PRIIPS KID on IB

Discussion in 'Retail Brokers' started by d08, Jun 17, 2018.

  1. d08

    d08

    Only for EU peeps.

    Anyone else seeing trading rights for all ETFs, futs and options removed?

    "Ineligible for trading This product is currently unavailable to clients classified as retail clients. Note: Individual clients and entities that are not large institutions generally are classified as retail clients. There may be other products with similar economic characteristics that are available for you to trade. See: https://kb.clientam.com/article/3203"
     
    nzbryant likes this.
  2. JSOP

    JSOP

    Yes for some reason this is all of sudden propping up everywhere in Europe. The only solution is change brokers.
     
  3. d08

    d08

    So effectively ETF trading has been banned for retail customers?
     
  4. JSOP

    JSOP

    Depending on the security. If the security's KID has been submitted then yes you can trade it if not no if you are a retail trader.
     
  5. It is ABSOLUTELY PREPOSTEROUS. Enough to get me back on Elitetrader after a decade to see if anyone else is having the same issue. I have traded on IB every day for 14 years and love it completely until this.

    ZERO communication from IB. No messages, no emails, nothing. They just block ETFs from European traders.

    I was just on the phone with them and a chat line. If there is a KIDS (info sheet) one can trade it. I am sure SPY and all the large ETFs have info sheets but IB just blocked them all.

    I am spewing.

    There would be thousands of traders whose ETF based systems just got killed overnight. With no warning.
     
    CSEtrader likes this.
  6. Can trade European made ETFs but they usu, have higher fees and are lliquid
     
  7. Some articles on the topic:
    https://www.bloomberg.com/news/arti...t-to-europe-s-etfs-as-spy-no-longer-an-option

    https://www.justetf.com/uk/news/etf/us-domiciled-etfs.html

    https://www.jdsupra.com/legalnews/are-you-kid-ing-new-eu-rules-require-38108/

    I've talked to IB:

    1. If you are dealing with IB-UK (not IBLLC-US) then you can NOT buy these products anymore.
    2. You CAN still hold them.
    3. You CAN still sell them.

    1. There is the possibility to switch to Professional Status -- But it does not appear they have paperwork ready for this.
    2. There is the possibility to switch to 'Sophisticated Investor' status (Account size > 500k) -- But they do not have paperwork ready for this.
    3. If you switch to a non-EU address, you also need to switch from IB-UK to IBLLC-US (which requires opening a new account as the two entities are quite separate)

    Also of note:
    You can still trade options for ETFs, and in the event you are ASSIGNED options it will be auto-liquidated instead of ending in your account (effectively, cash settled at presumably close price or perhaps the after-hours price or pre-market price, it was not made clear). (This should make the argument of options in SPY vs SPX interesting).

    So, effectively, for the moment: If you are in the EU you can not trade these products anymore.

    I am NOT sure if this is restricted to IB only (any non-IB EU/UK based brokerage users out there with feedback)?

    I am NOT sure if KIDs have actually been produced for these ETFs and simply not displayed on IB (anyone with more insight into MIFIID know how to actually check this?)
     
  8. Thanks. I got the same messages from IB (they were firm and clear), but I did not ask about becoming a "professional" investor. They do note on one web page that EUR500,000 is needed.
     
  9. It is not restricted to IB. Some did it already, some have yet to do it. All will have to comply at some point.

    What really p**ses me off is the total lack of communication from IB. Just blocked. And I had a new system to run long term, now I can not.
     
  10. I do agree that the lack of warning/heads-up is rather unprofessional. And it would save them the headache of answering so many questions today/this-week. Also, no heads up for those of us with > 500k balance, so it's not they only ignore the smaller investors.
     
    #10     Jun 18, 2018
    nzbryant likes this.