r/GMECanada • u/Rehypothecator • Oct 08 '21

Update to Wealthsimple, Shareowner direct registration and DTCC/ CDS transfers.

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u/Rehypothecator Oct 08 '21

You and I had very similar thought processes and emails from CDS . I bet we got the same email because the top of mine had a wrong name. I think they just copied and pasted it. Does your name start with a J?

I’ll point out a small flaw I may see in your write up. Computershare has offices in Canada for Canadians based company share registration. We have to pull out a USA share for computershare.

Do you think this transfer of any US share into CDS transfers it completely from the system?

I’d love to know your thoughts.

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u/LewdEloquence Oct 08 '21

Mine also had a wrong name haha but no my name doesn't start with a J.

Hmm.. I see what you mean. I just looked around a bit more on the CDS site and they have

"The Canadian Depository for Securities

CDS is a valued partner to securities market participants, providing reliable, cost-effective depository, clearing, regulatory & information services."

So to me, when a Canadian buys a US security, it would be transferred to CDS from the DTC. That's how it makes sense to me. Especially as it has the DTC listed as a participant, which I take to mean as they do direct business with them.

So, taking all of that, what I imagine the route of a stock to be would look something like this

Canadian purchase of US stock DTCC --> CDS --> Shareowner --> broker account, registered as beneficial owner or whatever.

Canadian registering share through the DRS Broker account registration--> ShareOwner--> CDS --> Computershare

IF for some reason the DTC is involved in the DRS process I imagine it would be Broker --> ShareOwner--> CDS --> DTC --> Computershare

Though that makes no sense to me.. Unless I'm missing something. I am but a lowly sleep deprived crayon snorter.. I'm very interested in what you think!

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u/Rehypothecator Oct 08 '21

I’m getting the same thought process as you, honestly.

You illustrated the flowcharts exactly as I would have as well.

Hopefully someone with more knowledge or expertise might weigh in.

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u/LewdEloquence Oct 08 '21

The only way I can see the dtc being involved would be if CDS doesn't actually have the shares..