If you are looking to register your shares with a transfer agent via DRS (often referred to as withdrawing your shares to DRS), there are a few things that you should know before doing so.
- What is a DRS statement and why are they used?
- What's the difference between holding shares at Wealthsimple and registering shares with DRS?
- Fees involved in registering your shares with DRS
- How to submit a share withdrawal request
- Frequently asked questions
What is a DRS statement and why are they used?
A Direct Registration System (DRS) statement is a replacement for a physical paper share certificate. It's a piece of paper (as opposed to a certificate) that provides shareholders with evidence of how many shares they own (electronically) on a register.
Most transfer agents use DRS statements because they are cheaper and easier to replace than physical share certificates. This reduces costs, and avoids the risk of people losing a physical share certificate.
What's the difference between holding shares at Wealthsimple and registering shares with DRS?
Holding shares with Wealthsimple Invesetments Inc.
- Shareholders that hold shares with Wealthsimple or any other broker are typically referred to as beneficial shareholders. This means that they hold shares under Wealthsimple Investments Inc. (our participant broker name) which is subsequently under a depository agent.
- The depository agent is the entity that would be listed on the on the assets’ registrar with the transfer agent. This means that any share-related activity or announcements (i.e. voting, corporate actions, dividends, tax forms) will be communicated from the transfer agent, to the depository agent, to Wealthsimple Investments Inc. and then to our clients
- Since Wealthsimple Investments Inc. is a licensed brokerage, shareholders who hold under us are able to easily trade their shares in the market by instructing us via the Wealthsimple platform.
Registering your shares with DRS
- In order to register your shares with DRS, you must hold your shares with a transfer agent
- Most transfer agents cannot facilitate trading (buying/selling shares) for their registered holders since they do not have a broker license.
- Shareholders that hold shares with a transfer agent are typically referred to as registered shareholders. This means that shares are held in the individual’s name on the registrar with the transfer agent.
- Any share-related activity or announcements (i.e. voting, corporate actions, dividends, tax forms) will be communicated and facilitated by the transfer agent directly to the registered shareholders.
Fees involved in registering your shares with DRS
Due to the special nature of a share withdrawal, there is a $250 Certificate Withdrawal fee to process the request.
If you decide to proceed, we will arrange to have this fee charged to the account of your choosing.
How to submit a share withdrawal request
Typically, the overall processing time for this type of withdrawal is 4-7 weeks, however, it can take longer. Once the withdrawal and re-registration is complete, further transactions will be done directly with the transfer agent.
If you are interested in withdrawing your shares to DRS, please reach out to our support team and confirm —
- Your full name
- Your current mailing address for the DRS statement to be sent to (this cannot be a P.O. Box)
- The name of the shares that you would like to withdraw
- The number of shares that you would like to withdraw
- The account that you are withdrawing the share(s) from (TFSA, RRSP, or Personal account)
- If you are withdrawing the shares from your TFSA or RRSP this will be deemed a withdrawal and will be subject to tax implications. You can read more about withdrawing from your RRSP and TFSA in the linked articles.
- Additionally, if you do not already have a Personal self-directed stock trading account opened on Wealthsimple, we will require you to open one in order to facilitate the withdrawal to DRS.
- You have an available balance of $250 CAD (depending on the province you reside in) within the account that you are withdrawing from, to cover the fees outlined above
- You give us your consent to withdraw the $250 fee from your specified account
Frequently asked questions
Do I own my shares at Wealthsimple?
Shares are held in "street name" meaning they are held with Wealthsimple Investments Inc. but owned by you (the purchaser). You still retain ownership and all rights associated, such as dividends and voting rights. Wealthsimple also does not loan out your shares.
Can I sell my shares once they have been withdrawn to DRS?
You cannot trade your shares once they have been transferred to DRS. In order to sell your shares after they have been transferred to DRS you would need to deposit the shares with a broker.
At this time Wealthsimple does not support the ability to have US shares held via DRS deposited into our platform, so the shares would need to be deposited with another broker.
Can you process my shares on a last-in, first-out basis?
No, shares cannot be withdrawn on a last-in, first-out basis. The shares, once withdrawn, will reflect the average cost basis.
For example, if you are holding 10 shares, 5 of which you purchased for $1/share and 5 purchased for $2/share, and would like to withdraw 5 shares, the cost reflected with the transfer agent will be the average of all purchases ($1.5/share).
Where can I find the proof of the withdrawal within my profile?
While the withdrawal does not appear within the activity of your profile due to the manual nature of the process, you will be able to see the details of the share withdrawal within your monthly account statement.
Monthly statements are generated by the 5th business day of the following month (ie. this month's statement will be available by the 5th business day of next month).
When the DRS withdrawal is complete, will I receive information on how to log in and access/create my account with the transfer agent?
Once your shares become registered via DRS (with a transfer agent), they should send you a letter in the mail. As Wealthsimple does not have visibility on the processes or timeliness of any institution aside from our own, it would be best for you to contact the transfer agent directly.
Can you expedite my withdrawal request?
No, we are unable to expedite any withdrawal requests. These requests are processed on a first come first serve basis.
Why can’t I see my shares at Wealthsimple, or with my transfer agent?
It is likely that your shares have been withdrawn from Wealthsimple and are currently being processed by our processing provider or the share’s transfer agent, However, with current volumes, we have seen that it can take 4-7 weeks before you see the shares reflected in a DRS online. Wealthsimple has no visibility once the shares have left your account with us.
When the shares leave your Wealthsimple account (generally within 7 days of your withdrawal request being confirmed by our team), our processing provider will begin to process the request on their side before your shares arrive with the transfer agent. This can take 2-3 weeks for them to process. Once the shares are in possession of the transfer agent, they will send you the physical DRS statement, which can take an additional 2-3 weeks for you to receive.
Why is my book cost different with my transfer agent than what it was with Wealthsimple?
Withdrawing from a registered account (TFSA, or RRSP): The book cost listed at the transfer agent will be reflective of the market price of the shares at the time that they were received by the transfer agent.
- This new book cost is accurate - and is a result of the shares being moved into a non-registered account (becoming non-tax sheltered). As a result of withdrawing from a registered account, all future gains on your shares will be subject to capital gains upon selling, however, any gains that you had earned prior to withdrawing your shares, would be sheltered from tax.
Withdrawing from a Personal account: If you see that the book costs with the Transfer Agent are inaccurate, you can contact them directly and provide them with your most recent Monthly account statement showing the original book cost of your shares, so that they can update the book cost on their end.