US ETFs no longer purchasable in Europe

Ludicrous.

Punish people who work hard (as usual) to fund the ignorance, laziness, and lack of personal responsibility of others.

“I was forced to leave the civil service so I don’t get a fat juicy defined benefit pension...let’s make these other unconnected people pay.”

Why didn’t she go and work somewhere else? Why was it a shock when Citizens Information websites etc have the info?

How much of a fiddle went on over the years in terms of farming, grants, management of income downwards?

This narrative is horse manure.
 
Last edited:
Gordon Gekko said:
Ludicrous.

Punish people who work hard (as usual) to fund the ignorance, laziness, and lack of personal responsibility of others.

“I was forced to leave the civil service so I don’t get a fat juicy defined benefit pension...let’s make these other unconnected people pay.

Why didn’t she go and work somewhere else? Why was it a shock when Citizens Information websites etc have the info?

How much of a fiddle went on over the years in terms of farming, grants, management of income downwards?

This narrative is horse manure.
Click to expand...

I don't go along with the first line there are a lot of hardworking people on low wages who up to a few years ago paid very high prsi and high tax this was work that needed to be done there are hardworking people paying no tax and hardworking people paying very high tax on there income in this country,

We are beginning to see the result of the change to public servants pensions in 1995 and the pension levy starting to feed into private sector tax relief ,

The minister in charge of the state contribution pension and the minister for finance and the pressure group are all saying it is unfair

The reason this will get through is people are focusing on the pressure groups and allowing the minister for finance to pick there pockets for a few extra votes knowing well high paying taxpayers will always vote FG/FF,
 
Last edited:
See below for a response I received from Blackrock UK when I asked if they plan to release a KIID for US domiciled ETF’s.


Certain US iShares ETFs are registered under Article 42 of AIFMD in the United Kingdom, Luxembourg, Sweden, Finland and the Netherlands which allow for marketing to professional investors in these countries. In addition, fund manufacturers are now required under MIFID II to make a target market assessment for each product sold to EEA investors. BlackRock has assessed the target market for these products as being suitable for professional investors only to align with their AIFMD registrations. Fund manufacturers (and distributors) are required to provide a PRIIPs KID or UCITS KIID to retail EEA investors prior to the point of purchase. If no KID/KIID is available, then the product cannot be sold to a retail investor in the EEA from 1 January 2018.


Since these US iShares ETFs have only been registered under AIFMD for marketing to professional investors (and currently may not be marketed to retail investors), BlackRock has not produced PRIIPs KIDs for these US iShares ETFs.


Any US iShares ETFs that have not been registered in an EEA jurisdiction should not be marketed in such EEA jurisdiction.


If fund distributors were selling these US iShares ETFs to retail investors in the EEA before the start of this year, they will now need to stop selling to retail investors since PRIIPs KIDs are not available for these US iShares ETFs. In any case, as these US iShares ETFs are treated as complex products under MiFID II, distributors would have needed to carry out appropriateness tests in order to continue to sell them to EEA retail investors.


All of the Irish domiciled iShares exchange traded products have target markets that include retail investors and we have made UCITS KIIDs available for the Irish iShares ETFs and PRIIPs KIDs available for the Irish iShares ETCs.


For example, iShares MSCI EMU UCITS ETF(CEU) is available for individual investors in the UK. This is the same fund as EZU, tracking the same benchmark.
 
To summarise, BlackRock's US-domiciled funds and ETFs will no longer be offered to retail investors in the EU due to regulatory hurdles.

To be fair, EU-domiciled funds have never been available to retail investor in the US for the same reason.
 
After realizing I can no longer buy US ETFs on degiro, I'm just getting up to speed on all this now.. I can't believe what I'm reading - It seems to me that all this PRIIPS KIDS stuff is a heavily disguised robbery of US market share of ETFs by the EU (presuming most EU retail investors will now switch to UCITS ETFs). And as somebody mentioned, the ETF providers are only too happy to let it happen for the higher margins.

So on the one hand the Irish domiciled funds industry stands to gain trillions from these MiFID2 rules, but on the other hand Irish resident ETF investors like ourselves are now shafted with deemed disposals and 41% Nonsense tax. All the while we'll be pilloried again by our EU counterparts for further enabling tax avoidance.

This all slipped by far too easily.. Surely Irish investors are not the only heavily affected? Any other EU countries with this insufferable UCITS tax setup?

Where do I sign this petition? The law must change.
 
In general, US-domiciled ETFs don't suit EU investors because they are required by US law to distribute essentially all income and capital gains (which are subject to high rates of income tax in most EU Member States).

PRIIPs & MiFID II really have nothing to do with economic protectionism.

The Irish tax regime is entirely an Irish competence - you need to lobby your local TDs if you want to see a change in the current regime.
 
Sarenco said:
The Irish tax regime is entirely an Irish competence - you need to lobby your local TDs if you want to see a change in the current regime.
Click to expand...

An Irish incompetence*
I wrote to my local TDs about a year ago on this issue and didn't even get courtesy replies.. The problem is that most of these acronyms just go over people's heads. Will have to find a way to frame it in the sense that small-time savers looking for a return are being unfairly taxed.

Regarding the deemed disposal provision.. If one were to become tax resident elsewhere for the maturity of the 8 years of their ETF holdings... Upon return, does deemed disposal kick-in or reset or what would be the case I wonder?
 
SreudianFlip said:
....Irish resident ETF investors like ourselves are now shafted with deemed disposals and 41% Nonsense tax. ...
Click to expand...

Sarenco said:
....The Irish tax regime is entirely an Irish competence - you need to lobby your local TDs if you want to see a change in the current regime.
Click to expand...

SreudianFlip said:
An Irish incompetence*
I wrote to my local TDs about a year ago on this issue and didn't even get courtesy replies.. The problem is that most of these acronyms just go over people's heads. Will have to find a way to frame it in the sense that small-time savers looking for a return are being unfairly taxed. ....
Click to expand...


More and more of us need to start putting pressure on our politicians, if we want this tax rule changed.

Emails to the Minister for Finance and copying local TDs calling for change, emails to our local TD's asking them to raise the matter as a question to the Minister for Finance in the Dail, are ways of going about it. But like everything else, the politicians often need a good kick in the a$$ to get them moving.
 
Vanguard confirmed the following and seem to have no intention of providing KID documents:

"With effect from the 3rd January 2018 MIFID II and PRIIPs regulations require various additional disclosures for European regulated funds. Vanguard’s US domiciled ETFs are approved and regulated by the SEC which has different disclosure requirements to those stipulated by MiFID II and PRIIPs. As Vanguard’s US domiciled products are not registered in Europe under AIFMD, these products are not actively marketed in Europe. Therefore, Vanguard does not provide PRIIP KIDs or the transaction costs, ongoing charges and target market analysis for our US domiciled ETFs and will not be able to make these available.

We understand that some investors are very disappointed with the above, however as you know, our range of European domiciled equity and fixed income ETFs are fully compliant with MIFID II and PRIIPs and remain available to European investors through distributors. Each of these products will be supported with the appropriate UCITS KIIDs. Please also note that there is no requirement for UCITS funds to produce PRIIP KIDs until Jan 2020."
Click to expand...

Furthermore, DEGIRO confirmed that the US ETFs will be unavailable on their platform until such time that the issuers provide KIDs.

So it seems that US ETFs will be unavailable indefinitely unless a broker creates KIDs themselves or one of the issuers provide the documents.

Vanguard stand to lose a lot of Irish investors (drop in the ocean of course), considering that none of their available EU ETFs are accumulating..

It seems confirmed - we are limited to EU-only ETFs for the foreseeable future. The only course of action remaining as I see it is to apply pressure to change the tax law in Ireland to provide specifically for ETFs being CGT-eligible rather than Exit tax.
 
The consequence of this for US citizens living in the EU seems to be terrible. They can't invest in EU domiciled ETFs because those are prohibitively taxed by the US tax authorities as PFICs. They can't invest in European EFTs for the reasons explained above.

Have I got this right. Any knowledgeable person care to opine?
 
Thanks for the helpful reply Marc. I'm not in the 500K league or anything like it. Realistically what kind of minimum investment figure am I looking at to make it worthwhile to retain you as a Discretionary Portfolio Manager, for both a monthly investment and a total investment.
 
AJAM said:
I think I am going to start a petition.
Click to expand...
Hi AJAM

I was wondering if you found the time to follow through on this idea?

I'm sure there are plenty of contributors and readers here that would welcome an opportunity to sign such a petition.
 
Sarenco said:
Hi AJAM

I was wondering if you found the time to follow through on this idea?

I'm sure there are plenty of contributors and readers here that would welcome an opportunity to sign such a petition.
Click to expand...

Unless you target the party in power It is a waste of time, The people you would be targeting to sign are there supporters,
 
As I understand it, this has already happened and people will be allowed to continue to invest in US ETFs.

There have been a number of submissions made to the authorities.

With regard to the tax piece, I despise the complexity of the regime as much as the next man; however there is some logic to the punitive tax treatment of funds that just roll up their income all ad infinitum. The State gets nowt in such circumstances. Revenue were happy to concede on the US ETFs because they have to distribute income. If a fund distributes, it should be subject to CGT.
 
Marc said:
They can continue to access a portfolio of US ETFs via a Professional Investor service which is exempt from providing KID documents
Click to expand...

Professional investors (per se or opt-up) can continue to invest in PRIIPs (including US-domiciled ETFs) without a KID being provided but, in practice, investment firms are very slow to re-classify retail investors as professional investors for good reason.
 
You must log in or register to reply here.
Back
Top