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I have a question which I hope you can help with. I am interested in an US ETF to invest in. Now, my current brokers Freetrade, Hargreaves do not offer US ETFs due to being identified as PRIIPS thus needing a KID. Fair enough, but I made an account with IG and I found many US ETF's that I can invest in (after filling in an online W-8BEN form). So my question is, if IG is offering these ETFs without a KID, would there be a problem in me investing in the ETF? Also, how does IG offer them, when many other brokers cannot. Is there a caveat somewhere I am not seeing?

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  • AFAIK the only problem would be for IG not for you, if they have broken some rule. KIDs are hugely unfit for purpose so don't help you, the retail investor much, but it's a regulation that your broker is supposed to abide by. Jan 18, 2022 at 10:01

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In my experience, some UK investment platforms list the US domiciled ETFs alongside regular US stocks, but it's only when you attempt to actually invest in those ETFs that you will get some message about it not being allowed due to the lack of a KID, at least until you manage to convince the platform that you are a sufficiently "sophisticated" investor or a professional.

There is a thread by IG users here that suggests IG is just such a platform (ie one that lists US ETFs but won't necessarily let you buy them): https://community.ig.com/forums/topic/10955-us-etf/ (And another user with the same issue at https://community.ig.com/forums/topic/10454-uk-account-unable-to-trade-us-etfs/ )

There's some useful background information on the KID issue generally at https://www.justetf.com/ch/news/etf/us-domiciled-etfs.html , which also lists some other reasons why you'd be better off looking for equivalent ETFs domiciled on this side of the Atlantic.

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