So you invested in a private company that is about to list on a public exchange...now what?
What Happens?
When a company is getting ready to list, they will have a third party (a "Transfer Agent") prepare what is called a Direct Registration System (DRS) statement for all investors. This statement will be provided to you upon the completion of the transaction and public listing, either through email or registered mail, or both!
A Direct Registration System (DRS): The DRS is a system that allows registered securities to be held in an electronic format rather than a physical Share Certificate being issued to prove ownership of the shares. A DRS Statement can be thought of as an electronic share certificate.
FrontFundr will provide updates along the way, so you will know what is happening, and when.
What Do I Need To Do?
Once you are in possession of your DRS statement, you will need to send it to your broker to deposit the shares into your trading account. Some brokers may ask for you to send the DRS Statement via mail, while others will accept a photo copy via email.
Once this process is complete, you will see the shares in your account, as you would with any of your other publicly traded companies.
Depending on the broker, there may be up to a week or two delay between the time you submit the DRS statement, and seeing the shares in your account.
Important Things to Know!
Every broker has their own fees involved in depositing a DRS Statement, annual fees, buying/selling transaction fees, etc. Unfortunately, depositing a DRS is a service that is not free.
Below is a list of common brokers used, and the cost for depositing a DRS Statement:
WealthSimple: $250
Interactive Brokers: $5
Questrade: $300
Q-trade: $150-$300*
Olympia Trust: $100
TD Direct Investment: $57-$150*
RBC Direct Investing: $50-$200*
*Rushed deposits and DRS statements of US Companies increase the cost.
If You Already Hold The Shares At a Trust Company
If you originally purchased your investment via Olympia Trust, Western Pacific Trust Company, etc. then your DRS will be sent directly to the Trust Company to process for you. This ultimately speeds up the process, and decreases associated costs.