The DRiP Investing Resource Center The DRiP Investing Resource Center

How To Coordinate Group Buys

by Darcy Wall

  1. Ensure you have enough funds to cover the transaction
  2. Open a discount brokerage account
    • Choose a brokerage company
    • Open an account
    • Verify/Activate account
  3. Transferred money to broker account (by sending them a cheque for the funds or internet bill payment)
  4. Post group buy notification to the Share Exchange board. Include the following: (see SAMPLE GROUP BUY NOTIFICATION)
    • COMPANY NAME and sticker symbol
    • Number of participants
    • Ask to include their board names in their email
    • Ask to be email directly - do not post to dripinvesting.org boards
    • All emails and email addresses should be deleted after completion of the group purchase
    • All emails will be sent via BCC format (i.e. their email address will be kept secret)
    • State that you are following the guide lines
    • Provide your email or ensure it is listed in your profile
  5. Collect enough participants (10 is a good number so yourself and 9 others)
  6. Once you have all your memebers, post a response to your notification stating it is closed and list all members via their board names
  7. Email group buy members with a statement of what you are going to do. (see SAMPLE EMAIL TO GROUP BUY MEMBERS)
  8. Execute the trade (procedure varies depending on your brokerage company)
  9. Notify group members of transaction costs
    • ([share price x qty] + commissions + certificate)/number of participants
  10. Order share certificate
  11. Get a single certificate with all the shares
    • OPTION depending on brokerage company: Get individual certificates for each share (addition fees for this option - if not all members agree to this the cost should not be split amongst all members)
  12. Collect money
    • PayPal (plus any fees for you using this service)
    • E-mail Money Transfer (plus any fees for you using this service)
    • Money Order
    • Cheque
    • Certified Cheque
  13. Collect Full Name you want the share Registered in (If in trust then Full Name ITF Child's Name)
    • Recommendation - The name that appears on the certificate should be the same name that you sign things with (i.e. cheques/drivers license/etc) or what name appears on your cheques that you would be sending in with your SPP payments.
  14. Collect Full mailing address
  15. Once all payments have been cleared - Based on one certificate with multiple shares - Once the share certificate is received fill out the necessary paper work and submit it directly to the transfer agent for company you purchased (with the documentation submit instructions to send the share certificate in purchasee's name with SPP/DRIP documentation directly to the purchasee - although the transfer agent might just point you to their website to download the forms)
    • Fill out a Securities Transfer Form
      • Complete Name and Address of who you are selling the share to (Transferee)
      • Specify the number and type of stock (i.e. 1 Common Stock)
      • Specify who the share is currently registered to
      • Specify what company the stock is for
      • Specify the certificate number
        • i.e. For value received, the undersigned hereby sell(s), assign(s) and transfer(s) unto John Doe (Please see attached Letter Of Direction), mailing address, city, province, country, postal code, 1 Common Shares registered in the name(s) of Janet Smith on the books of COMPANYabc and represented by certificate(s) or account number(s) 123456789 and hereby irrevocably constitutes and appoints Transfer agent the attorney of the undersigned to transfer the said securities with full power of substitution in this manner.
      • Date and sign it when you are at the bank
    • Attach a Letter Of Direction (This is used when you are transferring shares to multiple people. There is not enough room on the back of the certificate so you add the some comments for each other person in the Letter Of Direction)
    • Have the Securities Transfer Form stamped with the signature guarantee
    • Send Certificate; Securities Transfer Form and Letter of Direction to the transfer agent via registered mail
  16. Ask all participants to email you once they receive their individual certificates (there is not much you can do for them now, but it is nice to know that everyone is happy)

Notes on using eNorthern as brokerage company

  1. They are the cheapest when compared to other firms
  2. It only takes $1 to open an account
  3. My account was opened and activate with 5 business days (as soon as they received my cheque and deposited it)
  4. It took the usual amount of time to deposit money into my account via internet banking 3 days
  5. It took 1 day for my trade to show up in my account
  6. It takes 3 days for the transaction to complete and I have full ownership of the stocks
  7. I can email them my request to have the stocks taken out in a certificate form.
  8. It will take 5 days for the request for certificate
NOTE: eNorthern will ONLY issue a certificate into the name of the account holder.

Receiving shares in different manners

Certificate registered in your name: If the share certificate is in your name then move on to enrolling in the DRASP.

Certificate registered in another persons name: If the share certificate is in another users name but has your name on the back for transfer; with the number of shares to transfer and it has the original owners signature and the banks signature guarantee then complete the missing information (mailing address; SIN) - now send it via registered mail to the transfer agent. Once you receive a new certificate registered in your name move on to enrolling in the DRASP.

Power Of Attorney: This is esentually the same as having the original certificate with the back being filled out. It is transferring a share out the of the owners account into your name. Ensure your name; address; number of shares; type of share; company name and account number are filled out and it has the original owners signature and the banks signature guarantee then complete any missing information (SIN) - now send it via registered mail to the transfer agent. Once you receive a new certificate registered in your name move on to enrolling in the DRASP.

Enrolling in DRASP

  1. Receive certificate in your name
  2. Fill out enrollment form
    • Enter certificate number and name and address
    • Enter your Social Insurance Number
    • Choose your language
    • Select that you wish to enroll in the DRiP
    • Select that you wish to enroll in the SPP and enter amount of your first deposit
  3. Fill out participant declaration form
    • Enter plan sponsor as the Company Name
    • Enter account number is your certificate number
    • Enter your mailing address
    • Enter home phone number
    • Enter account holder name
    • Enter your Date of Birth
    • Enter your occupation
    • Choose if there is a third party involvement or not
    • Enter the amount of your OCP payment, sign and date
  4. Send in OCP payment with forms
    • OCP payment has to be from a personal cheque
    • Make cheque payable to the Transfer Agent
    • Memo - should contain the company name (or stock ticker symbol) and account (certificate) number
  5. If you don't already have an account the the Transfer Agent, proceed opening one up so you can check the status of your investment.
  6. Once you have made your first OCP and it is shown in your account, PAY IT FORWARD by trading or selling your certificate. OR use the Power Of Attorney form to transfer a share out of your account to someone else.

If you ever have any problems or questions call the Transfer Agent that is involved with the company. They are very helpful!