TD Bank 2010 Annual Report Download - page 143

TD BANK GROUP ANNUAL REPORT 2010 FINANCIAL RESULTS 141
A description of significant transactions of the Bank and its affiliates
with TD Ameritrade is set forth below.
Insured Deposit Account (formerly known as Money Market
Deposit Account) Agreement
The Bank is party to an insured deposit account (IDA) agreement with
TD Ameritrade, pursuant to which the Bank makes available to clients
of TD Ameritrade IDAs as designated sweep vehicles. TD Ameritrade
provides marketing and support services with respect to the IDA. The
Bank paid fees of $713.5 million in 2010 (2009 – $653.7 million; 2008
– $657.0 million) to TD Ameritrade for the deposit accounts. The fee
paid by the Bank is based on the average insured deposit balance of
$39.2 billion in 2010 (2009 – $22.0 billion) with a portion of the fee
tied to the actual yield earned by the Bank on the investments, less the
actual interest paid to clients of TD Ameritrade, with the balance based
on an agreed rate of return. The Bank earns a flat fee of 25 basis
points and is reimbursed for the cost of FDIC insurance premiums.
As at October 31, 2010, amounts receivable from TD Ameritrade were
$52.9 million (2009 – $39.8 million). As at October 31, 2010, amounts
payable to TD Ameritrade were $81.9 million (2009 – $73.8 million).
SYMCOR
The Bank has a one-third ownership in Symcor Inc. (Symcor), a North
American provider of business process outsourcing services for the
financial services industry, including cheque and payment processing,
statement production and document management. The Bank accounts
for Symcor’s results using the equity method of accounting. During
the year, the Bank paid $133.7 million (2009 – $134.7 million;
2008 – $164.0 million) for these services. As at October 31, 2010, the
amount payable to Symcor was $12.7 million (2009 – $12.3 million).
TRANSACTIONS WITH OFFICERS AND DIRECTORS
AND THEIR AFFILIATES
The Bank makes loans to its officers and directors and their affiliates.
Loans to directors and officers are on market terms and conditions
unless, in the case of banking products and services for officers,
otherwise stipulated under approved policy guidelines that govern
all employees. The amounts outstanding are as follows:
Loans to Officers and Directors and their Associates
(millions of Canadian dollars) 2010 2009
Personal loans, including mortgages $ 11 $ 9
Business loans 182 175
Total $ 193 $ 184
In addition, the Bank offers deferred share and other plans to
non-employee directors, executives and certain other key employees.
See Note 23 for more details.
In the ordinary course of business, the Bank also provides various
banking services to associated and other related corporations on terms
similar to those offered to non-related parties.
TRANSACTIONS WITH EQUITY-ACCOUNTED INVESTEES
TD AMERITRADE
Pursuant to a Stockholders Agreement in relation to the Bank’s equity
investment in TD Ameritrade, the Bank designated five of twelve
members of TD Ameritrade’s Board of Directors. Three of the five
TD-designated directors currently include our CEO, our former Group
Head Wealth Management and an independent director of TD.
RELATED-PARTY TRANSACTIONS
NOTE 34
The risk management policies and procedures of the Bank are provided
in the MD&A. The shaded sections of the Managing Risk section of the
MD&A, relating to credit, market and liquidity risks are an integral part
of the 2010 Consolidated Financial Statements.
MEDIUM TERM NOTES
On November 2, 2010, the Bank issued $1 billion of medium term
notes constituting subordinated indebtedness pursuant to its medium
term note program. For further details, see Note 14.
On November 29, 2010, the Bank announced its intention to redeem
on January 18, 2011 all its outstanding 4.317% medium term notes
due January 18, 2016.
RISK MANAGEMENT
NOTE 35
SUBSEQUENT EVENTS
NOTE 36