away by the broker.

what's even more surprising is that i've occasionally had stocks that are already short due to a short option position placed against them being borrowed by a broker. As i've mentioned upthread. Tch.

these instances are rare but they do happen. Typically the broker will borrow only a small portion of a holding. Typically it's returned within 2-3 weeks. I only get to find out via a printed statement. The borrowing doesn't show up online.


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