Insert planning.v19

Welcome aboard.
TM
TA B L E O F C O N T E N T S
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A DISCIPLINED APPROACH TO INVESTING
2
Whatever your goals may be – whether you are investing for
your children’s education, your own retirement or a vacation
property – we believe that a disciplined approach to investing
will help you achieve them.
At the heart of
PLANNING
your
strategy
our disciplined
T
OR
PP
SU
T
Manage and Support.
OR
Plan, Select,
PP
four principles:
3
SU
approach are
MANAGING
your
portfolio
SELECTING
SUPPORT
your
investments
Check out the Online Demo at bmoinvestorline.com to find
out how a disciplined approach to investing can benefit you.
Accessing Your Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Online at bmoinvestorline.com
Automated Telephone Trading service
BMO InvestorLine Representatives
Investing with BMO InvestorLine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Investment Choices
Settlement of Trades
Options and Short Selling
Making Deposits to Your BMO InvestorLine Account
Making Securities Deposits and Withdrawals
Pre-authorized Deposit or Contribution Enrolment
Transferring Accounts from Other Financial Institutions
Dividend Reinvestment Plans (DRIPs)
Your Account Statements
Registered Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Eligible Investments
Ineligible Investments
Penalty for Ineligible Investments
Making Contributions to Your Registered Account
Tax Receipts
Swaps
Receiving Payments from Your RRIF
Settlement of Trades in Your RRSP/RRIF
4 Margin Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
Features of a Margin Account
Margin Calls
Access Your Buying Power
Eligible Investments for Margins
Ineligible Investments for Margins
Credit Limit
Margin Requirements
5 AccountLink service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Contact Us . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
1
ACCESSING YOUR ACCOUNT
2
INVESTING WITH BMO INVESTORLINE
Access Your Account Online
Investment Choices
Log into your account at bmoinvestorline.com for critical investment
information 24 hours a day, 7 days a week, to:
BMO InvestorLine offers you the following investment choices:
• obtain free quotes and news
• develop your investment plan
• make investment transactions
• research mutual funds and stocks
• track your portfolio’s performance and more
To safeguard your privacy, bmoinvestorline.com features the most
secure encryption generally available in North America.
Use the Automated Telephone Trading service
You may review your account through your touch-tone phone by
calling 1 888 776-6886.
Service is available in English, French, Cantonese and Mandarin.
Automated Telephone Trading lets you:
• obtain free real-time quotes on all major North American exchanges
• enter orders for stocks and options
• check your account balances and recent transactions
• review RRSP contributions, RRIF payment data and foreign
content positions
• keep current with Market Update, a two-minute commentary updated
throughout the trading day, featuring the latest market trends and indices
Contact BMO InvestorLine Representatives
If you require personal assistance, our team of experienced
BMO InvestorLine Representatives is ready to serve you, Monday to Friday
from 8:00 a.m. to 8:00 p.m. ET. Simply call BMO InvestorLine at 1 888 776-6886.
• Canadian & U.S. stocks
• Canadian & U.S. government and corporate bonds
• Canadian Federal and Provincial Treasury Bills and U.S. Treasury Bills
• Options
• New issues
• Over 2,000 mutual funds
• Canada Savings Bonds
• Strip coupon bonds
• Commercial paper
• Foreign exchange
Settlement of Trades
Your first trade
Payment in advance is required on first trades. For margin accounts, please
ensure that the margin requirement is in your account before making your
first trade.
Covering your trade
A deposit may be required on the day you place your order to cover the
value of the trade and depending on the type of security you are purchasing.
This also applies to all option trades and trades on margin. Certificates for
securities sold must be in your account before a sell order is placed.
Settlement date
You are required to settle trades by 10:00 am on the settlement date as
shown on the trade confirmation mailed to you. For most stocks, fixed
income products, and mutual funds (except Money Market funds, T-Bills
and Money Market instruments), this will be the third business day after the
trade is executed.
Securities industry regulations and internal policies require us to close out
trades that are not settled promptly. Any losses resulting from such “sellouts” or “buy-ins” are the responsibility of the account holder.
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Options and Short Selling
Making Securities Deposits and Withdrawals
You can buy or sell covered puts and calls on any exchange in Canada
or the U.S. online or by phone.
To place securities certificates in your BMO InvestorLine account:
1. Present the certificates to the BMO Bank of Montreal branch nearest you.
2. Complete the “Power of Attorney to Transfer Stock or Bond (LF255)”
form, available on the “Download General Forms” page in the Apply
Now section on our website. Or, you can endorse the certificates
exactly as registered on the front of the certificate. You will be
provided with a receipt.
3. Your securities will then be forwarded to BMO InvestorLine.
Short selling is also available. However, a high degree of risk is involved
in short selling securities. As such, this investment option may not be
suitable for every investor.
Making Deposits to Your BMO InvestorLine Account
You can make three types of deposits:
• Deposit into your BMO InvestorLine investment account or
contribute to your RRSP.
• Make spousal contributions to your Spousal RRSP account.
• Pay RRSP or LIRA administration fees.
For more information, refer to the
“Frequently Asked Questions” in
our Education Centre section at
bmoinvestorline.com. Please keep in
mind that transactions can take from
two to five business days to process.
How to make a deposit or contribution to your BMO InvestorLine account:
• Use your online or telephone banking service. Simply add us to your
list of registered billers in the “bill payment” section of your online or
telephone banking service.
• Use your BMO InvestorLine investment account like a chequing
account with full banking privileges. To learn more about AccountLink
service, see Section 5.
• Visit any BMO Bank of Montreal branch.
• Mail your cheque directly to BMO InvestorLine.
• Call a BMO InvestorLine Representative to transfer the funds from
your BMO Bank of Montreal account.
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Once deposited into your BMO InvestorLine account, these holdings will
appear on your statement.
If getting to a BMO Bank of Montreal branch is not convenient, you can
also send your completed form or your endorsed certificates directly to
BMO InvestorLine by Priority Post. (Please note that there will be a delivery
charge for Priority Post).
If you want to remove securities from your account, call us and we will
make the arrangements for you.
Pre-authorized Deposit or Contribution Enrolment
To set up regular deposits or contributions to your BMO InvestorLine account,
simply visit the Apply Now section at bmoinvestorline.com and choose
“Download General Forms”. Then, complete the “Pre-Authorized Registered
Contribution Enrolment Form” and send it to us along with a void cheque.
Transferring Accounts from Other Financial Institutions
To transfer an account from another broker or financial institution, you
will need to complete an “Authorization to Transfer Account” form. You
can find this form in the Apply Now section at bmoinvestorline.com under
“Download General Forms”. Once the completed transfer form is received,
we will arrange the transfer of all designated securities and cash from the
other institution. When the transfer is complete, your cash and security
positions will be updated and will appear on your next statement.
Note: Some mutual funds are non-transferable. Transfers can take from
two to six weeks to process.
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3
REGISTERED ACCOUNTS
BMO InvestorLine offers a variety of registered
plans for your retirement planning needs.
Dividend Reinvestment Plans (DRIPs) are available
The Dividend Reinvestment Plan (DRIP) allows
you to have the dividend payments of certain
stocks automatically reinvested to purchase new
shares of the same companies’ stocks at no extra
cost. You will enjoy automatic reinvestment, your
investment earnings will compound, and you
will automatically gain the advantage of dollarcost averaging.
For more information on DRIPs, please visit bmoinvestorline.com and refer
to the “Frequently Asked Questions” in the Education Centre section.
Your Account Statements
You will receive a statement for any month during which there is activity
on your account or, at minimum, bi-monthly.
An annual summary of your trading activity and a summary of interest,
dividends and expenses will also be mailed to you each February.
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Once you set up a plan, it is essential that
you select only qualified investments for your
BMO InvestorLine Registered Retirement Savings
Plan (RRSP) and Registered Retirement Income
Fund (RRIF).
Eligible Investments
• Cash – Canadian dollars only
• Cashable and regular Guaranteed Investment Certificates (GICs)
receiving interest annually; such as those issued through
BMO Bank of Montreal
• Shares and debt obligations of Canadian corporations listed on
recognized Canadian exchanges
• Bonds and debentures issued or guaranteed by the Government
of Canada
• Bonds and debentures issued by a province, municipality
or Crown corporation
• Bonds or debentures of a company whose shares are listed on a prescribed foreign stock exchange
• Strip coupon bonds
• Canadian dollar denominated Eurobonds
• Rights and warrants listed on any Canadian stock exchange that
can be used to purchase qualified investments
• Shares listed on a prescribed exchange outside Canada
• Units of a qualified mutual fund, such as those offered by
BMO Mutual Funds
• Covered calls, long calls and puts, and LEAPs
• Mortgage-backed securities
• Exchange Traded Funds
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Ineligible Investments
Making Contributions to Your Registered Account
• Employee options to purchase stock
• Gold, silver and other precious metals
• Shares of all private corporations
• Commodity futures or contracts
• Listed personal property, such as works of art and antiques
• Gems and other precious stones
• Land
• Bonds where the issuer is a wholly owned subsidiary and its
shares are not listed on a stock exchange
• Mortgages on non-arms length commercial properties
• Small business investments
• Uncovered call and put options
• Bonds or debentures of a company whose shares are listed only on a
prescribed foreign stock exchange even though the company’s shares
may be qualified
For complete details, please consult your tax advisor.
You have the option to:
• Deposit cash or cheque
• Deposit securities through any BMO Bank of Montreal
branch or through BMO InvestorLine
• Arrange regular contributions through a pre-authorized
retirement contribution (PARC)
Penalty for Ineligible Investments
In the event you acquire an ineligible investment or a previously eligible
investment becomes ineligible in your RRSP/RRIF, its acquisition cost must
be included in your taxable income for the year.
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See Section 2 for more ways to contribute to your registered account.
Canada Savings Bonds can be contributed:
• if accompanied by a power of attorney;
• if registered only in the plan holder’s name; and
• if they are not signed.
They cannot be used for a spousal contribution.
Only transferable, qualified investments will be accepted. The values
assigned to the securities for valuation and tax purposes are the fair market
value of the securities on the contribution date. The value will be established by BMO InvestorLine. Contributions of debt securities (i.e. bonds,
GICs, coupons) are valued at market plus accrued interest.
Tax Receipts
Tax receipts are issued in January for contributions made from March
through December of the previous year. Tax receipts for contributions
made during the first 60 days of the calendar year are issued weekly.
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4
MARGIN ACCOUNTS
Swaps
Features of a Margin Account
If you wish to substitute securities for cash, or cash for securities, simply
advise us of your plans so the fair market value can be established. This is
called a “swap” transaction. Please see the enclosed Commissions & Fees
brochure for any associated charges.
A line of credit is available for clients who wish to buy securities without
paying for them in full. The term “margin” refers to the portion of funds
the investor must provide, which, together with the line of credit loan,
is used to make the purchase. Margin accounts are only available as
non-registered accounts.
Receiving Payments from Your RRIF
A few points to keep in mind:
• You may apply for margin privileges by calling BMO InvestorLine.
• The margin account must be approved.
• BMO Bank of Montreal offers lines of credit in Canadian and U.S.
dollars at the very competitive interest rate of BMO Bank of Montreal
Prime +1% per annum.1
• The maximum loan granted against any one security is usually
$60,000 for non-option eligible securities, and $75,000 for option
eligible securities (subject to change at any time).
• Interest on the line of credit is calculated daily on the balance owing,
and is charged to your BMO InvestorLine account monthly.
• Owners of “control blocks” may not margin these securities.2
• When you place an order to purchase securities, sufficient margin
must be in your account in advance of the trade.
When you established your BMO InvestorLine RRIF account, you were
asked to indicate the frequency and amount of payment you wished
to receive. To change this amount, simply advise us in writing at the
appropriate address shown in “Contact Us”. It is your responsibility
to ensure that sufficient cash is available in your account to cover
planned payments.
Settlement of Trades in Your RRSP/RRIF
Sufficient cash must be in your account before you make a trade. This is
designed to protect you against purchasing securities and subsequently being
required to make a contribution or over-contribution to cover settlement.
Margin Calls
Accounts are monitored daily to ensure sufficient margin levels are
maintained at all times. If the price of a margined security falls to the point
where the account becomes under margined, you will be requested to:
• deposit funds or marginable securities to your BMO InvestorLine
account to cover the shortfall; or
• provide instructions as to which stocks to sell.
The shortfall must be covered immediately that afternoon. If covered by the
sale of securities, the securities must be in your BMO InvestorLine account.
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Access Your Buying Power
Margin Requirements4
The credit facility limit fluctuates daily based on the valuation of the securities held in your BMO InvestorLine account. We refer to this as the “buying
power” in your account. With AccountLink service you will be able to
access your buying power in the same way as the cash balance in your
account: write cheques on the buying power in your margin account, use
your AccountLink card to make withdrawals or transfers at eligible ABMs3,
or make point-of-sale purchases.
Eligible Investments for Margins
• Most stocks listed on the Toronto, New York and American exchanges,
and some stocks listed on NASDAQ
• T-Bills
• Most mutual funds
• Bonds and debentures issued directly, or guaranteed, by a Canadian or
U.S. federal, provincial, state or municipal government
• Commercial/corporate bonds and debentures
• REITs
• Exchange Traded Funds
Ineligible Investments for Margins
• Shares listed ONLY on the TSX Venture Exchange
• Unlisted or over-the-counter stocks (e.g., Canadian Dealers’
Network, pink sheets)
• Options
Credit Limit
The credit limit on your line of credit linked to AccountLink service is established based on the market value of the securities in your BMO InvestorLine
account. This credit limit will fluctuate daily. You may verify your credit
limit at any time by accessing your account. When writing cheques on your
account, you need to consider daily fluctuations in your buying power.
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5
ACCOUNTLINK SERVICE
AccountLink® 8 service is a unique feature
included as part of your BMO InvestorLine
investment account. It provides you with all
the advantages of a regular bank account
while conducting investment transactions
all through a single account.
You can settle trades, write cheques, make
debit card purchases and pay bills. Do all
this via BMO Bank of Montreal ABMs and
Interac®* network ABMs. Or, you can bank
online, by telephone or in branch.
Use it to meet everyday financial obligations, take advantage of investment opportunities when they arise and always have
immediate access to the cash in your account. Also, investment earnings are
deposited automatically into your account.
You can also request a U.S. dollar account9 – for U.S. investing – at no
extra charge.
Start using AccountLink service immediately and take advantage of
all the benefits it offers. Or visit our website to learn more.
C O N TA C T U S
Visit our website at bmoinvestorline.com
Call toll free 1 888 776-6886
From outside North America call 1 416 281-5400
Or, email us at [email protected]
Residents of Ontario, Manitoba, Saskatchewan, Alberta,
Yukon, Nunavut, NWT and British Columbia:
Send inquiries to:
BMO InvestorLine Inc.
First Canadian Place,
100 King St. W., 20th floor
Toronto, Ontario M5X 1A1
Send securities by
Priority Post to:
BMO InvestorLine Inc.
First Canadian Place,
100 King St. W., 20th floor
Toronto, Ontario M5X 1A1
Residents of Quebec and Atlantic Canada:
Send inquiries to:
BMO InvestorLine Inc.
2015 Peel Street, 2nd floor
Montreal, Quebec H3A 1T8
Send securities by
Priority Post to:
BMO InvestorLine Inc.
2015 Peel Street, 2nd Floor
Montreal, Quebec H3A 1T8
Experience the BMO InvestorLine Store
Join us for informative seminars featuring a variety of topics, catering to a
number of interests. Come in and talk to BMO InvestorLine Representatives
or other investors like yourself — and experience a whole new investing
environment.
BMO InvestorLine Store - Toronto
First Canadian Place, 100 King St. W.
Concourse Level
Toronto, Ontario M5X 1A1
Email: [email protected]
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1
“Prime Rate” and “U.S. Prime Rate” mean the reference rates of interest
per annum established by the Bank from time to time for Canadian dollar
loans and U.S. dollar loans, respectively, to borrowers in Canada and designated as its Prime Rates.
2
The onus is on the client to prove that he/she is not in a “control block”
position. Clients who own a “control block” of a company, or who are
deemed to be a member of a group that cumulatively holds a “control
block” position in a company, are not eligible to borrow against the underlying shares of that company.
3
Access at ABMs is limited by location availability, and by the daily card or
machine limits. When your buying power is under $2,000, ABM access is
limited to the cash balance in your BMO InvestorLine account.
4
BMO InvestorLine maintains the right to change margin requirements at
anytime without notice.
5
The amount of funds the client must provide.
6
Securities eligible for reduced margin must be included in the S&P/TSX 60
or S&P 500.
7
Margin requirements fluctuate with the market value of the shorted stock.
8
A BMO InvestorLine account with AccountLink service consists of your
regular securities account and a BMO Bank of Montreal Canadian dollar
bank account and, if requested, a U.S. dollar bank account. Cash is
normally held at BMO Bank of Montreal in a bank account except when
temporarily held by BMO InvestorLine Inc. AccountLink service is
governed by the terms and conditions of the BMO InvestorLine Client
Agreement. Registered plans are not eligible for AccountLink service.
9
For U.S. dollar accounts, amounts are quoted in U.S. funds. Balances in
U.S. dollar deposit accounts are not insured deposits as defined by the
Canada Deposit Insurance Corporation Act.
®*Bank of Montreal is a licenced user of the registered trade-mark
owned by Interac Inc.
POCKET
A member of BMO Financial Group.
†
As ranked by The Globe and Mail, 2002, 2003, 2004 & Feb. 5, 2005, by Gómez Canada Q1, Q3 2002 & Q2, Q4 2003 and by Watchfire
GómezPro, Q2 2004. ®Registered trade-marks of Bank of Montreal, used under licence. ™Trade-mark of Bank of Montreal, used under licence.
5128928 (02/05)
BMO InvestorLine Inc. is a wholly owned subsidiary of Bank of Montreal. Member CIPF.