I’m not sure if Degiro is correct in their decision and their interpretation of applicable law. But they surely think that they had do impose that restriction.
This is another example what I dislike in the European Union so much, and why I hope Switzerland is never going to join. There’s all this talk about common market, free movement of people, blablabla. On the one hand, they’re removing these hurdles to enable companies to base themselves in favourable jurisdictions and conduct their business cross-border. On the other hand, they’re instituting requirements that require so much regulation and red tape that ultimately end up costing ordinary consumers.
These KIID regulations (that were brought about by the EU) do not only run contrary to the principle of free movement of people, goods and services. They also cause service providers to institute what is effectively geo-blocking (based on a consumer’s residence) - something the EU themselves claims to be fighting.
The irony is that it doesn’t reliably serve its purpose of ensuring the information of investors.
Not only can a customer in Greece or Czechia perfectly understand English. Even a German or French investor can move to Greece or Czechia - despite speaking not a single work of Greek or Czech. And still be cut off from access to the funds he has been investing in in his home country. Though KIID documents may have been translated into his mother tongue for the DE/FR market.
I have exactly the same behavior on CornerTrader, actually less the email. One of those days I continued buying VOO only to get a message about missing KID, preventing me from purchasing….
No info so far
Indeed, the interpretation of applicable law is questionable for Swiss-based customers of degiro.ch. Different regulations apply here (FIDLEG/FinSA et al.). Seems like Degiro has chosen to have a very simplistic view about the Swiss market and treats it - to a certain degree - the same as an EU country. From a compliance/business perspective this may indeed have some benefits.
Personally, I’m not convinced this ban they enforced should even be an issue if you consider relevant Swiss legislation according to Art. 8 par. 4 of FinSA:
“No key information document need be made available [by the financial service provider such as Degiro] if the service is provided exclusively in the execution or transmission of client orders, unless a key information document has already been produced for the financial instrument.”
Since Degiro is offering execution-only services, they could still service CH-based clients (i.e. executing orders for financial products even without key information documents at all, not even considering the language point). Swiss law is also more “relaxed” regarding the language point, requiring the key information document to be provided either in an official language or in English or in the language the client wishes to use, cf. Art. 89 FinSO, if interested.
I still haven’t received an update by Degiro with regard to my query on this. Looks like I will have to review my foreign broker situation (not very enthusiastic about it).
FYI: At least for VWCE I was able to execute a trade today. In the Documents section a local DE KID is now available.
Edit: Degiro’s customer support answer is in, in essence confirming what we already know (German only):
"Vielen Dank für Ihre E-Mail.
Wir verstehen, dass die Änderung der PRIIPs-Gesetzgebung (Packaged Retail and Insurance-based Investment Products) für Ihre derzeitige Anlagestrategie eine Unannehmlichkeit darstellt und dass Sie einige zusätzliche Fragen dazu haben.
Zuallererst möchten wir betonen, dass diese Änderung nur die Eröffnung einer neuen Position oder die Vergrösserung Ihrer aktuellen Position(en) betrifft und nur für Produkte gilt, für die wir derzeit kein KID (Key Information Document) auf Deutsch, Französisch oder Italienisch haben. Es ist weiterhin möglich, Positionen zu halten oder zu schliessen, die Sie bereits in einem betroffenen Produkt haben.
In der Zwischenzeit sind wir ständig auf der Suche nach neuen KIDs der Emittenten dieser Produkte. Wenn Sie zufällig auf ein KID in einer der oben genannten Sprachen stossen, das die Anforderungen zu erfüllen scheint, können Sie uns gerne die URL schicken. Wir können es dann überprüfen und die Verfügbarkeit des Produkts neu einschätzen. Weitere Informationen darüber, wie Sie die Aufnahme eines Finanzprodukts in unsere Plattform beantragen können, finden Sie in unserem Help Center.
Wir danken Ihnen für Ihr Verständnis. Sollten Sie noch weitere Fragen haben, zögern Sie bitte nicht, sich an uns zu wenden."
The problem is the same as Swissquote adding stealth fees like the 0.3% custody fees above 1 mill, or when Degiro increased the forex fees by 150%: Where is the higher quality in service to compensate for these fees? Why is IBKR lowering their fees constantly while Degiro just can’t go a year without price hikes? Like someone said above, this is clearly the “boiling the frog” strategy where they keep trying to see what the can get away with.
I’m not complaining about their fees. I’ m complaining about their unpredictable behaviour and constant changes, which is not something that I like from a broker in particular. Although you could say that price increases might have become something predictable, now that I think of it.
I just don’t like to have to read the fine print every few months to figure out where they hid new costs this time.
I’d admire their pragmatism, were it not for their dilettantism. I mean… fulfilling their legal duties in offering the product with something crowdsourced from their own customers?
Some brokers in Czechia seem to have them translated to the Czech language for their customers. And someone apprently provided Degiro with the link. Degiro though replied that they “can only accept links from issuer’s website not from another broker.”
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