Dividend Reinvestment Plan Terms
Last Updated on October 30, 2022
BlockTrans Syndicate ("Block Transfer," “we,” “our,” “us”) is not a registered broker-dealer. As such, we cannot effect securities reinvestments on your behalf. When you receive a dividend, you will get a notification to open our app and purchase new shares using your proceeds. This private sale executes against existing liquidity in the Stellar Decentralized Exchange ("SDEX"). You consent that these purchases will execute automatically using your local account certificate the next time you open the app, and you grant your express written affidavit that you are initiating and effecting each such purchase willingly and on your own behalf when your access device submits a reinvestment order. You are still responsible for the tax burden of dividend income and any tax consequences for later sale of shares bought with dividend proceeds.

If you chose to match any part of a company's dividend, we will increase the amount of the automatic purchase transaction by the percentage specified by you, the difference paid for with excess cash in your account. If you opt for any dividend matching but do not have enough cash in your account at the time of dividend reinvestment to cover the increased dividend match percentage in its entirety, then we will just set the order to reinvest the amount of the dividend. We will not adjust dividend reinvestment amounts for any potential dividend income taxes you likely must pay at the end of the year.

The risk factors in our Terms of Service apply to dividends reinvested through the SDEX, particularly that prices may differ than those available on an NMS venue. We cannot be held liable for differences in reinvestment execution price between the SDEX and an NMS venue. 

However, we will minimize this risk by asking clients to post sale offers from their treasury or registered employee benefit plan accounts sufficient to cover expected reinvestment purchases at the volume-weighted average daily price of the shares on the day of dividend distribution, according to the applicable NMS SIP.

Tax treatment
The following is a summary of certain U.S. federal income tax consequences regarding dividend reinvestment. This summary is based on current law and may be affected by future legislation, Internal Revenue Service rulings and other administrative pronouncements, income tax regulations and court decisions. This discussion does not purport to deal with all aspects of taxation that may be relevant to you in light of your circumstances, or if you are a type of investor who is subject to special treatment under U.S. federal income tax law (including, without limitation, insurance companies, partnerships, tax-exempt organizations, financial institutions, broker dealers, foreign corporations and persons who are not citizens or residents of the United States). YOU SHOULD CONSULT WITH YOUR OWN TAX ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES (INCLUDING THE FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES) OF PARTICIPATING IN THE PLAN, AND OF POTENTIAL CHANGES IN APPLICABLE TAX LAWS.

In general, the amount of cash dividends paid by our issuers will be includable in your income even though reinvested. When your dividends are reinvested to acquire shares (including any fractional share) from an issuer, you will be treated as having received on the dividend payment date a taxable dividend in an amount equal to the fair market value of such stock purchased. When your dividends are reinvested to acquire shares (including any fractional share) purchased in market transactions, you will be treated as having received a taxable dividend equal to the amount of cash dividends used to make those purchases.

If you make optional matching investments, you may be treated as having received an additional dividend distribution equal to the excess, if any, of the fair market value of the shares acquired through a DSPP (future feature coming soon) on the matchind date over the amount of your matching investment.

The Internal Revenue Service has issued private letter rulings on dividend reinvestment plans which ruled that shareholders making optional investments will not be treated as having received such dividend income if the shareholders are not also participants in the dividend reinvestment aspect of the plan. Private letter rulings are not precedent and may not be relied upon by persons other than the taxpayers to which they are issued.

We will report to you for tax purposes the dividends to be credited to your account. Such information will also be furnished to the Internal Revenue Service to the extent required by law.

The tax basis of shares acquired through the reinvestment of dividends will generally equal the amount of distributions you are treated as receiving, as described above. The tax basis of shares purchased with matching investments will be equal to the amount of those investments increased by the amount of any additional dividend that you are treated as having received as a result of a waiver discount (if issuer offers DSPP discount). The holding period for shares acquired (including any fractional share) generally will begin on the date on which the shares are purchased and credited to your account. Stock acquired at different times will have different holding periods.

Upon the sale of either a portion or all of your shares, you may recognize a capital gain or loss based on the difference between the sales proceeds and the tax basis in the shares sold, including any fractional share. Such capital gain or loss will be long-term capital gain or loss if your holding period for your shares or fractional share exceeded the Internal Revenue Code’s applicable period (currently one year) at the time of disposition.

If you are subject to withholding taxes, we will withhold the required taxes from the gross dividends and from the proceeds from the sale of shares. The dividends and proceeds received by you, or dividends reinvested on your behalf, will be net of the required taxes.

Block Transfer reserves the right to update and change, from time to time, these DRIP Terms and all documents incorporated by reference by posting updates and/or changes to our Website. It is your responsibility to check this page periodically for changes. You can find the most recent version of these DRIP Terms at https://www.blocktransfer.io/drip-terms. Use of our platform after such changes constitutes acceptance of such changes. Any new features or tools which are added to the current platform shall also be subject to the DRIP Terms.