Tag Archives: dividends

What to Watch for When Transferring a Stock to the US Dollar Side of an InvestorLine Account

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First I set up a US dollar ledger or journal for my InvestorLine RRSP account. Then I transferred some shares of TD that I already owned from the Canadian dollar side of the account to the US dollar side. I forgot to watch out for one detail before I did this transfer though.

Receiving Dividend Payments in US Dollars within a BMO InvestorLine RRSP US Dollar Sub Account

I asked a BMO InvestorLine agent to move 100 TD shares from my Canadian dollar RRSP account to my US dollar sub-account. They journaled the shares over, as requested, on July 11.

I felt rather smug about that because they pay a dividend on July 31 and I wanted to see how that would work. For instance, what exchange rate and fee would I have to pay to receive the dividend in US dollars?

Watch Your Dividend Dates Before Requesting a CAD to USD Transfer

Unfortunately, I forgot the dividend PAYMENT date is not the important one. It’s the dividend RECORD date I should have tried to beat.

TD declared the July 31 dividend to be payable to shareholders on record on July 9. On July 9, I still held the shares in the Canadian dollar side of my account.

What Happens to a Dividend Payment In This Situation?

I don’t actually know how this will play out. I guess on July 31 I will find out. Actually it will be August 1, as InvestorLine does not pay dividends till one day later, then backdates the transaction. So I will report my findings in August.

I still have TD shares in my Canadian dollar account. I also now have TD shares in my US dollar account. The dividend could

  • Be paid for all of the TD shares in CAD to the cash account in the Canadian ledger; or
  • Be paid for the Canadian-held TD shares in CAD to the cash account in the Canadian ledger, and be paid for the US-held TD shares in CAD to the cash account in the US ledger but be converted to USD after applying an exchange rate and a foreign currency exchange fee.

I already had been puzzled about exactly what they would do for the dividend payable on the shares held in the US ledger:

  • would they pay the dividend in CAD and only apply the exchange rate; or
  • would they pay the dividend in CAD and apply both the exchange rate and a foreign currency exchange fee; or
  • would they pay the dividend is USD at an exchange rate set by TD.

That puzzle will not be solved until Hallowe’en!

Why Transfer TD Anyway?

Some of you may be wondering why I moved TD in the first place. It’s just that I bought it during the recent dip and I’ll be selling it soon to crystallize the capital gain. Then I’ll want to re-invest the money, preferably in a US stock. This was an easy way to move the value to the US side to have it ready to sell when I find something I want to buy.

The Moral of the Story

Be smarter than me. (I know that’s not much of a challenge!)

If you are transferring shares from your Canadian Dollar account to your US Dollar account, try to do it before the date of record. And I guess if you’re transferring them the other way, also keep an eye on the Record date.

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Have you ever been caught by this quirk? Did it all work out as you expected? Please share your experiences with a comment.

How Can I Move a Stock I Hold from the Canadian Side to the US Side of my InvestorLine Account?

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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.

  1. Call InvestorLine at 1 888 776 6886.
  2. Provide your InvestorLine account number and your access password.
  3. 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.

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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.