Vanguard ETFs moving to Crest Depositary Interests

SnowMan

I understand that Vanguard are intending to switch existing ETF shareholdings in the Crest system to Crest Depositary Interests (CDIs). This will happen if the proposal goes through which I assume will happen.

CDIs are UK financial securities that represent stocks traded on stockmarkets outside of the UK. CDIs are issued by CREST on the basis of one CDI for one stock.

Many of the Vanguard ETFs are domiciled in Ireland.

I think this is the relevant shareholder notice:

https://global.vanguard.com/documents/investing/shareholder-notice-scheme-of-arrangement-and-appendix.pdf

Does anyone have any thoughts how this will affect UK Vanguard ETF investors?

One thought I have is could this mean that dividends that are currently paid in foreign currencies where the base currency is say dollars (e.g. VUSA and VFEM) and converted by the investor's investment platform to sterling will be paid directly in sterling if this goes through?

Clearly the CDI will incur foreign currency charges to pay out in sterling, but I'm guessing these will be generally less than the broker/platform charges for this; we know that some of these charges are quite hefty.

And how will the fact that CDIs are traded off exchange affect things?

Any thoughts?

dales1

Yes, I would also like to be able to understand this proposal from Vanguard.