What is CDS?
Answer: The Canadian Depository for Securities Limited is Canada's national securities depository, clearing and settlement hub, CDS supports Canada's equity, fixed income and money markets, handling over 50 million securities trades annually. CDS settles over 13 million cross-border transactions with the U.S. annually.
What does the company need to do when we have a change in directors/officers?
Answer: Advise us immediately of any change to the directors and officers of the corporation. This document provides us with a clear direction as to who can act on behalf of the company. The company can advise us of any changes to the list by executing and emailing a Certificate of Incumbency and a Certified List of Officers and Directors to P & S Transfer along with new signature samples for the certificates.
What are my company's obligations in providing information to its shareholders?
Answer: The following must be provided to shareholders:
- Notice of the time and place of meeting
- Form of proxy
- Information circular, the contents of which will be dictated by the nature of the business to be brought before a meeting Y/E Financial Statements
- Quarterly financial statements, unless a supplemental mailing list request form has been supplied to all shareholders, in which case, only those shareholders who reply are required to receive statements.
What is a CUSIP number?
Answer: CUSIP stands for Committee on Uniform Securities' Identification Procedures. A CUSIP number specifically identifies a particular security. This number is particularly important within the broker community in that brokers make all identification of securities by the CUSIP number. All issuers are required to obtain a CUSIP for each security issued.
What is ISIN?
Answer: An International Securities Identification Number (ISIN) uniquely identifies a security. Securities for which ISINs are issued include bonds, commercial paper, stocks and warrants. The ISIN code is a 12-character alpha-numerical code that does not contain information characterizing financial instruments but serves for uniform identification of a security at trading and settlement. Securities to which ISINs can be issued include debt securities, shares, options, derivatives and futures. To read more of the structure it is defined in ISO 6166.
What is a Cease Trade Order?
Answer: A Cease Trade Order is issued by the Securities Commission restricting the trading of the securities of a company. Cease trade orders are normally the result of the company failing to comply with securities regulations such as providing financial statements on a timely basis. You may contact the appropriate securities commission by phone or on their website for the reasons and the date of the cease trade order.
NOBO's and OBO'S
Answer: National Instrument 54-101 provides Issuers with the option to mail meeting material directly to their Non-Objecting Beneficial Owners (NOBOs). NOBOs are beneficial owners who have indicated that the Issuer can know who they are. Beneficial security holders have the option of being an Objecting Beneficial Owner (OBO) which means that their contact and ownership information must remain private. Beneficial security holders are investors who hold their securities through an Intermediary. The Intermediary, in turn, typically holds the securities through a depository, such as the Canadian Depository for Securities (CDS), so the name of the beneficial security holder does not appear on the share register. National Instrument 54-101 allows an Issuer to mail material directly to their NOBO security holders, by requesting record date security holder information from the Intermediaries following the process set out in National Instrument 54-101. Reliable requests NOBO shareholder information on your behalf and manages the tabulation all votes received.
What is a "registered owner"?
Answer: The registered owner of shares is the shareholder of record on the books of the corporation, generally kept by the transfer agent. The registered owner may be an individual, a trust, a broker, etc. Registered owners receive communications, proxies, dividends, etc. directly from the corporation through the transfer agent. A registered owner differs from a "street name" owner.
What is "street name"?
Answer: Securities held in a broker account and registered in the name of the broker or other institution is referred to as being "in street name." As the manager of a public company, you will see the broker, for example, as the registered shareholder of your stock. One broker position will represent any number of individual owners (beneficial owners), most of whom will remain anonymous to you.
What happens if a shareholder loses a stock certificate?
Answer: The shareholder should contact our office. We will place a "stop" on our records to prevent the certificate from being transferred. We will also supply the shareholder with the forms required for obtaining a replacement certificate. A surety bond will be required. The shareholder will have to pay a premium for this bond; the cost is generally 3% of the value of the certificate lost.
My legal name has changed, how do I make changes from my old name?
Answer: If you are a registered owner, to change the name that appears on the certificate you must:
- Complete the reverse side of the certificate
- Place your signature on the signature line, exactly as it appears on the face of the certificate.
- Have your signature guaranteed by a Schedule I Canadian Chartered Bank, or financial institution that is a member of a recognized Medallion Signature Guarantee (STAMP) Program.
What is Rule 144?
Answer: Rule 144 of the Federal Securities Act of 1933 concerns restricted securities. Stock issued directly by an issuer or acquired by an insider or control person is always restricted in nature unless there is an exemption, registration, or other safe harbor that allows the stock to be free-trading. Rule 144 provides a way for shareholders to sell stock that is restricted, once certain provisions are met.
Important: The information on this page is based on the assumption that the issuer has either never been a shell or, if so, has complied with Rule 144(i)(2).
If you are eligible to release the legend from your shares under Rule 144, you have two options.
Option 1: Broker
You can submit your certificate(s) to your broker for 144 processing. In most cases, your broker will assist in gathering the required documents, and then arrange for us to release the legend from your shares so that free-trading stock can be deposited directly into your brokerage account. (Please note: Insiders must follow this option.)
Option 2: Direct
You can submit your certificate(s) to P & S Transfer Agency directly for legend removal if you are a non-insider/non-affiliate of the issuing company. We will arrange for a free-trading stock certificate to be sent to the destination of your choice (usually your home, office, or broker).
Either way, we require the following documents:
- Original Stock Certificate(s)
- Representation Letter
- Legal Opinion
- Instruction/Delivery Letter
- Applicable Fees
- Form 144 (for insiders/affiliates ONLY)
Why do I require a signature guarantee (Medallion guarantee)?
Answer: A signature guarantee is required to transfer a security as it provides the transfer agent and the company with some proof that the registered owner of the security wishes to transfer the security and to relinquish ownership.
In Canada, there are two acceptable ways to guarantee a security:
- A signature guarantee from a Schedule I Canadian Chartered Bank. This form of guarantee is represented by a stamp from the financial institution and is signed by an officer who guarantees that the signature is genuine. The officer must also provide his/her bank identification number.
- The second acceptable form of guarantee is to have a financial institution (broker, dealer, etc.) place a Medallion Signature Guarantee supported by a recognized Security Transfer Association Medallion Program indicating that the signature is genuine.
I have my securities offshore, how do I have my signature guaranteed?
Answer: If you reside offshore, you can have your signature guaranteed by a representative at a local branch of a Schedule I Canadian chartered bank and he/she can make arrangements to have the security over guaranteed in Canada by the same bank.
When do I require a Corporate Signing Resolution?
Answer: A Corporate Signing Resolution is required to transfer a security that is registered in the name of a company. The Corporate Signing Resolution identifies the individual(s) who has been given the authority to sign on behalf of the corporation. The resolution must be dated within 6 months of the date the certificate is presented for transfer and specimen signature(s) must also be provided. The individual endorsing the certificate must be different from the person certifying the corporate resolution unless there is only one signing officer. A signature or a Medallion STAMP guarantee is also required when a resolution is presented with the certificate.
What is the difference between having a security registered in my name or having a broker or financial institution hold the security on my behalf?
Answer: There are both advantages and disadvantages in holding securities in either form. If you have a security registered in your name, you directly receive any dividends, shareholder communications and other entitlements. You are also able to attend and vote in person or by proxy at any shareholders meeting. The disadvantage is that by holding securities in your name, it may take longer to sell or dispose of your security.
If you buy securities from a broker or other financial institution, the securities are not registered in your name but in the broker or financial institution. You are entitled to receive dividends, shareholder communications and other entitlements through your broker. You are also able to attend and vote at shareholders meetings but you can only do so by using your voting instruction form if by mail or by advising your broker you wish to attend whereby the broker will designate you as having a proxy. Should you wish to have your securities registered directly in your name, instruct your broker at the time of purchase. Ensure you register your securities in your legal name.
How do I transfer my certificates to another individual? And what if the shares are registered in the name of a corporation?
Answer: There are many variables that may affect specific transfers, but, in general, if the certificate is registered in your name, here are the steps to follow (if you are delivering your shares to a broker because you have sold them or otherwise disposed of them, the requirements will be similar but you should check to see if they have any individual requirements):
Print on the reverse side of each certificate exactly how you wish the new certificate to be registered or provide signed written instructions along with the certificate. Sign the reverse side in the exact way the registration appears on the face of the certificate
Complete a Stock Power of Attorney form (in a similar manner as described above as the form is similar to what appears on the back of a share certificate) and attach it to the certificates. You must sign the reverse of the certificate or a stock power of attorney in the appropriate place and have your signature guaranteed by a Canadian chartered bank or a member/participant in a recognized medallion signature guarantee program There is an additional requirement for shares registered in the name of a corporation. A resolution that is dated, or has been signed, within the last 6 months that appoints one or more persons to sign on behalf of the corporation must be delivered with the certificate (or stock power of attorney) signed by the person or persons with the appropriate medallion signature guarantee. Note the resolution must be certified by someone other than the person designated in the resolution unless there is only one signing officer for the corporation. If there is only one signing officer for the corporation, the resolution must state that the person signing the resolution is the "sole signing officer".
I have shares registered in the name of a trust, what are the transfer requirements?
Answer: There are two situations depending on whether the trustee is named in the registration, or the certificate is in the name of the trust itself. A certificate should never be registered in the name of an entity if there is no agreement or legal documents creating the entity and providing for the administration of the assets held by the entity.
If the trustee appears on the certificate then all that is required are the normal transfer requirements for an individual, if the trustee is a person. The trustee would endorse the certificate as the trustee and have his or her signature guaranteed. If the trustee is a corporate entity, then we would require documents identifying those who could sign on behalf of the corporation; the individual(s) named would have to endorse the certificate and have his/her (their) name(s) guaranteed.
If the certificate is in the name of the trust, then the agreement or document (the original or certified copy) creating the trust must be presented with the transfer request, and the appropriate parties named in the trust document must endorse the certificate and have their signatures guaranteed.
I am the executor of an estate, how do I transfer certificates held in the name of the deceased?
Answer: This form is to be used by an Executor or Administrator of the estate to transfer securities registered in the name of the deceased to the Estate of the Deceased or to a Beneficiary of the Estate. The Declaration must be sworn before a Judge, Justice of the Peace, Notary or any person that is permitted to take affidavits to be used in Provincial or Federal courts.
The original certificate must be provided with the completed Declaration and the Certificate must be endorsed by the executor and guaranteed by a Schedule I Canadian Bank or a financial institution that is a member of a recognized Medallion Signature Guarantee Program.
The form must be accompanied with an original or notarized Copy of the Letters Probate or a Probate Bond of Indemnity. To transfer the securities to the beneficiary, the executor must complete the registration panel indicating that the securities are to be transferred directly to the beneficiary.