CIBC Mellon announced today that it is Canada’s first transfer agent to offer a cost-effective shareholder-paid dividend reinvestment plan (DRIP) program to its clients.

“Dividend reinvestment plans are widely recognized in North America as being a simple and easy way to purchase shares, helping shareholders increase their stock holdings over time,” said David Linds, senior vice president, business development and client relationship management at CIBC Mellon. “Previously, the ongoing expense to issuers to administer these plans could be a deterrent to an issuer looking to offer a DRIP. CIBC Mellon’s DRIP program includes shareholder-paid per transaction fees, allowing issuers a cost-effective opportunity to offer DRIPs to their broad shareholder base.”

Earlier this year, Manulife Financial launched a DRIP program to their shareholders through CIBC Mellon. The program’s low, per transaction shareholder-paid fees are similar to those paid by shareholders participating in user-pay direct purchase plans (DPPs) and DRIP programs in the U.S.

With the current regulatory environment, Canadian issuers can only offer DPPs in two provinces. DRIP programs can be offered across the country without limitation, and CIBC Mellon’s DRIP program’s pricing structure makes the programs more feasible for issuers; increasing accessibility of the program to shareholders.