iShares to settle through EuroClear instead of Crest leaving UK shareholders with CDIs

bowlhead99

EdGasketTheSecond said:

Edit: The Vanguard document does not mention CDIs at all so perhaps they are doing something slightly different or not based in Ireland.

I don't know what you mean by 'does not mention CDIs at all' because a CDI is a CREST Depositary Interest, and CREST Depositary Interest is defined up front in the definitions and used later in the explanation of what is going on. 

 page 5 and 6 and 7 of the document explain their move to an ICSD model from the current CSD model ; and that people who currently hold shares directly can move their shares currently held in CREST to be beneficial ownership via the ICSD if you have an account with them, or continue to hold beneficial ownership in CREST through Euroclear UK&I via a CDI, because Euroclear UK&I already holds an account with the ICSD.

EdGasketTheSecond

I had a reply from WisdomTree, the metal funds are unaffected:

"To-date the transition only applies to the WisdomTree Irish domiciled investment platforms (UCITS Funds and WT Multi Asset issuer) which are authorised and regulated by the Central Bank of Ireland.

  PHSP, PHGP, PHAU, PHAG and GBS are all domiciled in Jersey and will therefore, continue to settle the same way."

EdGasketTheSecond

bowlhead99 said:

EdGasketTheSecond said:

Edit: The Vanguard document does not mention CDIs at all so perhaps they are doing something slightly different or not based in Ireland.

I don't know what you mean by 'does not mention CDIs at all' because a CDI is a CREST Depositary Interest, and CREST Depositary Interest is defined up front in the definitions and used later in the explanation of what is going on. 

 page 5 and 6 and 7 of the document explain their move to an ICSD model from the current CSD model ; and that people who currently hold shares directly can move their shares currently held in CREST to be beneficial ownership via the ICSD if you have an account with them, or continue to hold beneficial ownership in CREST through Euroclear UK&I via a CDI, because Euroclear UK&I already holds an account with the ICSD.

I mean CDI's (the letters CDI) do not appear in the document. It does  not say in black and white that ETF shareholders will lose their shares and get CDIs instead as is the case with iShares. That might be the overall implication of the document but as I don't hold Vanguard products, I have not spent time trying to decipher the document further.

EdGasketTheSecond

Broker 2 claiming I won't effectively see any change in the way it is held on the platform. I am trying to clarify if that includes a live price as CDI's are 'off-market'.

bargainhunter888

So what etfs would you go for as an alternative? I don’t understand why this would be an issue for Ireland etf vs a Luxembourg one? Surely if everyone is worried we will see a massive sell off of swda for example 

Alexland

bargainhunter888 said:

Surely if everyone is worried we will see a massive sell off of swda for example 

I doubt many people are worried.

masonic

I can see why this might be a problem for day traders, but for those making long term investments, being able to get a live price and execute immediately is probably not a big issue, if that's actually the case. I hold an iShares ETF with two different brokers and I wouldn't have known anything was changing if it wasn't for this thread.

2unlimited91

I don't believe that there won't be live pricing for CDIs. Instant trading is (for better or for worse) a big reason why ETFs are so popular. iShares' aim is to keep their ETF business going, not to drive away business.

(I can't confirm this from the case of Vanguard's Irish ETFs, because their conversion to CDIs was apparently completed on 8 November 2019, and I don't think I've wanted a live price on them more recently than that. Could try getting a test live quote when LSE is next open.)

The other concern mentioned is the phrase "off-market". I don't know what that means in this context (or even if it's accurate).

I know there are various different segments on LSE, and for all I know, ETFs might come under a different segment after conversion to CDIs. I doubt that matters.

Liquidity does matter. So long as there's no barrier to everybody currently trading the ETF continuing after the switch, I can't see why liquidity would be affected.

In conclusion, this all seems like a bunch of fears based on not understanding what's happening. There's nothing wrong with seeking a better understanding, but no need to assume the worst, especially when that wouldn't be in iShares' own interests.

masonic

2unlimited91 said:

(I can't confirm this from the case of Vanguard's Irish ETFs, because their conversion to CDIs was apparently completed on 8 November 2019, and I don't think I've wanted a live price on them more recently than that. Could try getting a test live quote when LSE is next open.)

I've bought and subsequently sold some VWRL a few weeks ago. I got a live price and didn't notice any difference whatsoever.

EdGasketTheSecond

I would not want CDIs if I could have shares with another provider.