Canadian Depositary Receipts (CDRs)

xgbsSS wrote: ↑ Interesting. The real value of this would be if CIBC had targeted non-North American stocks though that are hard to access. Of course they will probably get more draw as people will buy based on convenience a lot of the time.

Capt. wrote: ↑ Interesting concept. Thanks for the share @MrMom. I hadn't heard of the new CDRs until this thread.



That's what I was wondering about too. Will they expand to non-North American stocks? I would think that area has more growth potential than companies that are US listed.

KyleTO wrote: ↑ No idea at all how much of a hidden fee we'd pay with the hedging. I'm not a fan.

Gingercookie wrote: ↑ Why buy an Amazon CDR when you can buy the real version just as easily?

Per FinancialPost, "Trading volume on the Amazon CDRs was modest on the first day, with 9,668 shares exchanged as of 1 p.m. in Toronto. The price at that time was $22.62; each CDR represents 0.005 of a share of Amazon, which was trading at US$3,604.65 in New York."

So 9,668 shares X $22.62 = $218,600CAD worth of modest trading on the 1st day???

Which translates to $218,600CAD/1.24FX = $176,200USD/$3604.65USD = 48 real AMZN shares traded on the 1st day????

Instead of creating all these gimmicks, maybe CIBC should have spent those three years focusing on improving their archaic trading platform.

xgbsSS wrote: ↑ Hedging over the years has become extremely cheap to offer. If you noticed the expense ratio of hedged vs unhedged ETFs are minimal if not nil in some cases.

HammerRFDer wrote: ↑ Hedging can be cheap, but is it still cheap if they take the rack rate/list price at CIBC?

xgbsSS wrote: ↑ Not sure what you are getting at.
Fees have to be clearly denoted by the terms and offering published. In order for us to judge the pricing of the hedging, we'll have to see how much CIBC charges on the CDR. Even if the hedging itself is cheap, we have no clue at this time the cost without looking at the Offering docs. I haven't looked at SEDAR yet, too busy and limited internet here in Rankin Inlet

HammerRFDer wrote: ↑ That’s the thing, it’s not a fee if they give the business to their own hedging desk and the hedging desk makes the profit.

It’s like lawyers charging $1/page for photocopies. They *are* making money off of that.

I wish they would have to clearly spell out the costs, but they’ll only have to mention that they “may” (lol) earn a profit and that’s that.

Here’s what Brookfield said in their privatization for BPY:

“Currency Disclaimer: If the payment is denominated in a currency other than that specified by your account at the time instructions are given, we will convert the payment at our then prevailing exchange rate and credit you in the currency of that account. We and/or parties related to us may earn revenue from such transactions.”

What’s your excuse for not checking SEDAR? It was made for 486s with 28.8 connections.

MrMom wrote: ↑ CM PR

CIBC launches industry-first Canadian Depositary Receipts ("CDRs") on the NEO Exchange
Jul 26, 2021, 05:00 ET

https://www.newswire.ca/news-releases/c ... 37504.html

The first CDRs that will be available for trading on the NEO Exchange are listed below, with many more planned for the future:

• Alphabet Canadian Depositary Receipts (CAD Hedged) – GOOG
• Amazon.com Canadian Depositary Receipts (CAD Hedged) – AMZN
• Apple Canadian Depositary Receipts (CAD Hedged) – AAPL
• Netflix Canadian Depositary Receipts (CAD Hedged) – NFLX
• Tesla Canadian Depositary Receipts (CAD Hedged) – TSLA

CM & NEO url's for further information

• https://cdr.cibc.com/
• https://www.neo.inc/en/services/raising ... y-receipts

Globe and Mail article

CIBC launches depositary receipts for shares in U.S. companies on Canada’s Neo Exchange
PUBLISHED JULY 26, 2021
UPDATED 2 HOURS AGO

https://www.theglobeandmail.com/busines ... res-of-us/

Excerpts;

CIBC’s first batch of Canadian depositary receipts (CDRs) will be tied to Amazon.com Inc.’s stock and is expected to start trading on Tuesday on the Neo Exchange. The CDRs are modelled after U.S. depositary receipts (ADRs), a trillion-dollar market that has existed for decades south of the border as an alternative way to access foreign companies’ stocks, but which had no direct equivalent in Canada.

It took CIBC three years to develop and launch CDRs, with a team that included traders, engineers and a lawyer. The bank also had to get approval from the Ontario Securities Commission. And it chose the relatively young Neo Exchange as its listing partner for its experience in the exchange-traded fund market and its reputation as fast-moving and open to new ideas, Mr. Scherer said.

The CDRs will initially be priced at $20 each, which would allow a customer to effectively own a small slice of a share in Amazon.com, which cost US$3,656.64 as of the market close on Friday.

Before long, CIBC plans to introduce CDRs tied to Alphabet Inc., the parent company of Google, as well as Apple Inc., Netflix Inc. and Tesla Inc . Over the coming months, the bank is set to expand its CDR listings to include other prominent S&P 500 companies.

The CDRs trade in Canadian dollars, and CIBC adjusts the ratio of depositary receipts to company shares daily to account for changes in currency values. The bank charges no management fees for CDRs, but earns small fees from the foreign exchange transactions it makes in the background to manage the currency hedge for investors. The maximum spread between rates that CIBC can collect from those transactions is capped at 60 basis points on an annualized basis. CIBC Mellon will act as the custodian bank.

“I think you have to be realistic. When someone comes with a good and unique idea, competition is going to follow,” Mr. Schmitt said.