If you chose this option when you completed your application for a Vanguard Brokerage Account, the following terms apply. If you have not requested this service, you can set it up by calling us at 800-992-8327 Monday through Friday from 8 a.m. to 8 p.m., Eastern time, or by accessing your account on vanguard.com. Note: If you are an "affiliate" or "insider," you should consider consulting with your personal legal adviser before enrolling in this program.
This no-fee, no-commission reinvestment program allows you to reinvest dividend and/or capital gains distributions from any or all eligible stocks, closed-end mutual funds, exchange-traded funds (ETFs), FundAccess® funds, or Vanguard mutual funds in your Vanguard Brokerage Account in additional shares of the same securities. All eligible distributions paid by the securities you designate must be reinvested. The program is provided through Vanguard Brokerage. The dividend reinvestment program is available for all Vanguard Brokerage Accounts except those that are subject to either backup or nonresident alien income tax withholding. To modify or cancel any or all of your reinvestment instructions at any time, notify us by letter, secure email, or telephone. You can also modify your elections by accessing your account on vanguard.com. To change dividend elections, we must receive the instructions at least two business days before the payable date for the changes to be effective with that distribution. Changes received after that time will be processed on a best-efforts basis.
To be eligible for the program, securities must be held in "street name" by Vanguard Brokerage Services® prior to the stock's record date. Under street-name registration, the securities are owned by the brokerage customer but are registered in a brokerage's or clearing agent's name for easy transfer and protection against loss or theft. Virtually all the stocks, closed-end mutual funds, and ETFs you hold through your account are held in street name. Note the following eligibility characteristics:
When reinvesting dividends, Vanguard Brokerage Services combines the cash distributions from the accounts of all clients who have requested reinvestment in the same security, and then uses that combined total to purchase additional shares of the security in the open market. Vanguard Brokerage will attempt to purchase the reinvestment shares on the payable date. The new shares are divided proportionately among the clients' accounts, in whole and fractional shares rounded to three decimal places. If the total purchase can't be completed in one trade, clients will receive shares purchased at the weighted average price paid by Vanguard Brokerage Services.
You can view the dividend reinvestment status of the securities in your account online at vanguard.com or in the Holdings section of your regular Vanguard Brokerage statement. Reinvestment transactions will be reported in the Activity section on your regular brokerage statement. A line entry will show the total amount of the dividend payment; a separate line entry will report the number of shares purchased and the purchase price per share. You will not receive an interim confirmation. You can access updated account information after the dividend payable date at vanguard.com, via AutoBroker® (our automated telephone system), or by calling a brokerage associate. Note: If your brokerage account can hold Vanguard mutual funds, Tele-Account® (our automated phone service for Vanguard mutual fund owners) and AutoBroker are not available to you.
If you sell the entire position two days or more before the dividend-payable date, your distribution will be paid in cash. If, however, you sell an entire position within the two-day time frame of the security's payable date, the dividend may be reinvested, resulting in additional shares. Selling these subsequent shares will require another sell order, which will incur additional commission charges. Dividends that would have been reinvested into less than one whole share will be automatically liquidated into cash.
*Unit Investment Trusts (UITs) have specific indicators that specify whether they are reinvest units or cash units based upon their security identifier (CUSIP). If you transfer in a UIT that has a reinvest identifier then you will receive more units of that UIT on the payable date of the dividend instead of cash into your settlement fund.