Money Tips | Financial Crooks

Setting up a US dollar sub-account within my InvestorLine RRSP account was easy. I just had to pick up the phone and speak to an InvestorLine rep. The trickier part was deciding what to hold in the US ledger and how to get it there. As a first step, I decided to test transferring some shares of a stock from the Canadian dollar side of my account to the US dollar side.

Here’s what happened.

Picking a Stock to Move from CAD to USD in my Account

I had some TD shares in my regular InvestorLine account. I had bought them on the TSX using Canadian dollars. They pay me my dividends in Canadian dollars. Since I bought some of them during the recent fire sale, they display a tidy little capital gain in the gains and losses column.

TD is also listed on the stock exchange in New York. If Americans buy it from that exchange, they pay US dollars for their shares. They are paid the quarterly dividend in US dollars. If they sell their holding, they are paid in US dollars.

A stock that is held on two (or more) exchanges like this is sometimes called inter-listed.

But you don’t have to be an American to buy TD shares on the NYSE or to sell them on it. Your self-directed brokerage may let you hold stocks in a US dollar ledger and lets you keep your profits in a US dollar cash account or money market fund. BMO InvestorLine allows this.

So I decided to move some shares of TD from the Canadian side of my account to the US side and watch what happened.

How to Transfer Shares from the Canadian to the US Journal for an InvestorLine Account

At this time (July 2013) to move shares from the Canadian dollar journal for my InvestorLine RRSP to the US dollar journal, I have to phone InvestorLine.

Call InvestorLine at 1 888 776 6886.
Provide your InvestorLine account number and your access password.
Ask the agent to transfer the correct number of shares from your Canadian dollar account to your US dollar account.

Can I Transfer Just Some of My Shares to the US Side of my InvestorLine Account?

Being someone who likes testing things, I requested to transfer only 100 of my TD shares to my US dollar ledger. InvestorLine was quite agreeable and had no problem leaving the rest of the shares in my Canadian dollar ledger.

The agent did warn me, though, that for a day or two I will see the shares listed twice. He cautioned me not to over-estimate my holdings while waiting for the record keeping to straighten out. I assured him I wouldn’t sell shares I don’t have.

Can I Request a Transfer at the Same Time as I Create a US Side to my Account?

Even though I contacted InvestorLine using a toll-free number, and even though there was no wait time (!) to speak to an agent, I still combined my requests into a single call.

So yes, you can request the creation of a US side to your account during the same phone call as you request a transfer of some shares from the Canadian side of your account to the yet-to-be-created US side. How efficient!

What Happened the Business Day After I Requested the Transfer to my New US Dollar Sub-Account

So I made the request to create a US side for my account yesterday, on Thursday.

Today, on Friday, I logged in to my InvestorLine RRSP account to see what had changed. Here’s what I found:

Request made July 11 2013 to transfer 100 shares of TD when I called to create the US ledger.

On the morning of July 12 2013, as warned, I can see two line items in
my Transaction History:

Transaction Date: July 11, 2013
Settlement Date: July 11, 2013
Activity Description: Transfer out
Description: Toronto-Dominion Bank
Symbol: TD
Quantity: -100
Price: blank
Total Amount: 0.00 C

Followed by another line item
Transaction Date: July 11, 2013
Settlement Date: July 11, 2013
Activity Description: Transfer out
Description: Toronto-Dominion Bank
Symbol: TD
Quantity: 100
Price: blank
Total Amount: 0.00 U

NOTE: They BOTH say transfer OUT.

When I look at My Portfolio > Holdings
In the Cash balances section, there is a new line
Description / symbol: U.S. $ Cash
Quantity: 0.00
Average cost: blank
Current price: 1.0380 C
Market value: blank
Unrealized gain/loss: blank
Unrealized gain/loss %: blank
Portfolio %: 0.00%
Details: blank
Action: blank

Not surprisingly, the Cash equivalents and Fixed income sections are the same as always.

In the Equities section, there is a change.
I had requested they transfer only 100 shares of my TD holdings from the Canadian side to the US side of the account.

So this morning there are two lines for TD:

Description / symbol: Toronto-Dominion Bank – TD
Quantity: (original balance less 100 shares)
Average cost: same average cost as all week
Current price: 84.88 (yay! I bought during the dip!)
Market value: an enormous sum
Unrealized gain/loss: another enormous green amount
Unrealized gain/loss %: +4.36% (this is a blended average from multiple buys and sells)
Portfolio %: ***%
Details: two clickable icons
Action: the list is asking me to Select a chosen task if desired.

And the second line

Description / symbol: Toronto-Dominion Bank – TD
Quantity: 100
Average cost: same average cost as all week
Current price: 84.88
Market value: 8,488.00
Unrealized gain/loss: +354.36
Unrealized gain/loss %: +4.36%
Portfolio %: ***%
Details: two clickable icons
Action: the list is asking me to Select a chosen task if desired.

At this point, it looks like I still own 180 shares of TD in the Canadian side of my ledger.
That’s what they warned me when I requested the transfer after phoning in. Apparently on Saturday or Monday (he said “the next day”) I should see the Canadian TD shares vanish and the American TD shares appear.

Stay Tuned!

I’ll update this when the shares appear on the US side and describe how they are displayed and/or where.

Related Reading

How to Set Up a US Dollar Ledger or Side for a BMO InvestorLine RRSP Account

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Do you find it tricky to remember you no longer own certain shares in your Canadian trading account because they’ve been journaled to the US side but they are still misleadingly displayed as Canadian? Have you ever sold shares you don’t have? Please share your experiences with a comment.

A bit over a month ago, May 28 2013 to be exact, I put in an order to buy some Cineplex shares for our Investor’s Edge account. I thought that I had made the purchase the day before the stock went ex-dividend. The sale settled on May 31 as expected. Then I started waiting for the end of June and the first monthly dividend payment. I wondered exactly when I would see my dividend payment appear in my CIBC brokerage account.

Why Test Using Cineplex?

Cineplex was a good stock for this test because it pays a dividend each month to shareholders on record on a date near the end of the previous month. There are quite a few companies that pay dividends monthly which can make a useful income stream for investors as I described in Using Dividend Paying Stocks to Create Monthly Income.

The fact that Cineplex has gone up over $2 a share since we bought was an unplanned but not unexpected bonus. Monsters U and Despicable Me, too, anyone?!

When was Cineplex Due to Pay?

According to their press release, Cineplex said it would pay “$0.12 per share for the month of May 2013, payable on June 28, 2013, to shareholders of record on May 31, 2013.”

So in theory since our shares settled on May 31, we should have received a dividend payment on June 28, 2013.

With BMO InvestorLine the actual dividend payment usually lands in my cash account one day after it was payable. It shows up in the transaction history back dated to the previous day, as I described in What is in the Transaction History for a BMO InvestorLine Account and What Should I Watch Out for?

Did the Payment Appear in my Transaction History on June 28? 29? 30? Canada Day?

No.

I wasn’t surprised that the dividend payment did not appear in my CIBC brokerage account or in the Investor’s Edge transaction history on Friday June 28.

I wasn’t even particularly surprised that it didn’t show up on Saturday or Sunday. And then Monday was Canada Day.

(Dividend transactions do appear in our InvestorLine accounts on the weekend, though, back dated to the proper date.)

I gave it one last check very early Tuesday July 2. Still nothing.

That’s when I decided I must have somehow missed the Date of Record. Maybe a settlement date of May 31 did not equal a Record Date of May 31. Although I had thought it did.

When Did I Receive the Dividend?

Fast forward to Monday July 8. Refreshed after a few days in northern south eastern Ontario paddling among the muskrats and loons, I sat back down in front of a computer. Logging in to our CIBC account, I was surprised to find we DID receive the payment for the May Cineplex dividend.

How Does the Dividend Show Up in the CIBC Investor’s Edge Transaction History?

The transaction history reports:

In the Date column
- T July 2: I believe that means transaction date, based on other items.
- S July 2: Settlement date. Ditto.
In the Curr column
CAD
In the Type column
Dividend
In the Description column
Cash div on 100 shares rec 05/31/13 pay 06/30/13
In the Symbol column
CGX:CDN
In the Quantity column
nothing was reported
In the Price column
nothing was reported
In the Amount column
$12.00

I found the dates a bit confusing.

Rec does not mean Received. It means Date of Record, May 31, 2013.
Pay, though, is not listed as Friday June 28 per the press release, but as Sunday June 30. I’m not sure why it says that.
July 2 is apparently when the money was put into our cash account. I didn’t see it there first thing on the 2, but it may have appeared later that day or before the start of trading on July 3.

Possibly the June 30 date was used simply because it is the last day of the month. The Cineplex dividend is usually payable the last day of the month if that day is a business day. If not, they usually move it up to the last business day.

A Probable Explanation for the Delay in Dividend Payment

I suspect the cause of the delayed dividend payment was confusion. This was the first dividend earned by this stock since we purchased it. I expect that second and subsequent dividend payments will be credited much more quickly to our account.

Testing, Testing 1, 2, 3

I guess I’ll have to keep an eye on the account and see what happens this month.

According to the Cineplex Press Release, the June dividend payable to owners on record on June 28, 2013 is payable on July 31, 2013. Since the 31 is a Wednesday, the dividend could appear on the 31, or on August 1 or later.