Broker and Brokerage Information Exchange

We have lots (a really lot) of messaging that deals with various brokers and what is allowed/not allowed by them in terms of buying/selling new issues on the Over The Counter (OTC) markets and many other issues.

For instance some brokers allow pretty much any transaction. I personally like eTrade as I have never had a trade rejected by them–while I have an account with Fidelity it restricts my ability to buy Fixed-to-Floating rate issues.

This area is for an exchange of information on all the various brokers–good, bad and otherwise.

Like all the various discussion pages if folks could ‘stay to topic’ the page will be more valuable to all, but staying to point.

If you want to start a new thread go to the bottom of the page and do a comment–instead of a reply.

96 thoughts on “Broker and Brokerage Information Exchange”

  1. Fidelity and the Partial Call on OXLCO : Does anyone know what proper procedure SHOULD be for allotment of called shares on this one? Fidelity allotted for call only 1/3 of the amount of shares I owned prior to the announcement of the call on 2/11. I had none of the shares I bot after 2/11 called. The call notice ( says, “The Shares will be redeemed from each holder of the Shares pro rata based upon the number of outstanding Shares held by such holder.” It does NOT state anything about it being based on the amount of shares owned at any time prior to the call date, so I am thinking Fidelity may have handled this incorrectly… Naturally, they stonewall and say they did it right, period, and will not give me even a name of someone in charge or documentation of why they think this is right. Is anyone here in the same boat either at Fidelity or elsewhere where shares you bot AFTER 2/11 have (or have not) been called as per the 1/3 ratio? I have a call in to IR at Oxford to see what they say.

    1. There is a record date for when the call is effective. (I don’t know what it is since I wasn’t involved) So I’d think fido handled this correctly.

      1. mcg – My point was that there is no record date mentioned in the press release, so why would a shareholder believe there is one at any date right up to the call date? Granted my comparison is for a whole call, not a partial, but today, OCSLL was called. I received proceeds including accrued for shares bot even just 3 days ago…. Why should OXLCO have been treated differently and if for a legitimate reason, how was a shareholder supposed to know based on the documentation announcing the call or any other official document I could find??? Oh, BTW, two calls to IR @ OXLC today went unreturned…. or should I say 2 calls to supposed “IR.”

        1. aThey don’t have to mention it in the press release. The only thing that matters is the “notice of redemption” that the company issues to the depository and agent. the press release is a courtesy notification, not an official document with all the terms and conditions.

          The partial redemption mechanism involves a record date which establishes which shares should be segregated

    2. 1/3 of my shares with Fido were segregated upon call and I don’t think they were tradeable. I’m thinking the shares you bought were part of the 2/3 which were not called, because I don’t think the 1/3 portion were liquid. You get to keep 2/3 of your original holdings and all of the shares you bought after 2/11.

      Am I answering your question?

      1. Bruce – Thanks for the effort, but no. I got 13.5% of the shares I owned called when the pro-rata call was 33%. Statistically, that’s not possible… It does have something to do having no percentage of the shares bot after 2/11 being subject to call according to Fidelity. I am trying to determine whether or not that’s the proper way or if it’s a mistake on Fidelity’s part and if it’s proper, I’m seeking documentation as to why it should be proper as there’s no direction as such in OXLC’s press release regarding the partial call.

  2. Just a heads up that Schwab will no longer let you trade CBKPP (CoBank – Series F). I own 100 shares that were recently purchased through Schwab and tried to enter an order today and it was not accepted. They told me that only qualified institutional buyers would be able to trade going forward. They told me that I’d still be able to hold it in my account.

  3. I snagged some uepeo this morning at 103.35. I think that’s good for a 110 callable.
    But I wondered, vanguard seems to be sometimes letting me place orders without having the cash already in the account. Does anyone know the limitations of this benefit? Td doesn’t let me do that.

    1. Irish, Yes they do up to a certain amount…I dont know the number or percentage because I havent pushed it. I have had 50k out there before. But you have to know ahead of time what you are willing to flip ahead of time, or push cash into account to cover before market close…And dont sell an issue you just bought yesterday as those funds havent cleared. You will get a nasty email, and potential loss of privelage.
      TD, you need to set up a margin account to buy with no cash.

  4. I just wanted to report back that Fidelity accepted my shares of IPWLO and a few of my Canadian holdings from Schwab. I’ll probably proceed with transferring the rest of my illiquid and Canadian holdings to Fidelity. Just so everyone is aware, I believe there is a $50 commission per trade for Canadians with Fidelity. I’m planning to hold my Canadians so I can live with this. I can’t live with the incorrect tax classification thought at Schwab.

    It costs $25 to transfer out of Schwab. Fidelity tell me that they don’t charge to transfer out.

    1. Tex – thanks for the report. Were there any Canadian issues that Fido would not take and if so which one?

      1. I did a smaller batch in to Fido initially. They took everything. I’m planning to do the rest soon. I’ll report back if they reject anything. Based on my conversations with them (take that for what it’s worth), it sounds like they’ll take everything I’ve got.

  5. I just received my Corrected 1099 from Schwab. They changed SLMNP to qualified, but left ALP-Q and EBBNF as non-qualified. I am not really sure how EBBNF should be classified, but it seems like ALP-Q should be qualified. I’ll next see what documentation I can find in the prospectus and send that to them.

    1. My corrected 1099 is now showing IPWLO as qualified. The Canadians are still all jacked up and wrong. I spoke with client advocacy late last week and they were adamant that IPWLO and SLMNP were non-qualified. Investing is hard enough without having to battle this.

  6. I’m not sure if this was already posted but I received a corrected 1099 from Schwab today and SLMNP has been changed from non-QDI to QDI. Yay!

    1. Great news and thanks for the heads up! Just looked at my Feb 21 corrected 1099 and SLMNP was changed to QDI 🙂

      Unfortunately they also “corrected” Enbridge EBBNF to non-qual lol 🙁 Hopefully TNT will set them straight on that.

      Kudos to TNT, Tex and others who have been fighting the good fight on this!

  7. Vanguard agreed to correct NiSource to qualified.

    Schwab just phoned. While I received no confirmation, its issues are being evaluated/discussed. I was promised tomorrow a definitive on the CAN QDI issues.

    1. Thanks for the update TNT! You’re doing God’s work. I’ll keep my fingers crossed that you get a good outcome.

      I was dealing with Schwab’s client advocacy team last week and getting absolutely nowhere. They weren’t open to any of the points I was making. Even when I brought up the fact that the common stock dividends were qualified but the preferred was non-qualified, they shrugged it off. It was incredibly frustrating.

      If there’s any way I can help, please let me know.

    2. TNT – I have four Vanguard accounts holding NiSource and today I got corrected 1099s for all, switching NiSource to QDI.

      Here’s hoping Schwab can figure it out for the Canadian preferred.

  8. I’m going to attempt to transfer some of my OTC holdings out of Schwab due to the QDI classification issues. I’m trying to figure out which broker would be a better alternative for Canadian OTC/illiquid preferreds (SLMNP, IPWLO, etc.). Has anyone had experience holding any of these type of issues through Fidelity? If so, how has the tax reporting been?

    I already have a Fidelity account so that’s why I’m asking about them. I’d be open to others though.

    – TD wouldn’t seem to make sense since Schwab is in the process of acquiriing
    – Vanguard would seem to be off the table since they seem to have an aversion to OTC issues

    I think that leaves me with Ally, Etrade, Interactive Brokers and Fidelity to consider.

    1. Tex – do let us know what you find out.

      But scratch IBKR off the list for OTC as they don’t do OTC. But often an issue that trades OTC can be bought as a bond using a CUSIP. You have to try them one at a time.

    2. Tex, Ally would sell your left elbow if it had a ticker symbol. But they do not allow Canadian reset trades, and all pink sheet buys have to be under 10k per order. But you can call in a bigger order or do multiple sub 10k orders

    3. Fidelity doesn’t allow online trades for floating rate issues. They’re one of the best for what you can do there so you might consider opening two accounts.
      I still have an Etrade account which I don’t trade as much, mostly holds. Nothing wrong with them, maybe a little klunky to navigate their website if you’re used to something else.
      I briefly had an Ally account. Too many glitches with preferred stock trades. Since that’s what I do, I closed the account.

      1. Martin, they are clumsy at best, but outside of not allowing resets or the 10k limit they do a good job of trading anything. And they are somehow good on IPOs. Several times I had to buy there before VG or TD had access yet.
        But very wonky at times. More than once I showed a $0.00 balance and values disappear. I quit worrying as it always straightened out. I called once on it and they said they had back ups that had everything and it was fine. They were proved correct more than once, ha.

        1. I wonder about RBC Dain Rauscher, since they have a Canadian parent. Don’t know if they have online trading, though; everyone must these days?

  9. Schwab Qualified CAN Dividend Issue.

    Spoke today briefly with Orlando management, which third partied in cost basis team. Cost basis team was adamant that Schwab is correct. The Schwab system characterizes dividends through three means: 1. expected status, 2. received status, 3. corporate notification of status.

    The “Paid/Adjusted in 2020 for 2019” reflects Schwabs’ system initially recorded the dividends as qualified. Then corporate notices were received which altered the status to non-qualified.

    I told my Schwab representative, I did not believe the cost basis department had received any such documents. The lady representing cost basis became quite defensive.

    My representative tomorrow will reach out to each of the corporations which I have securities “paid-adjusted” to ask for definitive confirmation that the underlying corporation actually sent to Schwab a notice to change from qualified to non-qualified.

    I hold a few but not the totality mentioned here on the ILL site. Perhaps, all affected parties asking for confirmation from Schwab on the corporation’s notification to change the status of the dividends would be prudent.

    I have incurred damages with Schwab on a totally different matter and negotiations are ongoing. Schwab’s current offer to reimburse, while not what I would wish, I will probably accept. The emotion toil and time is overwhelming dealing with Schwab’s errors. And, they are reimbursing my accounting and legal fees.

    The only reason I was able to get these folks on the phone over the CAN dividend issue is this ongoing matter with Schwab.

    I hope this helps and I will post the results from Schwab when it provides me the documentation.

      1. Justin – the company in question is a REIT and for that reason I agree that the QDI issue is a question mark. Would be the same for a Canadian partnership.

        But Canadian preferred issues are almost 100% corporations, and in those cases it is not a matter of dispute. Schwab may not get it (yet) but in the case of a corporate issuer there is no legitimate question on QDI treatment of common or preferred dividends.

  10. Schwab has mischaracterized DCP’s preferred distributions again this year. DCP is a MLP. Having a MLP preferred distribution characterized as a non-qualified dividend means double taxation of the distribution as it is correctly reported on the K-1 and incorrectly reported on the 1099-div..

    Last year they characterized a DCP-B distribution as a non-qualified dividend on the 1099-div. It took multiple calls to get to a Schwab representative to take this issue seriously. I called DCP investor relations and their legal department so maybe they advised Schwab of their error. Finally Schwab contacted me and confirmed the DCP-B distribution was not a non-qualified dividend, it took them till April 5th to issue a corrected 1099-div.

    This year Schwab has issued a 1099-div with the first quarter DCP-C distribution as a non-qualified dividend while the remaining three quarters distributions are correctly characterized as MLP distributions.

    I am sure this will take multiple calls to get corrected, again.

      1. Ugh–I hate this. I have been with eTrade for 25 years and hate to see that relationship disturbed.

        1. Tim, you may find it beneficial. Morgan Stanley actually underwrites issues, and you may be able to actually get in on the good ones at issue price IPO. I have a friend who has them. He actually got to buy for example all the SR-A he wanted at $25. If memory serves we were getting our first shot at $25.50.

          1. Grid–hope that is the case–I worked for Morgan Stanley in a previous life–not a good experience, but it was many, many years ago.

      2. Ameritrade and Etrade both bite the dust soon after the race to zero commission. Was that the final straw?

        1. and more website problems at Fidelity. support staff budget cuts for the same reason?
          I couldn’t submit trade tickets this morning.

          1. Martin–just submitted the same order 4 times and each time it didn’t take the order and logged me out of the account.

    1. Schwab seems to have more of a problem on characterizing distributions than other brokerages and they seem to dig their heels in on their mistakes.

      I hear a lot of good things about Schwab but this problem needs a long term fix. Not one issue at a time, one investor at a time.

      Nice to know I opened a branch office in Thailand.

    2. My belief is that an MLP distribution is properly non-QDI as there is not normal taxation at the MPL level – it is a pass-through, tax-preferenced investment vehicle like a REIT so the income is taxed as ordinary income for an individual investor.

      1. Distributions from an MLP should not be reported as non-QDI. The dividends are not ordinary income. The distributions are tax free until they are in excess of your tax basis.

  11. I talked to someone in Schwab’s tax team today about EBBNF, SLMNP and ALP-Q being shown as non-qualified on my 1099. The person I talked to said these would only be changed if they receive instructions from the companies to change the classification. He said that EBBNF was originally shown as qualified but they received notice from Enbridge that the dividends should be non-qualified. Could that be right?
    He didn’t seem very familiar with the issue so I will probably try to talk to someone different after I get my corrected 1099 and see if anything is changed..

    1. No, he’s wrong. There are a bunch of people on this board who are raising this issue with Schwab. I find it very difficult to believe that Schwab has received instructions from the issuer to treat the dividends as non-qualified, rather it is a system glitch of some type. Waiting for response to all the information sent in relative to a list of Canadian preferreds qualifying for QDI tax treatment.

  12. My 1099 from Vanguard did not report the NiSource NIPRB dividend as qualified. I have owned it since 11-2018. I called them and they acknowledged the error and agreed to issue a correction. For what it is worth, you may want to check your VG 1099 for a similar issue.

  13. Best brokerage for fixed income investor for execution & cash/dividend management? Currently I have E*trade/Fidelity/Schwab accounts and all of them have something useful but none of them are complete.

    I like E*trade for their income estimator but OTC trades still cost $4.95. Also their link to full banking very useful.

    I like Fidelity for their gov’t cash sweep and free OTC trades. But it has a $50 foreign transaction fee for OTC.

    Is there somewhere better I need to try?

  14. I have accounts at both Vanguard and Etrade and both are IRAs so how they handle QDI is not an issue for me. But for my purposes day to day usability is most important, and I find that Etrade has a faster website (Vanguard webpages always seem to load very slowly) and a much better interface. For example, on the Order page on Etrade, the Bid/Ask is displayed next to each order. On Vanguard it is not, so I have to click on each individual stock on my Order page to get that info and wait for that page to load. Additionally, the stock info and charts on Vanguard is limited and basic. Both standard Etrade and Power Etrade platforms provide much more useful info. Vanguard is in dire need of an update to their platform. That said, Vanguard offers a sweep into their VMFXX money market which typically pays at the high end of the MM range (currently 1.5%) Etrade cannot sweep into a MM so I have to make a manual trade of excess cash into the MM (I am however able to use VMFXX at Etrade) which doesn’t settle until the end of the day. So in order to have cash available for trades I have to keep some cash in their non-interest bearing sweep account.
    This last issue is why I still keep my largest account with Vanguard.

    1. 2Chinooks- I’ve heard Vanguard has the least convenient UI.
      On VMFXX, Fidelity has a 1.5% gov’t sweep SPAXX and is the main reason I migrated retirement accounts to Fidelity. E *trade, I have to just bucket things back and forth between the premium banking account which has a ~1.5 interest only for taxable accounts.

      I’ve also noticed execution prices are slightly better than Fidelity.

  15. For anyone who will be contacting Schwab about QDI classification of Canadians and OTC traded illiquids, I thought the following may be helpful to cite in your discussions/correspondence. Please see the following excerpts from IRS Publication 17 (
    “Qualified Dividends

    Qualified dividends are the ordinary dividends subject to the same 0%, 15%, or 20% maximum tax rate that applies to net capital gain. They should be shown in box 1b of the Form 1099-DIV you receive.
    The maximum rate of tax on qualified dividends is the following.
    • 0% on any amount that otherwise would be taxed at a 10% or 15% rate.
    • 15% on any amount that otherwise would be taxed at rates greater than 15% but less than 37%.
    • 20% on any amount that otherwise would be taxed at a 37% rate.

    To qualify for the maximum rate, all of the following requirements must be met.
    • The dividends must have been paid by a U.S. corporation or a qualified foreign corporation. (See Qualified foreign corporation , later.)
    • The dividends aren’t of the type listed later under Dividends that aren’t qualified dividends , later.
    • You meet the holding period (discussed next).

    Qualified foreign corporation.

    A foreign corporation is a qualified foreign corporation if it meets any of the following conditions.
    1. The corporation is incorporated in a U.S. possession.
    2. The corporation is eligible for the benefits of a comprehensive income tax treaty with the United States that the Department of the Treasury determines is satisfactory for this purpose and that includes an exchange of information program. For a list of those treaties, see Table 8-1.
    3. The corporation doesn’t meet (1) or (2) above, but the stock for which the dividend is paid is readily tradable on an established securities market in the United States. See Readily tradable stock , later.
    Readily tradable stock.

    Any stock (such as common, ordinary, or preferred) or an American depositary receipt in respect of that stock is considered to satisfy requirement 3 under Qualified foreign corporation , earlier, if it is listed on a national securities exchange that is registered under section 6 of the Securities Exchange Act of 1934 or on the Nasdaq Stock Market. For a list of the exchanges that meet these requirements, see”

    Table 8-1 lists Canada as a country that the US has a treaty with.
    “Dividends that aren’t qualified dividends.

    The following dividends aren’t qualified dividends. They aren’t qualified dividends even if they are shown in box 1b of Form 1099-DIV.
    • Capital gain distributions.
    • Dividends paid on deposits with mutual savings banks, cooperative banks, credit unions, U.S. building and loan associations, U.S. savings and loan associations, federal savings and loan associations, and similar financial institutions. (Report these amounts as interest income.)
    • Dividends from a corporation that is a tax-exempt organization or farmer’s cooperative during the corporation’s tax year in which the dividends were paid or during the corporation’s previous tax year.
    • Dividends paid by a corporation on employer securities held on the date of record by an employee stock ownership plan (ESOP) maintained by that corporation.
    • Dividends on any share of stock to the extent you are obligated (whether under a short sale or otherwise) to make related payments for positions in substantially similar or related property.
    • Payments in lieu of dividends, but only if you know or have reason to know the payments aren’t qualified dividends.
    • Payments shown in Form 1099-DIV, box 1b, from a foreign corporation to the extent you know or have reason to know the payments aren’t qualified dividends.”
    To summarize, if you received a dividend from a Canadian preferred stock that is traded OTC (pink or grey), this company should appear to be considered a qualified foreign corporation due to the US/Canada tax treaty. The OTC aspect should be irrelevant due to the US/Canada treaty. If you received a dividend from an illiquid utility stock that is traded OTC (pink or grey), the dividend should be qualified since it is paid by a U.S. corporation.

    Just a word of warning about changing the qualified treatment on your tax return. As most of you already know, your 1099 gets reported to the IRS and they can very easily and automatically compare the 1099 to your 1040 and see that you changed the dividend income to qualified. This can result in a notice or audit. You could receive a notice saying you own additional tax as well as penalties and interest. Is dealing with an IRS notice or audit something that anyone really wants? Would you have to hire representation (attorney/CPA) and how much would that cost?

    I think it makes sense to fight this pretty hard with Schwab and try to get them to issue amended 1099s. At a minimum, they should have to explain how they are arriving at their conclusions that these dividends are non-qualified.

    1. Also, see below for the Internal Revenue Code that defines qualified dividend income. This would be cited as IRC Sec. 1(h)(11). Here is a link:

      (11)Dividends taxed as net capital gain
      (A)In general
      For purposes of this subsection, the term “net capital gain” means net capital gain (determined without regard to this paragraph) increased by qualified dividend income.

      (B)Qualified dividend income
      For purposes of this paragraph—
      (i)In general
      The term “qualified dividend income” means dividends received during the taxable year from—
      (I)domestic corporations, and
      (II)qualified foreign corporations.
      (ii)Certain dividends excluded
      Such term shall not include—
      (I)any dividend from a corporation which for the taxable year of the corporation in which the distribution is made, or the preceding taxable year, is a corporation exempt from tax under section 501 or 521,
      (II)any amount allowed as a deduction under section 591 (relating to deduction for dividends paid by mutual savings banks, etc.), and
      (III)any dividend described in section 404(k).
      (iii)Coordination with section 246(c)Such term shall not include any dividend on any share of stock—
      (I)with respect to which the holding period requirements of section 246(c) are not met (determined by substituting in section 246(c) “60 days” for “45 days” each place it appears and by substituting “121-day period” for “91-day period”), or
      (II)to the extent that the taxpayer is under an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property.

      (C)Qualified foreign corporations
      (i)In general
      Except as otherwise provided in this paragraph, the term “qualified foreign corporation” means any foreign corporation if—
      (I)such corporation is incorporated in a possession of the United States, or
      (II)such corporation is eligible for benefits of a comprehensive income tax treaty with the United States which the Secretary determines is satisfactory for purposes of this paragraph and which includes an exchange of information program.
      (ii)Dividends on stock readily tradable on United States securities market
      A foreign corporation not otherwise treated as a qualified foreign corporation under clause (i) shall be so treated with respect to any dividend paid by such corporation if the stock with respect to which such dividend is paid is readily tradable on an established securities market in the United States.

      (iii)Exclusion of dividends of certain foreign corporations
      Such term shall not include—
      (I)any foreign corporation which for the taxable year of the corporation in which the dividend was paid, or the preceding taxable year, is a passive foreign investment company (as defined in section 1297), and
      (II)any corporation which first becomes a surrogate foreign corporation (as defined in section 7874(a)(2)(B)) after the date of the enactment of this subclause, other than a foreign corporation which is treated as a domestic corporation under section 7874(b).
      (iv)Coordination with foreign tax credit limitation
      Rules similar to the rules of section 904(b)(2)(B) shall apply with respect to the dividend rate differential under this paragraph.

      (D)Special rules
      (i)Amounts taken into account as investment income
      Qualified dividend income shall not include any amount which the taxpayer takes into account as investment income under section 163(d)(4)(B).

      (ii)Extraordinary dividends
      If a taxpayer to whom this section applies receives, with respect to any share of stock, qualified dividend income from 1 or more dividends which are extraordinary dividends (within the meaning of section 1059(c)), any loss on the sale or exchange of such share shall, to the extent of such dividends, be treated as long-term capital loss.

      (iii)Treatment of dividends from regulated investment companies and real estate investment trusts
      A dividend received from a regulated investment company or a real estate investment trust shall be subject to the limitations prescribed in sections 854 and 857.

    2. I emailed Schwab’s CEO previously about another issue I was having. Here is his email address: I received a manager in the client advocacy group a couple days later.

      Here is the contact for a manager at Schwab’s client advocacy team in case anyone would like to reach out and try to get clarification on how they are determining QDI status on illiquids and Canadians. It would be great if you could report back on what you learn:

      I may be reached Monday-Friday at 1-800-468-3774, extension 48768, between the hours of 11:30 AM and 8:00 PM Eastern or; via email me at


      Dawnn Lone
      Resolution Manager | Client Advocacy Team
      1-800-468-3774 / Fax 1-800-977-0122
      211 Main St
      Mail Stop: PHXPEAK
      San Francisco, CA 94105

    3. Bob, you are a 100% correct getting it corrected at the source is the most prudent manner. But if they dont I would correct the error. One could send a note along.
      Your concern is warranted though, but a clarification notice could be sent. Its not the end of the world.
      Each year, the IRS sends millions of notices and letters to taxpayers for a variety of reasons. Here are ten things to know in case one shows up in your mailbox.
      Don’t panic. You often only need to respond to take care of a notice.
      One has the legal right to claim a legal deduction. Remember it works the opposite way also. Brokerage mistakes dont absolve tax payer from their tax obligations either.

  16. Brokers and Cdn preferred based on 2019 1099s and current order entry…

    Vanguard gets the QDI right on the few issues I hold there but will not allow new orders.

    TDA gets the QDI right on the few issues I hold there and will accept new orders on the 3 OTC tickers I tried. 1 without commission and 2 with commission of 6.95.

    Schwab gets the QDI wrong on each of the small number of issues I hold there. They accepted orders on the 3 OTC tickers attempted with zero commission.

    IBKR says they will be releasing the 1099s on Tuesday the 18th. You can buy any issue you like using TSX tickers and orders are executed on the TSX. No OTC orders allowed. CA$1.00 commission per 100 shares traded.

    1. Thank you Bob,
      I haven’t held anything at any broker other than my 401K at TD. I opened a account with Schwab but never funded it. My wife has her 401k at work with T Rowe Price and she received a bonus that is held with Morgan Stanley.
      I have contemplated matching her investment at MS and starting a diversification plan as she is 100% in her company stock

      What has been your experience with IBKR?
      Both Canadian and Australian markets seem heavily weighted to mining / commodities stocks. But with the recent wild fires in Australia, I think building stocks will benefit from the reconstruction.

  17. Been a long time Tim since I was here, loved your dividend Hunter.
    Here is my question on brokers. You have the Canadian forum here and in the past I have been interested in and invested in stocks there but my broker TD withheld 15% on dividends, yet in talking to another person over on SA ( Bea baggage ) she said her broker did not. So with the exchange rate and withholding ( which I know you can file to have returned ) didn’t seem worth it.
    Anyone here have any thoughts on this ? A different broker etc.
    This also may apply to Australian stocks.

    1. Charles, the only way 15% was not being withheld is the scenario that person had the issues in a tax free account. And even then some of the brokerages botched that up also. And sometimes it was an issue by issue case.

        1. Charles, My TD experiences in tax free was pink sheet CAD resets had no withholding and the grey issues did, so I jettisoned them. An on line friend raised cane on a grey market ERRAF and finally got it fixed correctly though.

      1. That is also a broker by broker thing, where some broker’s make the election for no withholding for some if not all of the retirement accounts on their books, and some don’t offer that service, or whether they charge a fee for this or what the criteria is, I don’t know.

  18. I used Fidelity at one time but they were too restrictive. After numerous phone calls they did not change. I switched everything over to Schwab and things are going smoother. As I understand and I can’t verify Interactive Brokers will let you trade anything as long as it has a symbol.

    1. IB won’t let you trade gray sheet OTC stocks, and they have limited certain other OTC stocks from being traded based on if they have any of OTC markets negative flags.

  19. I posted this elsewhere before I saw this new topic page. Schwab showed SLMNP, EBBNF and ALP-Q as non qualified on my 1099. All were held 6-12 months so holding time was not an issue. I plan to call them the first of the week.

    1. These errors are not caused by Schwab (or even by their 3rd party provider, Wall Street Concepts), but by late reporting from the dividend issuers. I suggest waiting through at least the first 2 1099 correction cycles and seeing if the problems are fixed before calling.

      1. David – How does that jibe with the problem only being reported by Schwab customers but not others???

        1. 2whiteroses – I don’t think your premise is correct (unless you are talking about Canadian issues, which I know nothing about).

          I happened to move a number of dividend paying issues from Schwab to TD Ameritrade during 2018, so I got to make a comparison last tax season. Both brokerages took several cycles to get the 1099s correct. TDA was faster to get the corrections out, but Schwab was much easier to work with to get the last few issues fixed. In no case were the problems due to the brokerages, it was always the issuers being tardy.

          There were a couple of cases where I had to contact the IR department of the issuer to get them to push out corrections to the brokerages. I hope I don’t have to go that far this year.

          1. BTW – QDI is easy – what you really have to scrutinize is the 199A reporting. I expect they will master that about the same time as the deduction expires.

      2. Absolutely wrong. It is 100% Schwab’s mistake.

        They may fix it, but they won’t do so without the hammer of complaints coming down on them.

        You can just wait if you will, but when the corrected 1099 comes out it will be as a result of the effort of others. Not just fate.

        I am naked in expressing my desire for others to take up the fight, so I won’t have to. I do enough for the cause as it is and am hoping others will do some heavy lifting here.

        Regards from the Lying, Dog-faced Pony Soldier state of Delaware

        1. I got no dog in this fight. I left them several years ago for ongoing problems I couldn’t get resolved.

          But next year I likely will when those goombas take me over again.

          Hang in. Meetcha at the crossroads.


    2. That is what I was thinking, 2WR. That cannot be accurate otherwise SLMNP wouldnt have been accurate for me and not others with Charles.

      1. I don’t think its SLMNP the older issues the dividend are being rep[orted as non qualified. Like IBWLK , I have the same problem.

        1. Max – Just to be clear, are you saying that Schwab reported your dividends from IBWLK as non-qualified on your 2019 1099? Did you own this security through Schwab in prior years? Was it reported as non-qualified in the past as well?

            1. IPWLK is clearly QDI. The prospectus even lays it out. Now granted it was issued when qualified tax breaks had a different calculation, but it is still qualified. IPL had a very profitable year, so its qualified.

  20. As I and others have posted, Fido restricts online purchase of F-F preferreds and baby bonds (but apparently not until they’ve been available for a week or 3 !?), yet allows online margin purchase of penny stocks, bankrupt stocks, preferreds which have suspended dividends, etc. I recently emailed my “private client” rep, who forwarded this on to the bond folks, who are supposedly looking into this. He says a lot of this stems from problems with pricing during the Great Recession. I also told him, FWIW, that unless this changes, I’ll roll over some of my retirement accounts into another brokerage IRA instead of theirs. For now, it’s wait and see.

  21. With regard to QDI treatment for illiquids and Canadian OTCs, perhaps it would be helpful to create a shared spreadsheet or something for people to report their holdings, broker, and what got reported on the 1099. I think having this info available for all to see could be really beneficial.

    1. Tex, I have been fortunate to not have to deal with ill guided brokerages concerning C Corp tax treatment on QDI dividends. Its really very simple for most. If preferred basically is not a Reit or an MLP, (foreign qualified with tax treaty is eligible also) it should be qualified. Provided the holding period is met and the dividends are being paid from earnings, or retained earnings.
      But garbage input equals garbage outputs concerning what they enter in the computers that spit out the incorrect tax info.

    2. Tex, I just received Vanguard tax form today. All were qualified there also. You name it no matter what brokerage I had be it TD, Vanguard, or Ally, they all were assigned QDI. This includes all Canadian resets, and grey issues like IPWLO, and Odd ducks like SLMNP.

  22. I am glad to see the new brokerage thread active. One can only accomplish so much by doing Google searches and the brokerage websites are hardly unbiased.

    The free, unfettered exchange of information re: brokerage costs and practices can be of great value to us all.

    Hope you all will contribute in that spirit. The good and the bad.

  23. I offer a random guess that with the elimination of trade commissions, VG and others are reducing costs where possible. I speculate there might be an associated cost with various OTC securities that VG would have to pay. Maybe they just want to skip the market for thinly traded issues. I really doubt any investor could sue their brokerage firm “because they didn’t tell them” an OTC security was risky.

    1. Jeff, that is the real reason. They didnt want to go free as they delayed. Then they saw these illiquid trades costing them dough. That is why TD charges for pink sheets. and I am fine with that.

    2. It’s actually worse than that for them. Exchanges pay for order flow, which is why your trades can now be free (never mind those that pay the most allow you to be front run consistently). If you don’t fit brokers’ model of selling liquidity, it will be harder to get service.

  24. All this stuff going on with Vanguard on this subject and Schwab on treatment of QDI sure doesn’t make me look forward to the day when Schwab/TDA happens…

    1. Excellent point and I share your concern.

      Will they keep both brokerage platforms and if not what will the new one look like? If they reduce to one I’d guess it would be Schwab.

      1. Schwab has made comments that strongly suggest they are going to keep their platform and not TDAs. I think they would rather not support ThinkOrSwim, a great trading platform that lots of people like at TDA, and they may end up keeping that if they get enough complaints / feedback. But I would certainly expect a lot of the rest to work more like Schwab than TDA

        1. I guarantee if Schwab elects not to keep TOS and this other b/s continues, it will surely open the door for me to explore alternatives… I have TDA and Fidelity now, but have not looked elsewhere beyond eTrade where I had a small account that I folded into Fidelity for some unremembered reason.

          And as far as Vanguard no longer accepting purchase orders in the four lowest tiers of the Over-The-Counter (OTC) market, you would think that Vanguard account protesters ought to be able to recruit support from many of the companies affected as well to mount a rally against this…. They are going to be hurt as well due to the implementation of this.

          1. 2Whiteroses
            It has been my experience during the very few times I contacted Canadian companies about setting up a U.S. otc symbol that they do not care because they themselves have nothing to do with setting up or being responsible for the symbols. It is done by the market makers. In fact, usually the Canadian companies did not even know the symbols exist. Things may have changed though.

  25. I dont know why Vanguard is so worried about THEIR exposure to pink sheets. They sure had no problem ripping $5,000 right out of my pocket when they sold me 1000 shares of EBBGF at $15 when it was trading at $20. They came back and disallowed trade 2 days later. But if I had screwed up and sold at $15 think they would have cancelled that trade? Ha, bet no.

    1. Vanguard has been tightening the thumb screws progressively for at least the last 3 years.

      Cobank was OK, then it wasn’t.

      Canadians were OK, then they weren’t.

      Now it’s the Pinks and the Greys.

      I’m feeling a bit like Friedrich Niemöller.

  26. NOTE–this starts off some comments. This was posted by a number of folks relative to Vanguard.

    This may be of great interest to many here:
    As a valued Vanguard client who has either traded or held securities
    included in the four lowest tiers of the Over-The-Counter (OTC) market, I
    want to alert you to a change in the way Vanguard will be handling these
    types of low-tier securities going forward.

    Effective March 4th, 2020, Vanguard will no longer accept purchases for
    securities in the following Over-The-Counter market tiers as designated by
    the OTC Markets Group ( The market tiers include Pink
    Limited information®, Pink No-Information®, Grey Market, Expert Market or
    securities designated with the status of Caveat Emptor (buyer beware).

    As you may know, the securities included in these market tiers tend to
    provide limited to no financial information, and in some cases, provide
    limited to no pricing information to the public. As a result of these
    factors, these securities can be more susceptible to potential fraud and
    manipulation in the market place, potentially exposing both our clients and
    Vanguard to increased levels of risk.

    Vanguard is committed to giving our clients the best chance at investment
    success. We believe this action is necessary to enable us to live up to
    that philosophy.

    If you already own a security which is included in one of the Over the
    Counter market tiers listed above, you can continue to hold this security
    or sell the security in your Vanguard account, however, additional
    purchases will not be accepted to add to your existing position.

    Additional information related to the characteristics of these market tiers
    can be obtained through the OTC Markets Group ( If you
    have any further questions, please feel free to contact us at 800-992-8327
    Monday through Friday from 8 a.m. to 8 p.m., Eastern Time.


    Brent Briney
    Registered Representative
    Vanguard Brokerage Services

    Vanguard Marketing Corporation, Distributor of the Vanguard funds
    Vanguard Brokerage Services is a division of Vanguard Marketing
    Corporation, Member FINRA(C) 2015 The Vanguard Group, Inc. All rights

    Posted on 02/07/2020 2:21 p.m.

    1. I got that phone call from Vanguard and gave them a piece of my mind about it. It was clear that their restriction wasn’t at all due to the state reasons (“possible fraud / higher risk” in OTC stocks), but that they were getting regulatory pressure, presumably from the SEC or FINRA to stop facilitating OTC trades. Why those guys care about small OTC stocks and not certain popular tweeters’ securities fraud (“$420 funding secured”) must come down to some politics I’m not privy to.

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