HELP - No longer allowed to trade (PRIIPS regulation)

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Topic Author
airelleofmusic
Posts: 96
Joined: Mon May 01, 2017 8:54 am

HELP - No longer allowed to trade (PRIIPS regulation)

Post by airelleofmusic » Tue Jan 01, 2019 6:15 am

Hello,

As an EU citizen I opened a trading account at TD Ameritrade a few years ago.
However yesterday I tried to buy shares of AGG but I was not allowed due to a new European Union regulation (PRIIPs) that prevent all EU citizens from buying US ETFs.

So now I am 100% full cash on my account and I can't buy anything ! All my orders are rejected due to this regulation.

Should I change my broker ? Do you know some that allow EU citizens to buy US ETFs ? Or do you have any solution ?

Thanks !
aom
LBYM and enjoy life ! Thanks BH !

The Wizard
Posts: 13356
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Location: Reading, MA

Re: HELP - No longer allowed to trade (PRIIPS regulation)

Post by The Wizard » Tue Jan 01, 2019 6:36 am

You might want to check out Interactive Brokers.
But I'm not familiar with that EU regulation...
Attempted new signature...

AlohaJoe
Posts: 4935
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Re: HELP - No longer allowed to trade (PRIIPS regulation)

Post by AlohaJoe » Tue Jan 01, 2019 7:28 am

airelleofmusic wrote:
Tue Jan 01, 2019 6:15 am
I was not allowed due to a new European Union regulation (PRIIPs) that prevent all EU citizens from buying US ETFs.

Should I change my broker ? Do you know some that allow EU citizens to buy US ETFs ? Or do you have any solution ?
There is no broker that will allow you to break EU law. However, if you search "priips" on Bogleheads you will find other threads on Bogleheads with other people who have run into similar issues and their attempts to find solutions. I haven't really paid much attention to it but my understanding is that you need to switch to "professional investor" status and not "retail investor" status.

Topic Author
airelleofmusic
Posts: 96
Joined: Mon May 01, 2017 8:54 am

Re: HELP - No longer allowed to trade (PRIIPS regulation)

Post by airelleofmusic » Wed Jan 02, 2019 2:53 am

Hummm thank you will have a look :)
LBYM and enjoy life ! Thanks BH !

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BeBH65
Posts: 1564
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Re: HELP - No longer allowed to trade (PRIIPS regulation)

Post by BeBH65 » Wed Jan 02, 2019 5:42 am

Indeed, since the beginning of 2018 it is increasingly difficult for EU citizens to buy funds that are not complying with EU reporting rules.

Alternative is to invest in non US domiciled funds. This will also avoid the risks of us taxation for the EU investors. Ireland based funds seem to have many advantages.

Please have a look at the 'non-US domiciles' pages on our bogleheads Wiki.
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence). | Have a look at https://www.bogleheads.org/wiki/Outline_of_Non-US_domiciles

Topic Author
airelleofmusic
Posts: 96
Joined: Mon May 01, 2017 8:54 am

Re: HELP - No longer allowed to trade (PRIIPS regulation)

Post by airelleofmusic » Wed Jan 02, 2019 5:54 am

BeBH65 wrote:
Wed Jan 02, 2019 5:42 am
Indeed, since the beginning of 2018 it is increasingly difficult for EU citizens to buy funds that are not complying with EU reporting rules.

Alternative is to invest in non US domiciled funds. This will also avoid the risks of us taxation for the EU investors. Ireland based funds seem to have many advantages.

Please have a look at the 'non-US domiciles' pages on our bogleheads Wiki.
Yes but there are many drawbacks in investing in EU:
-ER are higher
-No commission free ETFs as in the US
-Euro currency not sustainable (own point of view)
-Generally, trading costs/transaction costs are higher
LBYM and enjoy life ! Thanks BH !

TedSwippet
Posts: 2515
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: HELP - No longer allowed to trade (PRIIPS regulation)

Post by TedSwippet » Wed Jan 02, 2019 7:15 am

airelleofmusic wrote:
Wed Jan 02, 2019 5:54 am
-ER are higher
VOO's TER is 0.04%. VUSD's is 0.07%. From one viewpoint this is close to twice the TER faced by a US investor. From another though it is €30/year on a €100,000 holding, so perhaps not something worth contorting investment holdings over.
airelleofmusic wrote:
Wed Jan 02, 2019 5:54 am
-No commission free ETFs as in the US
Vanguard UK offers UK investors zero-cost trading in Vanguard funds and ETFs. That said, there is a 0.15% annual holding fee for a Vanguard UK account, so that more than destroys any benefit of the zero-cost to trade. Better deals are probably available elsewhere. In practice, for a long term buy and hold investor, trading costs should not form a major overhead.
airelleofmusic wrote:
Wed Jan 02, 2019 5:54 am
-Euro currency not sustainable (own point of view)
This is irrelevant. The denomination currency of an ETF has no bearing on its long term performance. The only thing that matters here is the currency of the underlying assets. If you really think the Euro is doomed and the USD is the only stable currency going forwards -- and I'm not suggesting that you do this -- then moving to all VOO (US domiciled) or VUSD (Ireland domiciled) will produce the exact same outcome for you after you factor out the TER difference.
airelleofmusic wrote:
Wed Jan 02, 2019 5:54 am
-Generally, trading costs/transaction costs are higher
Same as "commission free" above.

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