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I am trying to buy an ETF using my account in Interactive Brokers. I am surprised to see that it is not possible. I am living in Europe and trying to buy an ETF in US dollars.

Their response to me:

UK Retail clients are restricted from trading in US ETFs. Opening orders from retail investors residing in the European Economic Area (EEA) who attempt to enter an opening order that are associated with a product that does not comply with the EU's Packaged Retail and Insurance-based Investment Product Regulation (PRIIPS) will be rejected. The regulation is intended to enhance understanding of these products through the provision of disclosure documentation. This documentation is referred to as the Key Information Document (or "KID") which. The KID provides information such as product description, costs, risks & performance.

This seems to be a new regulation for EU citizens. Anyone else face this issue? What would be the best route for buying into an ETF as a person living in Europe?

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    I've not bought/attempted-to-buy US ETFs, so this is speculation, but you might want to ask whether it applies to all_US ETFs, or selected ones. It may be that some _do comply with PRIIPS but others (including, presumably, the one you wanted to buy) do not. – TripeHound Aug 23 at 6:39
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    it is all US-domiciled ETFs it seems justetf.com/uk/news/etf/us-domiciled-etfs.html – bp2010 Aug 23 at 14:20
  • Most US popular ETF has a local counterpart in London and Frankfurt stock exchange. Though the annual fees of those ETFs may be slightly higher, it will save you the hassle of currency conversion – mootmoot Sep 3 at 13:43
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If you have only EU/UK tax residency, you can buy any ETF with "UCITS" in the name - those conform to the new consumer information regulations. I gather that the expense ratios often aren't quite as favorable as the US domiciled ones, but I would do it anyway. Here are some that track the S&P 500: https://www.justetf.com/gb-en/find-etf.html?assetClass=class-equity&country=US&index=S%2526P%2B500%25C2%25AE

On the other hand if, like me, you are a US citizen residing in the EU/UK, do NOT buy an ETF that is not domiciled in the US. Why: https://thunfinancial.com/home/american-expat-financial-advice-research-articles/american-expat-pfic-uk-non-reporting-fund-investment-trap-article/

I'm currently looking for a solution for myself and will post a follow-up comment here if I find one any simpler than DIY direct indexing.

  • hi @Amanda thanks for the response. I just tried with this gold etf justetf.com/uk/… on IB but it also does not work. (ticker GDX) It gives me the same response about being a retail customer – bp2010 Sep 4 at 18:45
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I see 2 possibilities:

  • The justetf post you link suggests that it may help to get yourself listed as "experienced investor" to get access to these ETFs via your European broker. I'd certainly ask them.
  • The second possibility is to open an international brokerage account in the US. That would also avoid to have a currency conversion everytime you do anything - conversion happens only when you wire money between your USD and EUR/GBP/... account.
    You'll have some tax burocracy getting non-citizen non-resident tax status, but something along those lines would probably also be needed when buying the US ETF at your domestic broker.

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