Schwab - U.S. ETFs and ETNs restrictions as of September 19
Posted: Wed Aug 14, 2019 11:06 am
Just received the following email from Schwab
This is a fairly minor inconvenience to me, as I'm gradually selling off my USD ETF portfolio and replacing with GBP-denominated as my UK capital gains allowance permits, but I could see this causing significant problems for US citizens. Does anyone know the background to this, and whether other brokers are likely to follow suite? I'd also be very concerned if there were any changes likely to requite existing positions to be liquidated.Beginning September 19, 2019, Schwab clients who are residents of the E.U. will no longer be able to purchase U.S.-registered exchange-traded funds (ETFs) and exchange-traded notes (ETNs).
What this means for your account.
This restriction results from regulatory changes and affects all residents of the E.U. With this change:
• You will be able to maintain any existing U.S. ETF or ETN positions you hold, but you will not be able to purchase more.
• Dividends can no longer be reinvested in U.S. ETFs or ETNs.
• You may liquidate U.S. ETFs or ETNs, but you will not be able to repurchase them.
As an alternative to U.S. ETFs, Schwab is offering ETFs that have been authorized as Undertakings for Collective Investment in Transferable Securities (UCITS). These funds meet relevant E.U. requirements and offer investment strategies similar to those of their U.S. counterparts. They will be available to eligible global investors only. U.S. residents will not be able to purchase UCITS.