To consolidate or not to consolidate

Quite often, our issuers ask us about merging investor accounts, a process known as consolidation.

Account consolidations can occur either when a new investor is added, or after that person becomes a shareholder. However, CIBC Mellon only consolidates when we are certain that the accounts being merged belong to the same investor. 

Initial account setup

CIBC Mellon has checks in place to compare new investor registrations against registrations already present. If the new registration being entered matches an existing one, shares will automatically be posted to that account.

Should there be a difference in the registration (for example, a middle initial instead of a middle name or an address formatted differently) our system allows input specialists the choice to post shares either to the existing registration, or to create a new one.

If there is any doubt that the two registrations are not for the same person, we take a conservative approach and create a new account, unless there are specific instructions from the investor or their representative. 

Investor service

When an investor wishes to combine multiple positions and CIBC Mellon is satisfied that the two positions are for the same investor, we can (upon written request) combine the two registrations.

Our system features safeguards that warn against and even inhibit consolidations if investor information does not match - for example, a different name, address, or social insurance number.

Often, we produce lists of investors with duplicate or similar accounts. These lists are used to identify situations where investor information could be potentially combined, reducing the cost of investor service.

From time to time, and prior to a dividend payment, we automatically review the shareholder register and consolidate any accounts that clearly match.    

Consolidating investor mailings

We are also asked about the possibility of combining mailings to different investors that reside at the same address, even while continuing to maintain separate registrations.

This process, known as householding, is not permitted under Canadian provincial securities acts, and even under some companies’ incorporating statutes. This is true for both registered and non-registered positions.

We hope this information has been helpful to you, as an important part of CIBC Mellon’s registrar responsibilities is to control the number of investor accounts, and the related costs of investor service and fulfillment.

By James Hinnecke, director, product management 

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Inform® is provided for general information purposes only and CIBC Mellon Trust Company, CIBC Mellon Global Securities Services Company, CIBC, The Bank of New York Mellon Corporation and their affiliates make no representations or warranties as to its accuracy or completeness. Readers should be aware the content of this publication should not be regarded as legal, tax, accounting, investment, financial or other professional advice nor is it intended for such use.