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


#21

If so, then this is huge news for us Swiss Mustachians. Why would Switzerland do such a thing? Were they again strong armed by the EU?

Good to know, but it’s gonna take a while until I get that much :stuck_out_tongue: . How is the broker gonna verify a background/past experience in finance? What qualifies?


#22

I wonder if opting for pro status will have consequences in terms of capital gains tax with swiss authorities. I guess we will have to wait until 2021 to find out.


#23

Actually how hard would it be for Vanguard to translate their KID into German? They don’t have to translate it into all EU languages, or? So they could start with the most important languages for the most important ETFs. Anyway, which languages does this PRIIP require? Any official language of the domicile country of the investor? What if I have a CAE certificate that proves I understand English? What about native English speakers living in the EU?


#24

I guess Vanguard will do this but only for products which they explicitely market in the EU. So it limits our choice either way.

I checked on the IB website for the available KIDs and you have to select a European Stock Exchange first. Sooo … my conclusion is this means only products that are traded on EU exchanges are eligible?


#25

It’s time to start collecting signatures for an optional referendum. :rofl:. But the sad thing is that most people don’t care and are investing their money in actively managed funds with 2+% TER.

Actually how hard would it be for Vanguard to translate their KID into German?

I don’t think it’s a question of translation it’s more the question of producing the document. It’s one more cost that will have to be paid by the management fee and it’s a cost they don’t want to pass to US customers. The thing is that if you have two funds that track the same index just with a different domicile then maybe the will find a way to skirt the regulations.


#26

Actually thats too late, since the “Referendumsfrist” was until October 2018 :wink:


split this topic #27

3 posts were split to a new topic: Non-Relevance of ETF Quotation Currency


#29

I think you are entirely right about.

However, I did some research and it turns out that there are equivalent Swiss laws (FINIA/FINSA) that should enter into application in January 2020. They would also require KID document for retail investors in Switzerland. It still does not explain why DEGIRO changed early.

Can anybody confirm that ?


#30

This is the email I got from DEGIRO when I asked about this:

"Due to the new PRIIPS legislation, as of the 2nd of January 2018 a number of products are now unavailable for European investors, but remained available for Swiss clients. Following the change, all advanced products such as derivatives and ETFs must have publicly available from the provider a Key Investor Information Document (KIID) in any language or a Key Information Document (KID) in the local language of the investor. Products which do not meet the KID/KIID requirements are longer available for European investors.

Unfortunately, we have now taken ETFs off of the platform that do not have a KID/KIID publicly available for all of our clients as we deem the information delivery of these products in necessary.

If you have positions open in these products you will be able to close them however you will not be able to increase your positions."

I’ve read contrasting reports about how/if this affects IB as well. Can anyone confirm you can still trade US ETFs on IB?


#31

Wow, they answered much better to you than to me! Thanks for sharing.

Still, they took a decision to extend this to all customers instead of only EEA customers. That is a sucky move on their part. And do not tell me they did that for the clients, they only did that to simplify their system. One more reason to move away from DEGIRO now.

PRIIP should not impact IB for Swiss customers, at least from a legal standpoint. They could do the same as DEGIRO of course, but we can hope that they are better than that.

However, I think (still need confirmation) that will change starting in 2020 when FINIA/FINSA laws will come into play. In that time, it is highly likely that IB will do the same thing to comply to Swiss regulations.


#32

As I wrote earlier, I bought Vanguard ETFs just yesterday, no problem at IB


#33

I just got Degiro support on the phone (with zero wait time, which was nice).
They confirmed that due to the PRIPS legislation (…), etc. But the person on the phone could not tell me why PRIPS would apply to Switzerland. He said something like:

Yes, initially we thought it didn’t apply either, but then we checked and it turns out it does.

So, yeah.


#34

This really sucks. I was going to start investing in VT at IB this month.

So by the looks of it IB will stop offering US funds by 2020?
What should I do, buy VT now and then hope it becomes available again or switch to VWRL?

This all could be avoided if vanguard would provide a german KIID right?


#35

You still should. You will save heaps on transaction costs and currency exchange compared to Swiss brokers or DEGIRO.

The cheapest European based MSCI World are the Lyxor, HSBC and Xtrackers with TERs of 0.12%, 0.15% and 0.19%. Not the end of the world if you ask me. Add the Ishares EIMI (TER 0.18%). for Emerging Markets and it’s all set.

I’ll keep investing in VTI, VEA and VWO throughout 2019 and for long as I can.


#36

I am wondering what the effect of a hard brexit would have on IB, basically nothing should happen right? IB would move to a EU country to prevent anything adverse happening to their business…


#37

If you buy VT now, you will be able to keep it. And then in 2020 you would continue buying VWRL, while keeping VT.

That’s a good question, I’ve been wondering this as well. It’s not clear to me if IB can keep operating from the UK or will they need to look for a place within the EU. EU surely makes pressure on neighboring countries, like Switzerland. I guess that’s why these laws will be introduced. In order to stay compliant with EU rules and be allowed to have access to EU market. And vice versa: for EU customers to be able to trade in Switzerland.


#38

Thanks I thought as much, will do that then.

I guess I might as well wait til april to see what happens :confused:


#39

I contacted Degiro support this morning and they confirmed that US domiciled ETFs would no longer be available for buying in Switzerland.
You can either maintain your existing positions or have the option to transfer them to another broker.

If you choose the latter, the below is the process as per their email from today morning.

_Dear Mr. Sirob, _

It is possible for you to transfer your portfolio from DEGIRO, however there are a number of points to consider before commencing:

* DEGIRO charges a fee of €10.00 + external costs per position to transfer. These external costs can vary and may exceed €100 per position depending on the exchange. For example, the external costs for positions on the LSE is €44.00, the ISE is €74.00, and the NYSE/NASDAQ is €46.00 (approximately).

* It is also possible that your current bank or broker may also charge a fee for transferring your portfolio.

* It is also important to note that a full portfolio transfer can take several weeks to be completed.

Please complete the attached form and return to transfers@degiro.co.uk and we can proceed with the transfer.


#40

According to this post on reddit, Vanguard is not going to provide the neccessary documentation for US domiciled funds. Seems to have something to to with regulation.


#41

How does using IB save heaps on transaction costs compared to DEGIRO. I understand one could prefer IB to DEGIRO for many valid reasons, but fees are really not one of those, or am I missing something?