Schwab - U.S. ETFs and ETNs restrictions as of September 19

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boglechris
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Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by boglechris » Wed Aug 14, 2019 11:06 am

Just received the following email from Schwab
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.

Alternative ETFs.

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.
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.

TedSwippet
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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by TedSwippet » Wed Aug 14, 2019 11:42 am

boglechris wrote:
Wed Aug 14, 2019 11:06 am
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.
Although Schwab haven't said explicitly, the best guess is that they have just decided to implement PRIIPs restrictions (these have actually been around since Jan 2018):

EU investing: EU legislation : UCITS, MiFID II and PRIIPs - Bogleheads

According to reports, Interactive Brokers and TD Ameritrade have already implemented the same restrictions. It's a lousy time to be a US citizen living outside the US in the EU, isn't it?
Last edited by TedSwippet on Thu Aug 15, 2019 5:51 am, edited 1 time in total.

grylex
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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by grylex » Wed Aug 14, 2019 12:13 pm

Thanks for sharing!

Is there an option to be treated as PRO investor to have access to US ETFs? Similar to IB.
Also does Schwab offer access to non-US stock exchanges where you can buy e.g. VWRL or IWDA. As I understood from their website Schwab One International only allows to buy US products.

Otherwise it’s useless for non-US residents and the only option for foreign investors is IB.

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galeno
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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by galeno » Wed Aug 14, 2019 12:27 pm

Will Schwab International (for non-USA "persons") allow access to Ireland Vanguard and Ireland I-shares ETFs on the LSE?

If so it's about time.
AA = 40/55/5. Expected CAGR = 3.8%. GSD (5y) = 6.2%. USD inflation (10 y) = 1.8%. AWR = 4.0%. TER = 0.4%. Port Yield = 2.82%. Term = 33 yr. FI Duration = 6.0 yr. Portfolio survival probability = 95%.

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by Always passive » Wed Aug 14, 2019 11:25 pm

Following the about question, but for US citizens living overseas, would Schwab (or for that matter other broker) allow you to buy ETFs domiciled in Ireland? And if yes, does anyone know if there are unique US tax implications to worry about?
If no issue, this could be a way to replace the US ETFs.

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by TedSwippet » Thu Aug 15, 2019 2:33 am

Always passive wrote:
Wed Aug 14, 2019 11:25 pm
Following the about question, but for US citizens living overseas, would Schwab (or for that matter other broker) allow you to buy ETFs domiciled in Ireland? And if yes, does anyone know if there are unique US tax implications to worry about?
If no issue, this could be a way to replace the US ETFs.
Why Americans Should Never Own Shares in a Non-US Mutual Fund (PFIC)

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by Always passive » Thu Aug 15, 2019 5:36 am

Are ETFs mutual funds?

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by boglechris » Thu Aug 15, 2019 5:38 am

TedSwippet wrote:
Wed Aug 14, 2019 11:42 am

Although Schwab haven't said explicitly, the best guess is that they have just decided to implement PRIIPs restrictions (these have actually been around since Jan 2018):

EU investing: EU legislation : UCITS, MiFID II and PRIIPs - Bogleheads
Thanks for this context! The combination of UCITS and PFIC does make life very challenging for US citizens. It's not clear to me why Schwab have only singled out ETFs and not also mutual funds, given these appear to be covered by the same legislation? I'd be worried that this could eventually drive Schwab et al to withdraw from the expat market altogether.

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by boglechris » Thu Aug 15, 2019 5:39 am

Always passive wrote:
Thu Aug 15, 2019 5:36 am
Are ETFs mutual funds?
From a PFIC perspective, yes.

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by AlohaJoe » Thu Aug 15, 2019 5:41 am

boglechris wrote:
Thu Aug 15, 2019 5:38 am
It's not clear to me why Schwab have only singled out ETFs and not also mutual funds, given these appear to be covered by the same legislation? I'd be worried that this could eventually drive Schwab et al to withdraw from the expat market altogether.
It was already not possible for expats to buy mutual funds, due to US regulations.

I don't see why this would have anything to do with Schwab withdrawing from the expat market. Despite the impression you might get from reading Bogleheads, there are actually countries in the world that aren't in the EU and expats living there are totally unaffected by this PRIIPs stuff.

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by oldcomputerguy » Thu Aug 15, 2019 5:49 am

Always passive wrote:
Thu Aug 15, 2019 5:36 am
Are ETFs mutual funds?
No, they are two different investment vehicles. The end result is similar (a fund that invests in underlying holdings), but they are structured differently.

This article on the BH wiki might be helpful in understanding the two.

https://www.bogleheads.org/wiki/ETFs_vs_mutual_funds
"I’ve come around to this: If you’re dumb, surround yourself with smart people; and if you’re smart, surround yourself with smart people who disagree with you." (Aaron Sorkin)

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by TedSwippet » Thu Aug 15, 2019 6:01 am

AlohaJoe wrote:
Thu Aug 15, 2019 5:41 am
Despite the impression you might get from reading Bogleheads, there are actually countries in the world that aren't in the EU and expats living there are totally unaffected by this PRIIPs stuff.
Thanks for that reminder -- it's easy to become a bit parochial on this at times. I've updated my comment upthread. It's only EU resident(*) US citizens that have this particular issue with PRIIPs.

(*) Also a couple of European but non-EU countries are believed to be applying PRIIPs too. Switzerland and Norway, from anecdotal reports (blogs, mainly). If or when the UK Brexits (sigh), it's pretty likely it will not exit from PRIIPs, although as with everything around Brexit, nobody knows anything for sure.

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by Always passive » Thu Aug 15, 2019 7:04 am

oldcomputerguy wrote:
Thu Aug 15, 2019 5:49 am
Always passive wrote:
Thu Aug 15, 2019 5:36 am
Are ETFs mutual funds?
No, they are two different investment vehicles. The end result is similar (a fund that invests in underlying holdings), but they are structured differently.

This article on the BH wiki might be helpful in understanding the two.

https://www.bogleheads.org/wiki/ETFs_vs_mutual_funds
Sorry, I did not mean to ask for the technical difference, I know well what it is.
My question was referred to the US tax implications for American expats that buy an ETF domiciled overseas. Those of us that live overseas know well not to buy foreign mutual funds, but I wonder if the IRS would treat ETFs the same way.

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by TedSwippet » Thu Aug 15, 2019 7:24 am

Always passive wrote:
Thu Aug 15, 2019 7:04 am
My question was referred to the US tax implications for American expats that buy an ETF domiciled overseas. Those of us that live overseas know well not to buy foreign mutual funds, but I wonder if the IRS would treat ETFs the same way.
From the ever-reliable Phil Hodgen:
The technical definition
The technical definition, according to U.S. tax law, is a foreign corporation that meets either the “income test” or the “asset test.”

The “income test” looks at the income of that foreign corporation and if 75% or more is passive income (interest, dividends, rent, capital gain), you pass the test.

The “asset test” looks at the assets of that foreign corporation and if more than 50% of the assets are the kind of assets that could produce passive income.

Foreign mutual funds are PFICs
It is a near certainty that mutual funds outside the United States are organized as corporations. Foreign corporations. This means that if you are the proud owner of a foreign mutual fund, you have a PFIC. You have to look, however, to be sure. If the fund is a partnership or trust, then it won’t be a PFIC.

Exchange-traded funds are PFICs
Exchange-traded funds are almost certainly PFICs. They’re usually corporate entities whose shares trade on the stock market just like a regular company’s shares. The assets of an ETF? Stock. Passive assets. Meets the “asset test.” Again, your only salvation is to find out if possibly that ETF is formed as an entity other than a foreign corporation.

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by Always passive » Thu Aug 15, 2019 7:40 am

Thank you for the info.
First American expats were not allow to buy US mutual funds. Now I read that because of E.U. rules, the ETFs are out if you live in an European country. So what is left, returning home or renouncing the US citizenship? Does it make sense?
I do not live in Europe, so I am not affected, but one never knows what the future will bring.
What are US expats living in Europe doing?

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by Tourne » Thu Aug 15, 2019 8:07 am

I called the Schwab international trading desk yesterday, and the situation is just as awesome as advertised. :annoyed

No more purchase or dividend reinvestment for US-based ETFs. Schwab will begin offering UCITS funds on 19 September. To be honest, I'm not sure how they are getting around the PFIC rules on this (as outlined above, it seems that non-US ETFs are a no-go with PFIC).

Schwab wouldn't share the list of UCITS they will offer, but said they will have "about 25 funds or so, and the ERs will be in line with those charged in Europe (read: a few basis points more than in the US)". BUT, you will not be able to purchase UCITS online, only over the phone for a $35 broker fee plus a mark-up on the price to account for price fluctuations.

So, the US won't let US citizens invest in UCITS funds, and the EU won't let EU residents invest in anything that is not UCITS. Awesome, no? :annoyed
Plans are nothing; planning is everything - Dwight D. Eisenhower

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by Tourne » Thu Aug 15, 2019 8:12 am

TedSwippet wrote:
Wed Aug 14, 2019 11:42 am

According to reports, Interactive Brokers and TD Ameritrade have already implemented the same restrictions. It's a lousy time to be a US citizen living outside the US in the EU, isn't it?
Can I ask, for those using Interactive Brokers or TD Ameritrade, how has the change affected you? What are you/are you not allowed to do with your account?
Plans are nothing; planning is everything - Dwight D. Eisenhower

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by TedSwippet » Thu Aug 15, 2019 10:47 am

Tourne wrote:
Thu Aug 15, 2019 8:07 am
So, the US won't let US citizens invest in UCITS funds, and the EU won't let EU residents invest in anything that is not UCITS. Awesome, no?
I'd say that almost sums it up.

If we're in the business of apportioning blame though, by far the lion's share goes to the US. It is the party here with the unique stance on citizenship-based taxation combined with some of the most hostile, aggressive and protectionist non-domestic fund tax rules on the planet.

And to be fair to the EU, it does allow EU residents to invest in anything, UCITS or otherwise, just so long as the investment provides a 'key information document' in the required format. That's not a huge barrier, and US domiciled funds and ETFs could reasonably easily comply with this requirement. But at least so far, US fund providers have elected not to, presumably for commercial reasons.
Tourne wrote:
Thu Aug 15, 2019 8:07 am
To be honest, I'm not sure how they are getting around the PFIC rules on this (as outlined above, it seems that non-US ETFs are a no-go with PFIC).
It's not really up to Schwab to 'get around' PFIC rules, I don't think, nor could they even if they wanted to, as far as I can see. Either they view it as their US citizen customers' problem rather than their own, or (perhaps more likely) they are not even aware of it as any form of problem at all.

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by Tourne » Thu Aug 15, 2019 11:11 am

TedSwippet wrote:
Thu Aug 15, 2019 10:47 am
But at least so far, US fund providers have elected not to, presumably for commercial reasons.
By commercial reasons, do you mean they won't spend the money to write a Key Information Document, or they would rather non-US investors invest in their UCITS, which have higher ERs for the most part?

I'm trying hard to remain legal in all jurisdictions. But The Man is making it hard...
Plans are nothing; planning is everything - Dwight D. Eisenhower

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by TedSwippet » Thu Aug 15, 2019 11:33 am

Tourne wrote:
Thu Aug 15, 2019 11:11 am
TedSwippet wrote:
Thu Aug 15, 2019 10:47 am
But at least so far, US fund providers have elected not to, presumably for commercial reasons.
By commercial reasons, do you mean they won't spend the money to write a Key Information Document, or they would rather non-US investors invest in their UCITS, which have higher ERs for the most part?
I suppose it could be either. In some cases though, the extra cost for the UCITS version over the US domiciled one won't be worth a candle -- VUSD's 0.07% garners Vanguard just $40/year over VOO on a $100,000 holding. That won't even be visible to Vanguard as a rounding error.

My guess would be that they just don't see the need to spend the money. Particularly since this tiny differential in cost really means that -- apart from the niche case of US citizens living in the EU -- there's no real direct-to-customer retail market in the EU for US domiciled funds anyway.

For what it's worth, I've always been a bit surprised that Vanguard US jumped through the UK HMRC 'reporting fund' hoops for many of their ETFs, when no other US domiciled fund provider has. This was always a handy escape hatch for US citizens living in the UK, who would otherwise have to navigate the UK's far, far less harsh but still annoying analogue to PFIC. Now that PRIIPs has put a spanner in the works for EU residents, I'll be interested to see if Vanguard US keeps this up.

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by Tourne » Thu Aug 15, 2019 12:02 pm

Interesting. Thanks for the reply.
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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by bgreat » Thu Aug 15, 2019 1:44 pm

TedSwippet wrote:
Thu Aug 15, 2019 6:01 am
(*) Also a couple of European but non-EU countries are believed to be applying PRIIPs too. Switzerland and Norway, from anecdotal reports (blogs, mainly). If or when the UK Brexits (sigh), it's pretty likely it will not exit from PRIIPs, although as with everything around Brexit, nobody knows anything for sure.
Switzerland isn't, and won't be. They are introducing some similar rules next year but (A) their rules don't require a EU-standard KID (so just the usual prospectus is is likely to be enough) and (B) the rules only apply to Swiss brokers serving Swiss customers anyway. Swiss residents wanting to buy US ETF's have been using Schwab and IB since forever, and neither of those is going to be affected. (Since PRIIPS doesn't apply to non-EEA residents, and the Swiss rules don't apply to non-Swiss-resident brokers.)

Norway/Iceland/Lichtenstein are part of EEA, hence highly likely to be affected by PRIIPS.


EU residents could arguably buy their US ETFs via a Swiss broker, BUT: they'll probably say no to any USA'ians as customers, and trading costs are likely to be higher. Looking for a US broker with no EU ties still looks like the best way to go, IB and Schwab unfortunately shot you people in the foot by having EU offices (more significantly, by routing contracts via their EU offices).

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by TedSwippet » Thu Aug 15, 2019 2:00 pm

bgreat wrote:
Thu Aug 15, 2019 1:44 pm
Switzerland isn't, and won't be. ... Norway/Iceland/Lichtenstein are part of EEA, hence highly likely to be affected by PRIIPS.
That's good to know. Thanks for the update. I've read some articles from Swiss firms regarding these new laws, but never been able to quite sort out whether or not Switzerland would actually follow PRIIPs to the letter.

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by sharukh » Thu Sep 19, 2019 10:40 am

its September 19, Have anyone heard from schwab on the list of UCITS ETFs that they support. Thank you.

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by a__ » Fri Sep 20, 2019 12:22 pm

sharukh wrote:
Thu Sep 19, 2019 10:40 am
its September 19, Have anyone heard from schwab on the list of UCITS ETFs that they support. Thank you.
I logged in today, and saw lots of Ireland-listed iShares ETFs.

Cool!

Trouble is, the prospectus is quite clear that US citizens cannot purchase shares. I also got a hard copy letter today informing me that the UCITS funds are not available to US citizens...so I'm back at square one. Is it really the case now that as an EU-resident American, I have ZERO effective ways to be an index investor?

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by sharukh » Sat Sep 21, 2019 8:07 am

a__ wrote:
Fri Sep 20, 2019 12:22 pm
sharukh wrote:
Thu Sep 19, 2019 10:40 am
its September 19, Have anyone heard from schwab on the list of UCITS ETFs that they support. Thank you.
I logged in today, and saw lots of Ireland-listed iShares ETFs.

Cool!

Trouble is, the prospectus is quite clear that US citizens cannot purchase shares. I also got a hard copy letter today informing me that the UCITS funds are not available to US citizens...so I'm back at square one. Is it really the case now that as an EU-resident American, I have ZERO effective ways to be an index investor?
Thanks for sharing.

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by typical.investor » Sat Sep 21, 2019 8:44 am

a__ wrote:
Fri Sep 20, 2019 12:22 pm
sharukh wrote:
Thu Sep 19, 2019 10:40 am
its September 19, Have anyone heard from schwab on the list of UCITS ETFs that they support. Thank you.
I logged in today, and saw lots of Ireland-listed iShares ETFs.

Cool!

Trouble is, the prospectus is quite clear that US citizens cannot purchase shares. I also got a hard copy letter today informing me that the UCITS funds are not available to US citizens...so I'm back at square one. Is it really the case now that as an EU-resident American, I have ZERO effective ways to be an index investor?
Interactive Brokers has direct indexing for a cheap price. It’s smart beta so somewhat tilted but should be ok. I think they only accept US residents though and don’t know if planning to return soon counts (i.e. your domicile is the US even though you are EU resident now).

If it happens to me (transfer to the EU), I am sure I’d set up an LLC in the US and invest through that.

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by michaelotal » Sun Sep 29, 2019 1:27 am

Has anyone come across good quality low cost broadly diversified non-US domiciled active ETFs which don't fall under the scope of PFIC? If yes, please advise as the institution, name and / or ticker. Many thanks!

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by sharukh » Mon Sep 30, 2019 8:09 pm

sharukh wrote:
Sat Sep 21, 2019 8:07 am
a__ wrote:
Fri Sep 20, 2019 12:22 pm
sharukh wrote:
Thu Sep 19, 2019 10:40 am
its September 19, Have anyone heard from schwab on the list of UCITS ETFs that they support. Thank you.
I logged in today, and saw lots of Ireland-listed iShares ETFs.

Cool!

Trouble is, the prospectus is quite clear that US citizens cannot purchase shares. I also got a hard copy letter today informing me that the UCITS funds are not available to US citizens...so I'm back at square one. Is it really the case now that as an EU-resident American, I have ZERO effective ways to be an index investor?
Thanks for sharing.
Hi,
When you get some time, can you pls share some of the good etf (tickers) that you found to be of worthy (low cost broadly diversified) Thank you.

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by typical.investor » Tue Oct 01, 2019 12:06 am

sharukh wrote:
Mon Sep 30, 2019 8:09 pm
sharukh wrote:
Sat Sep 21, 2019 8:07 am
a__ wrote:
Fri Sep 20, 2019 12:22 pm
sharukh wrote:
Thu Sep 19, 2019 10:40 am
its September 19, Have anyone heard from schwab on the list of UCITS ETFs that they support. Thank you.
I logged in today, and saw lots of Ireland-listed iShares ETFs.

Cool!

Trouble is, the prospectus is quite clear that US citizens cannot purchase shares. I also got a hard copy letter today informing me that the UCITS funds are not available to US citizens...so I'm back at square one. Is it really the case now that as an EU-resident American, I have ZERO effective ways to be an index investor?
Thanks for sharing.
Hi,
When you get some time, can you pls share some of the good etf (tickers) that you found to be of worthy (low cost broadly diversified) Thank you.
It depends on your country of residence for what is available. The following shows for the UK. Note: there are no tickers - only ISIN #s such as IE0031442068


iShares S&P 500 ETF USD Dist
Invesco EQQQ NASDAQ-100 ETF
iShares China Large Cap ETF USD Dist
iShares $ Treasury Bd 1-3y ETF USD Dist
Invesco FTSE RAFI US 1000 ETF
Invesco FTSE RAFI Emerging Markets ETF
Invesco FTSE RAFI All World 3000 ETF
Invesco MSCI Emerging Markets ETF
iShares MSCI EM Small Cap ETF USD Dist
Vanguard FTSE All-World UCITS ETF
Invesco Technology S&P US Sel Sec ETF
Invesco Health Care S&P US Sel Sec ETF
Vanguard S&P 500 UCITS ETF
Invesco Industrials S&P US Sel Sec ETF
Invesco S&P 500 ETF
iShares S&P 500 Cnsmr Stpls Sect ETF$Acc
Invesco Financials S&P US Select Sec ETF
Invesco Energy S&P US Select Sector ETF
Invesco Consumer Discr S&P US SelSec ETF
iShares $ High Yld Corp Bd ETF USD Dist
iShares Core S&P 500 ETF USD Acc
iShares Gold Producers ETF USD Acc
Vanguard FTSE AllWld HiDivYld ETF $Dis
Vanguard FTSE Japan ETF $Dis
Xtrackers MSCI USA Energy ETF 1D
Xtrackers MSCI USA Financials ETF 1D
iShares S&P U.S. Banks ETF
Vanguard USD Corp 1-3yr Bd UCITS ETF
Xtrackers MSCI USA Consumer Stp ETF 1D
Xtrackers MSCI USA Consumer Disc ETF 1D
Vanguard FTSE North America UCITS ETF
Invesco NASDAQ Biotech ETF
Xtrackers MSCI Emerging Markets ETF 1C
Invesco STOXX Eurozone Exporters ETFUSDH
Invesco STOXX Japan Exporters ETF
Invesco Real Estate S&P US Sel Sec ETF
iShares $ Treasury Bd 1-3yr ETF USD Acc
iShares $ High Yld Corp Bd ETF USD Acc
Vanguard USD Corp Bd UCITS ETF
Vanguard USD EmMktsGovBd UCITS ETF
Vanguard USD Trs Bd UCITS ETF
Amundi IS Nasdaq-100 ETF-C USD
Amundi IS JPX-Nikkei 400 ETF-C USD Hdg
Amundi IS MSCI USA ETF-C USD
Amundi IS MSCI Estn Eurp Ex Russ ETF-C $
Amundi IS MSCI Em Asia ETF-C USD
Amundi IS MSCI Em Latin America ETF-C $
Amundi IS MSCI World Energy ETF-C USD
Amundi IS EURO STOXX 50 ETF-C USD
Amundi IS S&P 500 ETF C USD

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Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by sharukh » Tue Oct 01, 2019 7:44 pm

typical.investor wrote:
Tue Oct 01, 2019 12:06 am
sharukh wrote:
Mon Sep 30, 2019 8:09 pm
sharukh wrote:
Sat Sep 21, 2019 8:07 am
a__ wrote:
Fri Sep 20, 2019 12:22 pm
sharukh wrote:
Thu Sep 19, 2019 10:40 am
its September 19, Have anyone heard from schwab on the list of UCITS ETFs that they support. Thank you.
I logged in today, and saw lots of Ireland-listed iShares ETFs.

Cool!

Trouble is, the prospectus is quite clear that US citizens cannot purchase shares. I also got a hard copy letter today informing me that the UCITS funds are not available to US citizens...so I'm back at square one. Is it really the case now that as an EU-resident American, I have ZERO effective ways to be an index investor?
Thanks for sharing.
Hi,
When you get some time, can you pls share some of the good etf (tickers) that you found to be of worthy (low cost broadly diversified) Thank you.
It depends on your country of residence for what is available. The following shows for the UK. Note: there are no tickers - only ISIN #s such as IE0031442068


iShares S&P 500 ETF USD Dist
Invesco EQQQ NASDAQ-100 ETF
iShares China Large Cap ETF USD Dist
iShares $ Treasury Bd 1-3y ETF USD Dist
Invesco FTSE RAFI US 1000 ETF
Invesco FTSE RAFI Emerging Markets ETF
Invesco FTSE RAFI All World 3000 ETF
Invesco MSCI Emerging Markets ETF
iShares MSCI EM Small Cap ETF USD Dist
Vanguard FTSE All-World UCITS ETF
Invesco Technology S&P US Sel Sec ETF
Invesco Health Care S&P US Sel Sec ETF
Vanguard S&P 500 UCITS ETF
Invesco Industrials S&P US Sel Sec ETF
Invesco S&P 500 ETF
iShares S&P 500 Cnsmr Stpls Sect ETF$Acc
Invesco Financials S&P US Select Sec ETF
Invesco Energy S&P US Select Sector ETF
Invesco Consumer Discr S&P US SelSec ETF
iShares $ High Yld Corp Bd ETF USD Dist
iShares Core S&P 500 ETF USD Acc
iShares Gold Producers ETF USD Acc
Vanguard FTSE AllWld HiDivYld ETF $Dis
Vanguard FTSE Japan ETF $Dis
Xtrackers MSCI USA Energy ETF 1D
Xtrackers MSCI USA Financials ETF 1D
iShares S&P U.S. Banks ETF
Vanguard USD Corp 1-3yr Bd UCITS ETF
Xtrackers MSCI USA Consumer Stp ETF 1D
Xtrackers MSCI USA Consumer Disc ETF 1D
Vanguard FTSE North America UCITS ETF
Invesco NASDAQ Biotech ETF
Xtrackers MSCI Emerging Markets ETF 1C
Invesco STOXX Eurozone Exporters ETFUSDH
Invesco STOXX Japan Exporters ETF
Invesco Real Estate S&P US Sel Sec ETF
iShares $ Treasury Bd 1-3yr ETF USD Acc
iShares $ High Yld Corp Bd ETF USD Acc
Vanguard USD Corp Bd UCITS ETF
Vanguard USD EmMktsGovBd UCITS ETF
Vanguard USD Trs Bd UCITS ETF
Amundi IS Nasdaq-100 ETF-C USD
Amundi IS JPX-Nikkei 400 ETF-C USD Hdg
Amundi IS MSCI USA ETF-C USD
Amundi IS MSCI Estn Eurp Ex Russ ETF-C $
Amundi IS MSCI Em Asia ETF-C USD
Amundi IS MSCI Em Latin America ETF-C $
Amundi IS MSCI World Energy ETF-C USD
Amundi IS EURO STOXX 50 ETF-C USD
Amundi IS S&P 500 ETF C USD
Very nice. Thanks for sharing. It has my favorite fund
Vanguard FTSE All-World UCITS ETF

Schwab is the way to go, especially with good customer service compared to IB

Topic Author
boglechris
Posts: 18
Joined: Sat Nov 15, 2014 12:59 am

Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by boglechris » Wed Oct 16, 2019 1:00 pm

Just attempted my first trade under the new regime - it's significantly more challenging than in the past.

Firstly, how to find the list of eligible ETFs:

1. Log in to Schwab as normal
2. Hover over the Research tab at the top
3. The very last item in the right-hand column is "Non US ETFs"
4. Click through various terms, and select your country
5. Finally you see the list.

Unfortunately when it comes to trading, it seems it can only be done via the phone brokers, at $50 a pop. No dividend reinvestment is possible either.

I'm frustrated by the additional costs associated with this, which Schwab conveniently forgot to mention in their initial email.

bgreat
Posts: 108
Joined: Tue Jun 25, 2019 11:48 pm

Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by bgreat » Wed Oct 16, 2019 1:11 pm

boglechris wrote:
Wed Oct 16, 2019 1:00 pm
Unfortunately when it comes to trading, it seems it can only be done via the phone brokers, at $50 a pop. No dividend reinvestment is possible either.

I'm frustrated by the additional costs associated with this, which Schwab conveniently forgot to mention in their initial email.
Sounds like a good time to switch to IB. They are perhaps more complicated (also more powerful), but let you trade everything.

Curiously, Schwab apparently weren't very well informed as to which countries are in the EU, and started applying the same restrictions to some non-EU countries in Europe, only to backtrack a few days later after enough customers had complained. (But UK residents shouldn't go hoping for Brexit, as there's some equivalent post-brexit regulation in place that has PRIIPS-style requirements.)

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Stef
Posts: 99
Joined: Thu Oct 10, 2019 10:13 am

Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by Stef » Wed Oct 16, 2019 1:11 pm

Is Switzerland affected now? Anyone checked?

ivk5
Posts: 989
Joined: Thu Sep 22, 2016 9:05 am

Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by ivk5 » Thu Oct 17, 2019 2:08 am

Always passive wrote:
Thu Aug 15, 2019 7:40 am
So what is left, returning home or renouncing the US citizenship? Does it make sense?
I do not live in Europe, so I am not affected, but one never knows what the future will bring.
What are US expats living in Europe doing?
In my opinion the best option for US citizens by far is to have domestic brokerage accounts and maintain a US mailing address if at all possible.

This is what I do as a US citizen living in Switzerland. No issues so far.

Some would also use US-homed VPN for all online access, though I haven’t bothered.

However US citizens already living abroad without such an account already opened may find it difficult to open one. A lot may depend on what your US credit record looks like (does it list the mailing address you want to use) and how well can you demonstrate that your US address is bona fide. This I haven’t tried.

bgreat
Posts: 108
Joined: Tue Jun 25, 2019 11:48 pm

Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by bgreat » Sat Oct 19, 2019 12:31 pm

Stef wrote:
Wed Oct 16, 2019 1:11 pm
Is Switzerland affected now? Anyone checked?
No. Schwab sent Swiss residents the letter, and even blocked them for a day or two, then quickly backpedalled and sent a retraction of the original letter. I suspect whoever implemented it didn't check the map before including Switzerland in the list of affected countries.

User avatar
Stef
Posts: 99
Joined: Thu Oct 10, 2019 10:13 am

Re: Schwab - U.S. ETFs and ETNs restrictions as of September 19

Post by Stef » Sat Oct 19, 2019 2:35 pm

Maybe the mixed it up with Sweden, lol.

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