Our Dividend Reinvestment Program (“the Program”) provides a no-fee, no-commission reinvestment program that allows you to reinvest dividend, capital gain, and other eligible 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 or Vanguard Cash Plus Account, as applicable, in additional shares of the same Securities. The Program is available for all Vanguard Brokerage Accounts and Vanguard Cash Plus Accounts except those that are subject to either backup or nonresident alien income tax withholding.
When you choose to reinvest dividends for an eligible Security, Vanguard Brokerage Services (“VBS”) combines the cash distributions from all participating clients and purchases additional shares of that same Security in the open market. These new shares are then allocated proportionately to participating accounts.
You may update or cancel your dividend reinvestment instructions at any time by going online, calling VBS, sending a secure email, or sending a written request. To ensure changes apply to an upcoming distribution, instructions must be received at least two business days before the payable date. VBS provides an applicable tax information statement after year-end with the regular tax filing schedule.
Eligibility Requirements
Not all Securities qualify for dividend reinvestment. Eligibility for the Program is based on the following:
- The Security must be held in street name by VBS, pay a dividend, and have an adequate trading volume.
- The Security must not be otherwise restricted by policy, or involved in certain corporate actions (e.g., mergers or reorganizations).
- Some Security types—such as Unit Investment Trusts (“UITs”), certain foreign or domestic equities, and select American Depository Receipts (“ADRs”)—may be excluded.
- Eligibility requirements for mutual funds are determined by each fund; review the fund profile on our website.
VBS reserves the right to modify or discontinue the Program, remove Securities from the program, change eligibility standards, or restrict participation at any time, consistent with the Vanguard Brokerage Account Agreement, without notification to you.
Program Limitations and Restrictions
- In rare cases, technological, operational, other limitations, or market conditions may prevent reinvestment.
- VBS may place restrictions on your account or specific Securities as permitted under the Vanguard Brokerage Account Agreement. You must comply with all Program-related policies and guidelines.
- Fractional Shares created through the Program will appear on your account statement and are rounded to 3 (three) decimal places. In certain cases, fractional entitlements may be paid in cash.
Note: If you are an “affiliate” or “insider,” you should consider consulting with your personal legal advisor before enrolling in the Program.