Ishares SEMS ETF delisting

fwor

I just got a "corporate action" notice saying that one of my ETFs has delisted from the LSE, but the note wasn't very informative at all.

Is it fair to assume that the fund will remain listed (under a different name, obviously) on other exchanges? I assume that if the fund were closing altogether the event would be called something other than "delisting".

From what I can see, it was delisted on 20th December, but I didn't seem to get any advance warning - the notice arrived days after the event. I appreciate that there may be differences between events of this type, but in general should I be looking to do anything about this immediately (i.e. today)?

fwor

I spoke too soon - just checked, and after 8 days of showing zero value, Interactive Investor has transferred my holding to a USD equivalent (IEMS), so I don't have to do anything - I'll probably just leave it as it is!

Roseybug

I have (had?) SEMS within an iWeb ISA. I got a corporate action notice dated today:


"
Cessation of Sterling settlement.
Although the shares continue to be listed on the London Stock Exchange, all trades are now settled in USD with no GBP alternative. As GBP settlement is no longer available, we will not be able to facilitate trading in your MSCI EM Small Cap UCITS ETF shares via our ShareDealing service.

If you wish to transfer your shares you will need to establish an arrangement with an alternative broker. Should you wish to do this, please contact our call centre with the details of your chosen alternative broker and we will facilitate the transfer of your shares to them. Please be aware that you will need to have contacted your chosen broker in order to complete their necessary transfer process prior to contacting our call centre. Please note, should you request a transfer, we will not apply our usual transfer fees.

Should you retain your holding of MSCI EM Small Cap UCITS ETF shares, we will notify you on receipt of any further information from the Company."


Can anyone translate for me please? I think it means I have to find another broker that can deal with the USD version, open an ISA, transfer this ETF over to new broker (can I leave my other ETFs with iWeb?), sell it, transfer the ISA back to iWeb?


Or possibly transfer the lot out of iWeb as I'm pretty disgruntled that there was no prior warning of this - I'd have preferred to sell before the transition as I like to keep things simple.

fwor

I don't know iWeb at all, but it ~looks~ as though they are saying that you can leave it where it is, but you can't sell it with them. So... if you were planning to transfer your complete ISA holdings away from iWeb at some point in the future, it may be worth leaving as it is and transferring the lot out together.

If you're planning to stay with iWeb then it probably makes sense to transfer out and sell, unless it's a core part of your portfolio (it wasn't in my case, so selling would not have been an issue for me).

I agree that it's frustrating to receive the details of the action after it's too late to sell while the fund was still tradeable in its GBP form (as happened in my case too)!

Roseybug

Thank you fwor.


SEMS was a minor part of my ISA. I just don't want it to disappear into the ether. I'll speak to customer services at some point in the new year, and report back, in case anyone else is in the same position.

ivormonee

This is puzzling me because iWeb do actually hold USD (trading currency) ETFs on their platform that customers can hold in both their dealing account and their ISA. In fact, they hold the ETF of the non-Sterling variety over the Sterling version in some cases. As an example, if you look on iWeb's platform and do a search, you will discover that the Source Gold ETF traded in USD is available (and customers hold it in their portfolios) whereas the very same ETF traded in GBP is not available to trade at all, dealing account, ISA or SIPP. It might be worth giving them a call for them to clarify their email which I don't fully understand either. Perhaps report back here with the outcome of your findings.

tg99

I’ve noticed that my ishares Brazil etf is now showing as n/a in my HL Account so looks like this has also been delisted (can now only see a USD version available if I search for it). Not heard anything from HL about this though.

Roseybug

My iWeb ISA holding SEMS has now reappeared in my list as IEMS with a valuation.

The online trading seems to be disabled, but it comes up with a telephone number to call instead. I don't need/want to trade at present, so I'll leave it alone and cross that bridge when I get to it.

I get the impression there are a lot of transitions and changes afoot as the new financial regulations bed in, so it may take a while until it all settles down.

firestone

i am no good at links but if you google Money observer from yesterday(among others i guess) using "brokers delist investment trusts and ETF's due to new rules" it may be the reason you are looking for

Thrugelmir

MiFID II came into force on the 3rd January 2018. The implications are huge.

ivormonee

MiFID II has nothing to do with the delisting of SEMS. Equally, it has nothing to do with platforms (HL, BestInvest, etc.) removing investment trusts and ETFs from their platforms - this is to do with the failure of trust managers and ETF providers to produce the necessary documentation in the correct format under new rules known as PRIIPs (packaged retail insurance-based investment products) which came into effect around the same time as MiFID II.

The removal of SEMS from iWeb has nothing to do with iWeb. The ETF was delisted from the LSE by the provider, iShares. As a result it simply does not exist anymore, anywhere. The alternative is the USD denominated IEMS, which continues to be listed on the LSE.

Like I said in post #6, iWeb do hold USD denominated ETFs on their platform; the reason SEMS got removed is nothing to do with its trading currency. I expect that iWeb may start allowing holders of IEMS to start to be able to trade this ETF at some point. They might just be in the process of setting up the facility to do so. I see no reason why they wouldn't and would be surprised if they didn't.

As far as other platforms taking other investments off their platform is concerned, some of those will be added back once the relevant documentation has been provided to them; many won't and will remain permanently off the platforms. However, this will not, or should not, affect the vast majority of UK investors as it is unlikely they will have any holdings in these - they are nearly all US domiciled trusts and ETFs and/ or non UCITS compliant.

As a side note, it will, however, be detrimental to expatriated US citizens who will face major tax disadvantages as a result of the changes, the details of which are beyond my scope.