Swiss Investors Will Lose Access to US-Domiciled ETFs

Posted on

(Disclosure: Some of the links below may be affiliate links. For more information, read my disclosure.)

Swiss investors will lose access to US-domiciled ETFs

Since the beginning of the year, I cannot buy Exchanged Traded Funds (ETFs) domiciled in the United States from my broker, DEGIRO. Since my current portfolio is mostly invested in Vanguard Total World (VT), this is a big problem for me. I can now only sell these ETFs, not buy them anymore. That means that the next time I will have some money to invest, I cannot invest it anymore as I want. This is bad news for Swiss investors.

This is due to new regulations that will come into play. These regulations already affected all European investors since 2018. But Switzerland was not affected before. We are going to see what changed. This is based on several European and Swiss laws. These laws are sad news for European investors and Swiss investors. I am not a legal expert at all. So this is only my interpretation of these laws. If I am wrong or I missed something, please let me know!

In this post, we are going to see why this is happening. And we are also going to see what are the different options for us. There are several possible solutions to this issue. But none of them is perfect as we will see.

PRIIPs Regulation for European investors

It all started in January 2018, when PRIIPs regulations entered into effect. PRIIPS is a part of the bigger Markets in Financial Instruments Directive (MiFID) II law. PRIIPs or Packaged Retail and Insurance-based Investment Products is a regulation that is supposed to protect investors. I am not going to go into details about the law. I am only going to focus on the part that is the problem now. These regulations enforce that all funds provide a so-called Key Investor Document (KID). This document must give some information about the funds and some standardized advice and recommendations to investors. Supposedly, it was made to make sure that all investors have access to all the necessary information to invest in these funds.

When this law came into force, U.S. fund providers did not provide any KID document. And therefore, brokers stopped offering them to their European customers. For these fund providers where most of the clients are from the U.S., providing these documents is not a priority. This is too costly for little advantage. For instance, Vanguard already stated that they will not comply with these regulations. That means that for European customers, the only option is to use European ETFs.

This is exactly what the European Union wanted. This law has nothing to do about protecting investors. This is only a strategy by European fund providers to force European investors to invest in their sub-par funds instead of going with the better U.S. funds. Instead of providing better funds, they simply forced people to use their funds. This is really sad that something supposed to protect the investors is actually making them a disservice by forcing them to invest in poor products and reducing their investment options.

PRIIPs regulations are enforced to people from the European Economic Area (EEA). And Switzerland is not part of the EEA. Therefore, Swiss investors were not affected by this problem last year.

So why I am talking about this issue? DEGIRO just stopped offering these ETFs to its Swiss customers. I can still sell my positions. But I cannot buy any more of these ETFs. This is (probably) because of a new set of laws that will soon come into force. Let’s take look at the Swiss laws now.

FinIA/FinSA for Swiss investors

Swiss and EU laws for investors
Swiss and EU laws for investors, Source: pwclegal.ch

In 2018, the Swiss government voted two new laws: Financial Services Act (FinSA) and Financial Institutions Act (FinIA). Once again, I am not going to go into details of these laws. They are more or less a copy of the European laws for Swiss investors. They also enforce each fund to offer a Key Investor Documented (KID) to all Swiss investors. So, they cause exactly the same issue to Swiss investors that PRIIPS caused to European investors.

Once again, I have the same point of view on this law as I have on the other one. It is just a crude attempt to force people to invest in bad funds and block the U.S. funds instead of focusing on improving European funds.

This new set of laws will enter into force on January 1, 2020. Starting from this date, Swiss investors will not be able to invest in non-compliant ETFs and funds. This basically means that Swiss investors will only be able to invest in Swiss and European funds.

Wait a minute, that is still giving us one year, no? Yes, it should indeed give us one year before these regulations come into force for us. So why did DEGIRO already enforce this? It seems that DEGIRO decided to start to enforce them early for reasons of their own. Supposedly, they said that they believe this will protect the investors.

I think they are doing that simply to simplify their systems to have the same set of offers for all European. I think this a bad move on their side. There has been no communication whatsoever about this. One morning, my products were simply closed with the message “Product is closed for the client”. This is really bad handling of the situation in my opinion.

So what can we do? I see a few solutions to this problem. Let’s see each of them.

Solution 1: Change broker?

The first solution would be to change to another broker. I already compared DEGIRO and Interactive Brokers (IB) in the past. Interactive Brokers is actually cheaper than DEGIRO when you have more than 100’000 CHF. I was already considering moving to IB once I got enough money to waive the safe custody fees. However, it may be a good time now to switch.

I have talked with several Swiss users of IB and they confirmed me that for now, we can still invest in US-domiciled funds. So I could transfer all my funds (or the money) to IB and continue investing.

However, as the two Swiss laws become applicable in 2020, that could be only a single year when this is available. After that point, I may have to find another solution anyway. Interactive Brokers already stopped offering these ETFs to European investors last year, in accordance with the law. So, I think they will follow the law in 2020 and stop offering these to Swiss people in one year.

On one side, I am wondering whether I should change to a new broker if I may face the same issue one year later. On the other hand, I have already shown that IB is cheaper than DEGIRO for me in the long-term. Moreover, I am not really satisfied with DEGIRO’s communication on that problem. So, I think I am going to change my broker from DEGIRO to IB in 2019.

Solution 2: Change funds?

Another solution is to comply with the new dumb law and switch to European-domiciled funds. We are not going to lose access to U.S. stock market indexes, only U.S. funds. There are equivalent European tracking the same indexes. However, this is not a very good solution. European funds are more expensive and smaller. And there is less choice for funds around.

For instance, the fund that I will really miss is Vanguard Total World (VT). This fund replicates the performance of the entire world market. It manages around 17 billions of dollars of stocks. And it has a Total Expense Ratio (TER) of 0.10%. It is made of more than 8000 different stocks. This is a really great ETF.

On the European side, there is no full world ETF, at least not in acceptable TER range. The closer they get is with Developed World ETF. But that still means it is necessary to own several ETFs instead of a single one.

If I had to choose one European Developed World ETF, I would probably go with iShares Core MSCI World UCITS ETF. It has around 1600 stocks in 23 developed countries and manages more than 14 billion dollars. It has a TER of 0.20%. That is twice more expensive for an inferior fund. It is not really bad of course. But it really pales in comparison to VT.

If I were to switch to the European equivalent of VT, I would probably have to hold two funds. And they would be more expensive than VT. So, I am not really convinced by this solution. Another thing that shows that these laws are not doing anything good for the investors.

To learn more, you can check out the entire ETF Portfolio with European Funds I would have used.

Solution 3: Use several funds?

The next solution I am thinking of is to use European funds but not use a World fund. It is actually possible to replicate the performance of a world fund by holding several region funds. Of course, it is still better to own the world fund if there is a good option for it. But in Europe, there is no great option of a world fund.

The Vanguard Total World (VT) ETF is composed of stocks from these regions:

  1. North America: 58.40%
  2. Europe: 18.60%
  3. Pacific: 13.30%
  4. Emerging Markets: 9.40%
  5. Middle East: 0.20%
  6. Other: 0.10%

I think we can safely ignore the last two ones and still replicate accurately the performance of the world market fund. That means we would need to hold four funds. You need one U.S. ETF, one Europe ETF, one Pacific ETF and one Emerging Markets ETF. If you really want to have better accuracy, you could also add Canada that is normally included in North America. Or you could find a North American ETF. But I did not find a good one.

It is not a great solution, but this would still beat a world ETF from European provider. It would definitely be a better TER. You can find U.S. ETF around 0.07% in Europe. And since the U.S. is about 55% of the VT ETF, this would definitely bring down the global TER.

The problem is that you have four funds instead of one. I think that simplicity should be preferred in a portfolio. This may make rebalance a bit more difficult as some funds may underperform or outperform the others. And you may have to change the allocations if there is a shift in the economy in the world. But I still think it beats having a 0.20% TER fund.

Solution 4: Be a professional investor

Level of protection of Swiss investors by FinIA/FinSA
Level of protection of Swiss investors by FinIA/FinSA, Source: www.pwclegal.ch

You may have noticed that in this post, I have talked especially about retail investors. This is because both the European laws and the Swiss laws are considering differently professional investors and retail investors.

In fact, they only apply to retail investors. So, if you are a professional investor, you can still use the good old U.S. funds! Obviously, I am not a professional investor and I doubt that you are either. However, there is a kind of loophole in the Swiss version of the law. It states that certain high net worth individuals may choose to opt-out of the law and be treated as professional investors. There is also this loophole in the European version of the law. But the conditions are slightly different.

In the law, a high net worth individual is described as one that:

  • Either declare that they understand the risks of the investment by virtue of their qualification and have at least 500’000 CHF.
  • Or dispose of at least two million CHF.

Obviously, this is a loophole for the rich. They do not want to hurt the rich that are in the European Union. Another stupid part of this law. I am far from filling these conditions yet. But it is not rare in the personal finance community to see people with more than 500’000 CHF. They could apply to opt-out and be considered as professionals investors.

Now, I do not know how difficult it will be to actually opt-out. And I do not know if this will make you qualified as a professional investor for taxes as well. In which case, capital gains will be taxed. That is something to consider. But it could be a very good option for people who already have a high net worth. This is something I may do in a few years.

Conclusion

This is really sad news for European and Swiss investors that want to invest in U.S. domiciled funds. The best alternative is to invest in European funds. But they are more expensive. And there is also less choice.

I really think that the people who crafted this law did not care about Swiss investors at all but only about European fund providers. There is no doubt that this will profit European funds. Maybe in the future, it will increase their quality and price. But I am not very confident about that. It is a local lockdown of the market. Instead of protecting the customer, they are locking him into inferior choices.

I do not yet know exactly what I am going to do now. I did not really like how DEGIRO handled this issue. First of all, I do not see why they enforced this one year in advance. Moreover, they could have communicated to their customers before enforcing those new limitations.

So, I am thinking that I will open an Interactive Brokers account sooner than I thought. My plan was to wait until I had 100’000 CHF invested to move to IB. But I am starting to believe it is better to move earlier than that.

That will give me one year where I can still invest in good funds. After that one year, I will still be able to hold these funds and invest in the European equivalents for the future. I should be able to reach 100’000 CHF invested in a bit less than one year. After that point, my fees will be very low. I think it is my best option. Of course, I will keep you up to date about what I will do and how I will do it!

To see an ETF Portfolio without any U.S. ETF, take a look at my European ETF Portolfio.

Update: I have moved my portfolio from DEGIRO to Interactive Brokers

What about you? What is your strategy when we will not have access to U.S. funds anymore?

About the author

Mr. The Poor Swiss

Mr. The Poor Swiss is the main author behind thepoorswiss.com. In 2017, he realized that he was spending more and more every year, falling into the trap of lifestyle inflation. He decided to cut on his expenses and increase his income. This blog is relating his story and findings. In 2018, he saved more than 40% of his income. He made it a goal to reach Financial Independence. You can send Mr. The Poor Swiss a message here.

39 thoughts on “Swiss Investors Will Lose Access to US-Domiciled ETFs”

  1. I went for option 1; moved to IB and bought VT yesterday, but kept my VT shares on Degiro instead of transferring/selling them.

    Let’s see what happens next year regarding this.

    1. Wow, that was fast ajPT! Well done!

      For now, I think I will do the same as you. For now, there is no point in selling shares in DEGIRO since I do not have enough anyway to reach the 100K limit of IB.
      Even in one year, we probably can hold the shares in both accounts anyway. But the problem will be to find adequate replacement funds.

      Thanks for sharing and stopping by!

      1. I assume I will do the same -> Open IB Account and invest in VT this year and leave the rest on Degiro for now. To be honest I was mainly on Degiro because of the free ETFs and now this seems not interessting anymore (or at least at the moment).
        Another point why I don’t like the switch to European ETFs is to invest in EUR at the moment. I would rather stay in USD or CHF. This opinion might be subjective but I still feel better with it.

        1. I was also on DEGIRO for the free ETFs and the very cheap fees. But now that they do not have access to very good ETFs in the free list, I do not think it is a big advantage anymore. Moreover, I was considering getting an IB account anyway since my company will send me some USD when I sell my ESPP shares and RSUs. And DEGIRO only accepts one account.

          I have to agree with you about EUR. I do not feel comfortable holding too much EUR. I prefer some USD for now. Like you, it might be subjective as well.

    2. I hope that over time some US ETFs will have KID but I have seen none so far. I don’t know why people think that IB is different. It is not. The only solution to continue investing in US ETFs is to have an account in the US. Good luck with that, as the US has long closed access to its banks by foreign investors in order to not have to deal with the European regulatory madness. At the moment the only solution is to be classified as a professional investor. Good luck if you are investing your kids savings. Every regulation in Europe is a balance between hurting and protecting the financial industry. The result is that it is neither good for the industry nor for the consumers. Regulators should all be fired.

      1. Hi Peter,

        I also hope that some U.S. ETFs will have KIID but I doubt it. They do not really care about that. This is especially true since the big ETF providers such as Vanguard also have European ETFs. So I guess they want people to invest in these instead.

        I don’t think that IB is different. However, according to some people, the law for Switzerland is different than the law from Europe and could make a difference. But I honestly do not know if that’s true or not.

        I completely agree with you about the regulations. They have no good purpose for people. They do not serve anyone correctly :(

        Thanks for stopping by!

  2. I really do not understand why the big US ETF’s do not simply comply. There must be more than only translating the KI(I)D or a few other documents in local European languages. Let’s be serious, translating a 2-pager in another language costs Vanguard or other billion-dollar funds 100 dollars in translation expenses. Why is everyone repeating that ‘it is too costly, they do not want to do this investment’? Even if it was about more than one single document, or having one of their lawyers investigate the formalities for compliance to European regulations, that would be peanuts for these funds if they can keep or gain additional funding.
    The fact that we as european investors have to search for alternatives is however completely to the point and explained very clearly in your post! I wrote my first post of a new blog on exactly the same topic, maybe it can give some additional help or insights: http://www.rumoursonlife.com/investing/index-investing-europe/

    1. Hi Mr. Rumours,

      I do not think there is only the translation issue. You need to first create this document and then translate it in the language of each investor you want to work with. And there may be lawyers involved as well.
      Nevertheless, I think you are right and it is not only about money. Some of the big U.S. providers also have European funds. For instance, Vanguard has funds in Europe and they have higher TER than their U.S. funds. So I guess that they prefer European to invest in those funds and pay more rather than invest in their U.S. funds and pay less. This is probably true for most fund providers.

      Nice post. I did not know your blog. Good to have one more European FIRE blogger in my RSS feeds!

      For this year, I think I will still be able to invest in U.S. funds via Interactive Brokers. But next year, I will have to choose one (or several) European funds. It’s a pity!

      Thanks for stopping by :)

  3. Where can I find TER per ETF?

    I’m not national swiss, so I’m investing in European ETF. I’ve been investing mainly in stocks, and after reading your blog I’ve bought some shares of Vanguard FTSE All-world ETF.

    1. Hello Hi,

      You can find TER of European ETFs on justetf.com for instance. Or if you know the exact name of the ETF, you can go to the provider website and they will give you the TER for each of their funds. Normally, it is not an issue to find the TER. For which ETF do you need the TER?

      Thanks for stopping by.

      1. I’ve checked TER, in your recomendation webpage justetf.com, for Vanguard AllWorld IE00B3RBWM25. It’s my first investment in ETF.
        Thanks!

  4. Hi there, love your blog! Been investing with DeGiro since the summer. Since I’m from Netherlands, we already have this law since 1st of Jan 2018. I choose to start investing in Vanguard FTSE All-World UCITS ETF (ISIN: IE00B3RBWM25), which is also reflecting all the world while still having no transaction fees. Maybe this can also be an option for you!
    M

    1. Hi M @ Radical FIRE,

      Thanks :)

      At least in Europe, the law was implemented on time, not in advance like for Swiss in DEGIRO ;)

      Vanguard FTSE All-World ETF is a good ETF. Unfortunately, it has a TER of 0.25%. This is 2.5 times higher than VT. Just with this, the transaction fees are less important than the TER. That is why U.S. domiciled funds are very interesting.
      However, I agree that it is the best All-World fund out there. Once I have to choose from only European funds, I will either choose it or use several funds instead of one. This may be worth the trouble to save on TER.
      At least, I should have one year to decide :)

      It seems these comments help me complete my feeds list :) I will check out your blog now!

      Thanks for stopping by :)

        1. Hi,

          Are you talking about withholding dividends?
          It’s true that there is some difference. On U.S. funds you can reclaim half of the withholding (so you lose 15% in total). If you have Swiss funds, the withholding is large (30-39%) but is counted towards income tax. However, I believe that European funds holding U.S. shares will also get a tax by the U.S. for the dividends and this is before you see anything. In the end, I do not thing there is such a large difference. But I am not an expert on the subject at all!

          I will have to spend some more time thinking about that in the future.

          Thanks for stopping by

          1. On US funds you can reclaim half of the withholding _of the US dividends_, so the US funds are strictly better _for US stocks_. But when it comes to foreign dividends, the tax withholding are gone in both cases,* but the tax rate depends on the fund domicile. Let’s say a fund holds some German stock that pays dividends. If the fund is based in the US they will likely have to pay higher tax on this German dividend than an equivalent fund based in Ireland.

            Checking all of these tax treaties is a lot of work that I haven’t done. But the common wisdom says it that Ireland has one of the best set of such treaties, followed by Luxembourg. In any case, these differences are likely more important than a 0.15% difference in TER.

            (*) Swiss companies are a special case here. If you invest in Swiss companies via a Swiss fund, there will be no tax leakage.

  5. This really screwed me over and, as you point out, really horrible job in communication by DEGIRO.

    I am far away from the 100k so moving to IB would be a big bump in fees costs for a few years. This would be an acceptable costs if I knew I could invest in US ETFs for some time. But if IB is also going to remove those ETFs from the available pool for european investors in 1 year then it’s really not worth the effort and the trouble.

    I don’t know whether opening up an IB account and swallow the 120CHF yearly fees with the hope I can keep buying US ETFs for more than just the 2019, or staying with crappy DEGIRO for the low-to-nonexistant fees and pay the extra TER.

    1. Hi Mario,

      Yes, I completely understand your frustration. I still do not need why they moved forward with this law one year in advance. And especially without a mail or a notice in the application.

      If you are far from reaching 100K and are using a Basic account from DEGIRO, I think you can safely stay with them and use European ETFs from now on. It sucks, but it is not that bad. You can still find ETFs with reasonable TERs (below 0.2%). It will not be as good as VT. But we can live with that.

      Personally, I am considering changing to IB for several reasons. First, the reasons mentioned in this post. Second, DEGIRO does not allow me to send money to them from another account than my main bank account. And I will soon receive money from shares from my company that will arrive in USD. And IB is a very good solution to receive this money without fees. Finally, I am using the Custody account at DEGIRO. And I realized this is actually more expensive than IB. Since I will should reach 100K in the next two years, I think my best bet is to move to IB. But this may not be the best bet for everyone.

      Let me know what you decide!

  6. Probably it is time to think about real investing. Since one door seems to be closing, you may open another which delivers steady income and you will have full control of costs (no fees, AKA TER). It is nothing new when it comes to this subject, I am referring to dividend stock, but by reading your blog I see that you are not the fan of it. You are more believing in funds, which is great, but those are only one part of an income focused portfolio. No worries, I am not selling anything. I just thought I share some words and you go as you like(or dislike). I am also new to the thing, just started some years ago and it seems to be working fine. So yeah, just think about investing in US dividend stock paying dividend since long years or even decades and they increase or at least dont cut their paying behavoire since long. It is not that easy to find them and even not easy to buy at the right entry but it is possible.

  7. There are brokers in USA who allow ETF trade for European customers. Drivewealth and Tradestation have been suggested. There used to be more but some of them have stopped serving European customers.

    1. Hi Finn,

      I did not know about DriveWealth and Tradestation. THat’s good if they still take European customers. As you said, there is less and less choice for European investors.

      Thanks for the information!

      1. You are welcome.

        I heard about these two brokers from a Reddit thread, where a Romanian investor was writing he could not buy US ETFs any more. He mentions later in the thread he had contacted the two brokers in August 2018 and they are available for Europeans: https://www.reddit.com/r/investing/comments/8boldk/help_looking_for_new_broker_for_us_etfs_access/

        I have had an US brokerage account before because of lower trading fees. This was when Swedish broker Nordnet had raised their US transaction fee to an unbearable level USD 15. The new broker was mostly cheap but withdrawing with international wire transfer was USD 40. Naturally they wanted the funding in USD into an US bank account. Funding the account was expensive because banks ripped me off with at least 1% forex and 14-20 EUR money order fees.

        Using another broker Lynx (or IB) with Euro account and to do the forex from there and then do US wire transfer eventually solved the funding part. With withdrawal I would have needed US bank account with ACH to lower the cost. Instead I did the withdrawal only once when closed the account. I closed the account because the introduced monthly fee.

        Then there is the US estate tax. There could be something different in the tax treaty between Switzerland and USA. If not, the US tax law applies and estate tax will have to be paid when foreign investor dies. Wikipedia gives impression it is about 0.5%, so not the end of the world itself but somebody still has do the paperwork. https://en.wikipedia.org/wiki/Estate_tax_in_the_United_States

        1. We also have the estate tax from Switzerland as well.

          Wow, 15 USD per transaction is pretty bad indeed. It seems like the Swiss price. This is terrible.

          It’s very difficult these last few years to find a good broker for European. Since the new law, no broker will offer U.S. ETFs to European customers. We are safe one more year in Switzerland, but it may happen too for us next year.

          We’ll see how that goes!

          Thanks for sharing your experience!

  8. How do brokers identify that you are European investor? Do they look at your nationality, citizenship or country of residence? If your wife opens an account will US-domiciled ETFs available for her?

    1. There is thread “PRIIPS KID on IB”: https://www.elitetrader.com/et/threads/priips-kid-on-ib.322160/

      Page 10 mentions Hong Kong and Australian residents hitting the same US ETF restriction. Turns out they had opened their accounts with IB-UK and then returned back to home. To resolve the problem they could just close the IB-UK account and open a new IB-HK account.

      To me this looks like IB does not use strict nationality filter and just blocks all IB-UK accounts.

    2. Hi Aleksei,

      That’s an excellent question. As Finn pointed, I do not think they look only at nationality. I would say they look more at your country of residence. But I am really not sure about that.
      That’s a good point about my wife. Maybe she could open an account based on her nationality! This will be worth trying if we get locked out of U.S. ETFs.

      Thanks for the suggestion!

  9. thank You for your extensive article on this topic. I am thinking of another solution. Would it be possible to open an LLC on US soil and invest in the name of a US conpany directly with an US broker. Does it seem feasible to you?

    1. Hi,

      You’re welcome :)

      I think it would be possible indeed. However, I have no experience on the subject.
      But I do not think it would be worth it. Unless you plan to invest a lot of money. You will have to start an LLC on US soil. For this, you may need an address in the U.S., probably a PO box. Then, you need to declare it in the U.S. It is possible then that you to obey to U.S. laws for investments.
      It seems like a lot of trouble and risks.
      I think it is still preferable to pay the price of European ETFs.

      Thanks for stopping by :)

  10. Luis Pazos [*] has mentioned another loophole, which are short puts on the ETF in question. As far as I understood, trading those does not fall under the MiFID II regulations, but when they are exercised, the shares would nevertheless be booked to your account. However, I don’t know about additonal risks (put not exercised, for example) and fees, so I hope somebody with more knowledge will write more about it at some time :)

    [*] Link (in German): https://nurbaresistwahres.de/faktencheck-ein-jahr-mifid-ii

    1. Hi Jan,

      Yeah, I have heard of this loophole as well. Unfortunately, I am not an expert in puts. I do not think it would be worth it to use that option honestly. It seems too complicated and too much on the edge of the law to be considered.
      But if someone has knowledge or experience on that, I would really like to hear it as well!

      Thanks for sharing!

  11. Hi,

    Wondering one thing about currently purchasing US-based ETFs with IB while we can : in a year, will they make us sell those ETFs without giving you us choice (which could be bad timing) or can you just keep them once you’ve invested in them ?

    1. Hi Nicolas,

      They will not make us sell them no! We just won’t be able to buy more. But we are free to keep them and sell them whenever we want.
      Otherwise, it would be a bad idea to keep investing in them indeed!

      Thanks for stopping by!

  12. This is going to be a stupid question but I cannot seem to find the answer anywhere. Can a EU citizen still buy Swiss traded ETFs? Because for example a lot of the iShare ETFs that are associated with SIX come up with distribution only in Switzerland. So if I am an EU citizen can I at least still purchase ETFs from Switzerland in CHF?! I can see that Swiss nationals can buy all other European ETFs but is the same also true the other way around?

    1. Hi Miguel,

      That’s not a stupid question!

      I have no way of testing, but I am almost sure it works both ways. There is a current law saying that the Swiss stock market is equivalent to the European Stock Market. Hence, EU investors should have access to CH funds.

      However, CH funds will still have to obey the stupid laws of the EU (PRIIPS/MiFID). If a Swiss ETF does not follow these rules, it will not be available to EU investors. I would not be surprised if some of them are still not available.

      If you have a broker account, I recommend you to look for some Swiss funds from UBS, Credit Suisse or iShares and see if they are there.

      Thanks for stopping by :)

  13. Thanks for the article! With these new laws for Switzerland not being able to buy US ETFs, that may also result in swiss investors losing SIPC coverage for their securities? And that’s supposed to increase protection of investors*!? If I understand correctly, SIPC covers cash and securities with IB for foreign investors, but securities/stocks have to be recognized/registered by SEC to be covered. This does not seem to be the case for the ETFs I’ve looked up so far (e.g. VUSA, bunch of UCITS ETF, etc.) while VOO, VT seem to be…

    I’m not super sure about all of this as I’m relatively a newbie in the field, so I’ll be glad to read your comments. Cheers!

    https://www.sec.gov/fast-answers/answerssipchtm.html

    Link/info at the bottom to check SEC-registered ETFs.
    https://www.finra.org/investors/protect-your-money/ask-and-check

    1. Hi Oliver,

      I don’t think that is the case. I am not an expert in U.S. laws at all. But here is what I understand. Since IB is a SIPC-broker, all securities are protected up to 500K USD. The only exception is for commodity contracts. They are only protected if they are registered at SEC.

      So I don’t think this new law will change our protection.
      If you want to be sure, you need to contact SIPC or the SEC.

      Having said that, this law is still really bad for customers and only protects the interests of large banking companies that already have more than enough money.

      Thanks for stopping by!

Leave a Reply

Your email address will not be published. Required fields are marked *