Vanguard's distribution reinvestment plan (DRIP) will reinvest Vanguard ETF® cash distributions without charging a commission. Under the plan, distributions are reinvested to buy more units of the same ETF. Your clients pay no commissions and fund distributions stay in the market (unlike cash).
How to enrol
To enrol a client, simply tell your broker, dealer or other financial institution (CDS participant) before the ETF's distribution record date. Once your clients are enrolled, their distributions will automatically be reinvested into units purchased on the open market in the five business days following the distribution payment date. They'll receive their new units on or about the sixth business day after the applicable distribution date.
By participating in the DRIP, your clients can keep more of their investment working for them, without having to remember to reinvest distributions and without incurring commissions.
The price of the new units will be the average price of all units purchased under the plan excluding commissions, fees and transaction costs incurred by the plan agent. Fractional units won't be purchased, but rather paid back into your clients' accounts as cash. Also, your clients must be residents of Canada for Income Tax Act (Canada) purposes to participate.
The content on this webpage is to be read in conjunction with the DRIP Plan materials available via hypertext link on this webpage. The effective date of the plan is November 8, 2012. All Vanguard ETF cash distributions are eligible for the DRIP. All cash distributions paid by the Vanguard ETF must be reinvested if you enrol in the DRIP. Investors are liable for any taxes that may be payable as a result of cash distributions that are reinvested in the Vanguard ETF under the DRIP. Investors should consult their own investment advisors, legal advisors and/or tax advisors for any advice tailored to their own needs or circumstances concerning the various implications of participation in the DRIP.