|CIBC's special management fee rebate offer to index fund clients with more than $150,000 to invest|
update Following industry practice, quoted MERs now include GST, so an MER that used to be 90 bp is now 96 bp and a 60 bp rebate is now 64 bp, etc.
update Starting with the period from 01Mar01 to 30Jun01, CIBC have started to pay quarterly MER rebates to investors who hold a total of at least $150k in CIBC index funds in multiple accounts even though individual accounts may have less than $150k, e.g. $100k in one account and $75k in another.
Moreover, the accounts can be a combination of taxable, RRSP, individual, joint, etc. since it seems that they match using Social Insurance Number (SIN.) The accounts can even be held at different institutions.
Dear CIBC Investor:
CIBC has introduced management fee rebates to index fund investors with balances over $150,000. The rebates will be calculated daily and paid quarterly to investor's accounts beginning January 4, 1999.
The rebate calculation is based on the closing market value of the eligible index funds within an account multiplied by the daily rebate factor for the account dollar range as listed below:
Note: Rebates include applicable sales tax
At the end of each quarterly period, the sum of the daily rebate amounts within the period, will be paid to the investor's account through a special income distribution of additional units to the fund(s) earning the rebate.
It is important to note that rebates will be considered income to non-registered account holders and will be reported on their Statement of Trust Income and T3 tax slip1.
CIBC Securities Inc. reserves the right to discontinue this offer at any time.
The CIBC family of index funds which are eligible for the management fee rebate includes3:
The CIBC 5-Year Protected Mutual Funds are not available for the management fee rebate.
As an example, an investor with an average of $200,000 in index funds within an account for 90 days, might expect to receive a management fee rebate in the amount $295.2
CIBC offers the broadest selection of index funds in Canada with nine funds. CIBC is also the only provider in Canada of a no-cost asset allocation program that allows investors to choose from seven distinct index fund investment portfolios.
1. From CIBC's mutual funds prospectus dated 09Aug02:
In general, if you hold units of a Fund outside of a registered plan, you must include in your income for a taxation year the portion of the net income and the taxable portion of the net realized capital gains that is paid or becomes payable to you in the year, even though these amounts may be reinvested in additional units of the Fund. Distributions from a Fund, including distributions as a result of management fee rebates, may be characterized as dividend income, ordinary income, capital gains or a return of capital. Each type of distribution is taxed differently.
2. For illustrative purposes only. The actual rebated amount is the sum of the daily rebate amounts as calculated by the daily rebate factor multiplied by closing market value of the eligible index funds within an account.
3. Plus all the other index funds that have been introduced since the original announcement, e.g. Asia Pacific, Emerging Markets.
Original announcement received from CIBC Securities Inc., March 1999