US-ETFs (VT for instance) not available anymore in Switzerland?

Investing / Brokers
1

Hi,

Since a few days, Vanguard ETFs are not available on DEGIRO anymore. I can still sell my assets but I cannot buy more. I contacted them and they confirmed that this is related to the European law requiring all funds to provide a Key Investor Information Document (KIID). The law is PRIIPS. Before, this was not applicable to Switzerland, but it just started being applicable :angry:

Since they started requiring these documents one year ago and most US funds stil did not provide them for their US-domiciled funds, I do not think they are going to be available in Switzerland any time soon. Vangaurd actually confirmed that they were not going to provide them for their US-domiciled funds.

I see two options for me:

  1. Move to EU-domiciled funds
  2. Move to IB

Could anyone confirm that this does not impact IB?
Did I miss something?

Thanks

5 Likes
2

Just bought another batch of VOO on IB, no problem. At this point this does not affect IB, I should also have had a notification otherwise.

Also note how this regulation is plain and simple protectionism in other forms. Not surprised at all.

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3

Thanks for the confirmation :slight_smile:

Yes, it is only a way to force Europeans to invest in European funds.

4

This is a deal breaker for me with Degiro. So I have been looking at other options and IB sounds like the cheapest. Some questions:

  • Is is possible (and anybody has idea how) to transfer ETFs from Degiro to IB in a relatively simple way or is it better/cheaper to sell and re-buy?
  • The other option would be to leave my investments in Degiro (~20k at the moment), although this would make following the investments a bit more complex. Is generally a good idea to invest on more than one broker?
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5

I wonder how it doesn’t apply for IB yet as they should be affected by the same regulation.

Maybe it’s just a matter of time

6

I’m guessing that is because they are an U.S. Broker.

7

That’s a good question. I’m wondering the same thing.

From DEGIRO, it will cost you 10 EUR per position to transfer.
From IB, it depends on the kind of transfer that is done. I did not find the kind of transfer that is involved from DEGIRO.

As for leaving your investments at DEGIRO, I do not think there is anything wrong with it. However, since IB is charging 10 CHF of custody fees per month, you are better with having enough money on it. If you have more than 100K, this is waived and it may be interesting in having several brokers.

8

No they are based in the UK and apparently are also affected by it.
My guess is since we are Swiss customers it does not apply yet?!

9

You may be right. I just read a couple of posts about IB and where people have the same issue. So maybe IB is not even a solution to this problem :frowning:

10

Interesting (and sad) news. One explanation could be that they want to force Europeans to use European ETFs. Other could be that they want to make ETFs less available as a whole (you know, banksters, wealth managers make a nice buck on actively managed funds). Hope it doesn’t come to that.

I wonder what will happen to IB UK when Brexit happens. And other financial services companies that are based in UK.

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11

Well, from what I can read PRIIPs apply only to EEA domiciled investors, so in theory, we should be exempted.
But I presume the Swiss marked it quite small for DEGIRO so they will not bother to list the US-domiciled funds.

Let’s hope that the Brexit thing does not cause some complications with IB UK.

12

I am not sure they are correct but DEGIRO told me that starting this year, Switzerland will be impacted by PRIIP. But I did not find any source about this.

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13

I think they’re bullshitting everyone including themselves, PRIIPS doesn’t apply to Swtizerland.

Ditch these suckers.

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14

Well The EU can only force it on the EEA. But apparently the Swiss parliament passed a similar regulation to align the Swiss regulation with PRIIP, but from what I see it will come into force next year (2020)

https://www.efd.admin.ch/efd/en/home/themen/wirtschaft--waehrung--finanzplatz/finanzmarktpolitik/fidleg-finig/fb-fidleg-finig.html

So it looks we also might get screwed :confused:

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15

Jeez. Just to be sure, does PRIIP apply to EU domiciled investors or to brokers operating in the EU? Or are both of these essentially the same? If you create an account at a non-EU broker, does he have to adhere to EU laws if he wants to serve EU-domiciled customers?

And if this thing goes through, are we gonna have to sell our US ETFs? I guess then most of us will have to go and buy VUSA or VWRL?

Gotta love the EU, they only take your freedom to “protect” you


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16

I didn’t try to buy this month but I’ve tried to search for them and they don’t appear anymore.
The only way I can see them is going through the favourites or the portfolio.

I think I’ll need to move from Degiro too, probably to IB.

17

You can trade US ETFs even under PRIIPS actually if you qualify for a MIFID pro status - pick two of: 10 transactions/Q, 500k+ portfolio, past work in finance.

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18

From my understanding based on reading the briefs, the important thing is the domicile of the Investor. The same way GDPR affected even American websites. So unless the brokers want to deal with EU penalties they will have to follow these rules when dealing with European investors

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19

I just read through the passed law and indeed, they adopted the same rules in Switzerland beginning in 2020.

So if you want to continue trading freely, you have to have at least 500k in capital as well as a background in finance.

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20

I am absolutely flabbergasted with the sneaky way this was brought onto us. Basically European finance teamed up with regulators and governments to force retail investors into buying their shitty products. There is no way this regulation will bring more “protection” for retail investors.

1 Like