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You're exposed to stock market risk during the journaling process though. Using DLR works, although the cost of the bid-ask spread is higher (about 20 basis points, as opposed to 1-2 on interlisted stocks). Still, that's a lot better than 200 basis points when using your broker to convert currency.
 

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You would still use Norbert's Gambit, except now it doesn't require autowash.

Old single currency RRSP:

Buy an interlisted stock on the Canadian exchange. Sell it on the US exchange. Autowash kicks in: it puts the proceeds of the US sale in the USD money market fund.


New dual currency RRSP:

Buy an interlisted stock on the Canadian exchange, in the Canadian sub-account. Journal it over to the US sub-account. Sell it there on the US exchange. The proceeds remain in the US sub-account.
So I just need to make a phone call to TDDI requesting that the shares be journaled over to the US side? Or is there generally an online way to journal over? Thanks for your help!
 

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So I just need to make a phone call to TDDI requesting that the shares be journaled over to the US side? Or is there generally an online way to journal over? Thanks for your help!
We don't know yet how the new dual currency RRSP will look. If it works the same way as their non-registered accounts work now -- which is very likely -- you will need to make a phone call.
 

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+1

And...I suspect whatever you have in cash, right now, is all CDN cash so any movement into USD $$ will cost you the F/X fee on top of the exchange rate.
US cash, is actually in the US$ MM through wash, so i assume this moves to the new Account, or maybe i missed something in their announcement of this being automatic. i assume that interlisted company will need be left in Canada if we don't call,
 

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here is a subtle point to add (from what i can gather the TD representatives have not yet been alerted to this.)

the big green says not to worry, securities will be lodged in whichever account is appropriate, whether CAD or USD. But we do not know what system they will use to determine which currency account is "appropriate."

will it be settlement currency? if so, there could be many mistakes.

will it be currency of dividend payment, if any? again, possibility of many mistakes.

over at bmo, they have an interesting system for correcting these arrangements. BMO has received an avalanche of ex-TD registered accounts ever since it debuted its dual-currency RRSP in 2011. When monocurrency accounts are transferred from monocurrency RRSP brokers such as TD, all securities arrive at BMO via the CDS system. All securities are flagged as CAD, of course, even all of the arriving american stocks such as AAPL or MRK.

the BMO agents have all been trained to work with clients on this issue. At the first establishment of each new transferred account, the new client is invited to manually inspect his portfolio so as to decide whether each security should be held on CAD side or USD side. The licensed reps help with these inspections as best they can.

imho, TD should train their agents to provide the same service. This includes training agents to explain to clients about the "oddball" securities, for example the 20 big canadian companies (potash, thomson reuters plus 18 others) that pay their dividends only in US dollars.

imho there is no way any broker can automatically "know" in which currency account a security should be held. Only the investor himself can decide that.
 

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thanks humble_pie. something more to worry about, and to have to Call for a "WEb"-broker service.

not really something to worry about because it's easy to do.

there is no way any broker could ever figure out what, precisely, serves each investor's long-term interests. Brokers cannot mysteriously & miraculously decide what is best for each client.

for example, with respect to the 20 canadian payors of USD dividends, these stocks would normally be kept on USD side of the account.

however there can be exceptions.

for example, an investor client who has only 200 shares of goldcorp (one of the 20 USD payors) but no other USD holdings might not want those paltry few dollar dividends paid in USD, because the US funds received would serve for nothing in the account. Instead, such client might be happy to pay the broker's FX fee on the paltry few dollars & receive those divvies in CAD, so that he could add the money to other CAD cash holdings.

bref, DIY investors have to manage their accounts properly! Surveilling the new TD registered accounts & making sure each security is in the right currency sub-account is a very minor, once-only task imho.
 

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it will be ok :peach: ask back here if you think you're running into a glitch

this - the final grooming & settling of the registered account holdings in the new TD system - will be a beyond-automation procedure. It can really only be done by hand.

not a big deal at all. Don't you, after all, look at your registered account holdings from time to time? that's all it will be. Here & there, after the new accounts are set up, some clients will find that they need to tweak a couple of things.
 

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it will be ok :peach: ask back here if you think you're running into a glitch

this - the final grooming & settling of the registered account holdings in the new TD system - will be a beyond-automation procedure. It can really only be done by hand.

not a big deal at all. Don't you, after all, look at your registered account holdings from time to time? that's all it will be. Here & there, after the new accounts are set up, some clients will find that they need to tweak a couple of things.

i know, i guess i am already bitter that the change removes possibility to do NG without calling, that i am ready to find any flaws with it :stupid:....
 

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i know, i guess i am already bitter that the change removes possibility to do NG without calling

ah knows how ya feels

afaik the licensed reps are 100% in the dark, as much as we are, but they seem to sense that something is underway from the broker.

one was saying the TD could activate $15 journal transfer fees, to be used when clients are gambit/arbing currencies. He concurred with the majority who say TD clients will have to phone for a gambit sell side order.

i have a certain sympathy for the broker here because the big green does have to process the phoned order & they do have to wire the credit department to alert them that the trade - which otherwise looks like a naked short to the backside of the website - is, in fact, covered by the buy which the client has just made.

there is definitely a cost to the broker for all this work. Most other brokers face challenges re gambitting as well.

the only 2 exceptions are BMO & royal bank. Both offer gambit trades that are homefree, dreamlike, cheap, instant & 100% online.

it's like all the surveys say. Every broker has strengths & weaknesses, the investor has to find the best match for his needs.
 

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i have a certain sympathy for the broker here because the big green does have to process the phoned order & they do have to wire the credit department to alert them that the trade - which otherwise looks like a naked short to the backside of the website
I don't. It's their trading app. They could fix it instead of hiring brokers to implement the workaround.

They could also just offer decent FX rates. If they only took 50 bps I would probably just use their FX facility.
 

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but why would the TD "fix" it when offering gambit trading is not any kind of priority for them?

no broker really wants to offer gambit trading. They'd much rather clients would pay their FX fees.

there's a very long history here that i'm omitting. But at the end of the day, parties with frequent currency arbitrage trading needs should go to BMO, royal bank or interactive brokers, which has good forex trading. Parties needing RRSPs or TFSAs have to stick with bmo or roybank since IB offers neither.

afaik *all* brokers, without exception, are still charging FX fees in all CAD accounts that hold any of the 20 canadian stocks that pay USD dividends. Familiar names like potash, thomson, encana, magna, methanex, agrium, goldcorp, open text.

some of these cases are probably going to show up in the new TD dual currency registered accounts. I imagine that TD will file most of those 20 canadian stocks in CAD accounts. This will mean that FX fees will be charged on their dividends, exactly as before :biggrin:

the cure is to journal the stocks to US account. Client has to phone. hello! didn't we come in right about here?
 

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the cure is to journal the stocks to US account. Client has to phone.
Is there a regulatory requirement that this has to be hard to do? That TDDI can't provide a journal function right there in the U/I?

I'm not arguing that simplifying FX handling is, or even ought to be, a priority for TD -- only that I have no sympathy for the trouble I might put them to, to do it the way they have chosen for themselves. If they find it expensive or inconvenient to service arbitrage transactions, they know how to fix it. As you say, and I agree, they prefer to pocket money from the userous FX spreads and so you have to pay careful attention.
 
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