EQi sudden email warning of extra fees from Mar 15 for Irish securities, including ETFs?

ekiflump

I received this email from EQi late yesterday, leaving me only one trading day to act:

Notice of changes to Irish securities. As the UK has left the European Union, there will be changes to how securities in Irish companies are traded and held. Currently, investments in Irish securities are held at Euroclear UK & Ireland (EUI/CREST)... This will now change and all Irish securities will become CDIs on March 15 and incur additional international dealing fees. As Irish securities can no longer be held as UK ordinary shares, CDI can incur additional charges as they must now be held as international equities and be subject to a foreign transaction charge. Up to £25,000 ADDITIONAL FEE 0.95% ... What can I do if I do not want to hold CDIs? As this change has been brought about by the UK’s exit from the European Union, and will take place automatically, any investor not wishing to hold CDIs will need to sell their Irish securities in advance of March 15.

Does this apply to iShare ETFs I hold with them, since they say domicile Ireland?

If so, does that mean I will be hit by extra 0.95% when buy/sell in future? Seems a lot given that attraction of trackers is low cost.

Is it the same with other brokers? eg could I avoid fees by transferring?

dunstonh

If so, does that mean I will be hit by extra 0.95% when buy/sell in future? Seems a lot given that attraction of trackers is low cost.

Trackers are available in ETF and OEIC form.  Move to OEICs or UK domiciled share classes.

Is it the same with other brokers? eg could I avoid fees by transferring?

Different platforms will adjust their charges in different ways.

Alexland

The change happening on the 15th affects all investors however the charges will be specific to EQi.

https://www.euroclear.com/about/en/regulatorylandscape/Brexit/irish-securities-settlement-update.html

The migration of Irish Securities Settlement from Euroclear UK & Ireland to Euroclear Bank as Issuer CSD is scheduled to be effective on Monday, 15 March 2021 (please refer to the Euroclear Bank as Issuer CSD for Irish corporate securities - Migration guide.

ekiflump

dunstonh said:

Trackers are available in ETF and OEIC form.  Move to OEICs or UK domiciled share classes.

Thanks but I haven't found any UK domiciled ETFs, eg where you can screen for domicile such as justetf site it only finds a handful of ETCs in Jersey.

Different platforms will adjust their charges in different ways.

Sounds ominous. I suppose another more immediate problem is if my new platform(s) doesn't accept my particular ETF (or CDI thing it becomes) so I end up being forced to sell it on EQi.

underground99

ekiflump said:

dunstonh said:

Trackers are available in ETF and OEIC form.  Move to OEICs or UK domiciled share classes.

Thanks but I haven't found any UK domiciled ETFs, eg where you can screen for domicile such as justetf site it only finds a handful of ETCs in Jersey

Yes, there are not really any UK domiciled ETFs, as although we brought the regulations and tax breaks in a few years back to allow them to work efficiently, in practice the major European fund domiciles with big ETF experience (e.g. Ireland and Luxembourg) already had very well established practices and experienced service providers by that point. So the major groups of ETF issuers just chose to stay in those places. 

There are various trackers available as OEICs (whether UK or overseas equivalent) and subscriptions or redemptions to such funds would clear through intermediaries (fund platforms) rather than being traded on a stock exchange.

ekiflump said:

[Different platforms will adjust their charges in different ways.]
Sounds ominous. I suppose another more immediate problem is if my new platform(s) doesn't accept my particular ETF (or CDI thing it becomes) so I end up being forced to sell it on EQi.

Some providers already charge the same amount for transactions in international shares (or UK CDIs representing international shares) as they do for normal UK stocks, and so you wouldn't expect a fee change.
E.g. AJBell Youinvest is £9.95 for a share trade or £4.95 if you do enough transactions to be on the frequent dealer rate, and that applies to both UK or overseas trades booked online.  So if an Irish ETF was previously cleared through Crest at the same price as a UK share, and is now going to be traded as a CDI of a foreign share, it's still £9.95 or £4.95.   Likewise  x-o.co.uk is £5.95 flat rate for transactions on the LSE whether they are UK equities or UK CDIs of foreign shares.   

So your price hike over at EQi is probably not going to be mirrored everywhere else, only by places that want to charge more for 'international' exotica.

oldwally

And to be fair,its all abit irrelevant if we (me being a EQ user too ) are gonna be shifted over to II in the  Summer,it depends what their pricing plan is,or is going to be.

oldwally

PS,and it all seems abit rushed,email saying it comes into force  in only 2-3 days time,seems like EQ were not keeping their eye on the ball,nothing new there !

masonic

If you are planning on allowing your account to move to II, and are unlikely to trade in the interim, it is probably irrelevant.

Thrugelmir

oldwally said:

PS,and it all seems abit rushed,email saying it comes into force  in only 2-3 days time,seems like EQ were not keeping their eye on the ball,nothing new there !

Probably a charge that's been imposed on them at relatively short notice. 

Alexland

Thrugelmir said:

Probably a charge that's been imposed on them at relatively short notice. 

The euroclear link posted above announced the date around 6 months ago.

a4alan

I contacted Eqi about this and they’ve confirmed that etfs are not included in the CDI migration and new charges