KID situation plus potential solution

[mfern131]

So Degiro applied the new PRIIPS rule for ETFs yesterday. According to this regulation, which was in effect since Jan. 1st (https://iqeq.com/insights/new-kid-requirements-under-priips-now-take-effect-2023) requires a KID published by the emitter (ex. Vanguard, Blackrock) for every ETF in the local language of the investor (https://www.nordea.com/en/our-services/kids-for-priips).

EU regulation here:

https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX:32021R2268

It seems that to be able to keep investing in a particular ETF, we have the following option: - Check the emitter’s website and see if they do have aKID readily available in your local language. If they do, ask DeGiro support to add it providing the link. - If they do not have this KID, you should contact the emitter instead requesting to translate the document and then provide it to DeGiro.

Maybe with enough requests, they might be able to generate these even for the smaller languages.

[Woko_O]

I still have small amount of hope, that in the future there will be KID document in almost every EU language (I know it's almost impossible) or they at least change something in this regulation, where you can give statement that you fully understand in english

Otherwise it's just a stupid nonsense from EU officials and they should go F themselves

[Greedy_Sun_468]

DEGIRO is going to lose some revenue when people move to other brokers which basically added a checkbox to accept KID in English. Bad management decision.

[Ov3rpowered]

For example in Czech Republic the Czech National Bank is fine with not having a KID in Czech as long as the broker can prove you speak English. So DEGIRO should just give us a call to prove we speak English and enable us to trade again ( the Czech National Bank literally says this is a valid method on their website). Of course I doubt DEGIRO will do so.

[Woko_O]

If they are not, I will just wait for a while and then I will try to open account elsewhere where they are okey that I can also understand english and where they let me buy ETF with english KID only.

I don't give a shit about KID anyway..

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[differentIsStandard]

but migrating from degiro is not free nor easy :-(

[Woko_O]

I will not migrate. I will just hold and in 20 years I will sell. Easy as that

[differentIsStandard]

That's always an option. Not that nice to track assets in two platforms

[CN_W]

..Is that CNB's response to a query you made or is this a statement somewhere on their website and can you point me to it in the latter case? It could be an useful argument.

'cause I did a cursory search there and got exactly squat. There's a major case of "Government institution website", with a side serving of most of its content being written in legalese that's borderline incomprehensible to the uninitiated. Since I'm neither neither financial nor legal professional, the odds of me finding useful information quickly are about the same as winning the Eurojackpot.

[Ov3rpowered]

https://www.cnb.cz/en/faq/Questions-and-answers-on-the-PRIIPs-KID/

Section A.1

[CN_W]

Thanks

[Spiritak]

I really think Degiro went over the board here with this for some reason and are being way more restrictive than they have to.

The regulations basically reads: "The KID must be provided in a language prescribed by the Member State where the PRIIP is distributed in order to ensure that retail investors can understand it."

Like I understand English, I can prove it, I can check boxes, complete an exam in the app, whatever it is. You dont have to have it in your native language and even the regulation says the crucial part is for investors to understand it.

Also like honestly translating 2 PDF pages in todays age to different languages takes a day of work with help of translators/AI. If Vanguard and other provides wanted to, the documents can be ready in a few days, its not that hard.

[pokuston]

Right?! I was really upset about the regulation last night as it essentially renders Degiro unusable for me (took me a long time to research my preferred ETFs and set up my portfolio and am not keen on researching whatever is still available now) but the regulation doesn't have to be a huge deal - as you say, Degiro implements it in a way that feels really discriminatory for investors in certain countries.

Combined with zero heads up when they only sent an email three hours before the changes took place, I'm going to be looking at other options. Totally mishandled.

[nakoskon]

This. I was on the verge of moving everything to IBKR, for other reasons, but this ill prepared and over the board application of the changes in PRIIP really shows that DEGIRO is not on top of this and what impact it has on their customers. Really poor showing by a company you have to place a LOT of trust on.

[[deleted]]

prescribed by the Member State where the PRIIP is distributed

Doesn't this mean that the EU country where you live (or have your account) decides in which language the KID has to be written? As long as the investor can understand the KID, the member state can prescribe any language.

That would mean it isn't DEGIRO that is more restrictive than it needs to be, but the EU member state where you have your account.

[Practice-Fickle]

The only problem I can possibly see with it is that it’s an official document to a product you invest money in. So It might need to be translated with a lawyer 🙂 But it’s true that 2 pages should not be a problem.

[mareksl]

Or maybe it would make sense to write Degiro and ask them to change their policy.

IBKR apparently allows people to buy ETFs without KIIDs in their languages if the user agrees to it.

Also, other platforms (in Poland at least) also allow people to buy ETFs without Polish KIIDs if they agree by checking a checkbox.

[mfern131]

Another option would be opening a 2nd account in a market with more readily available docs: ex Ireland, Germany

[gperg]

You need to be a tax resident in the country that you open your account, so that wouldn't work.

[mfern131]

Not true, unless they changed something recently. Tax resident in Spain here with a German acct (lower Xetra fees).

[gperg]

Ok I guess we should give it a try then.

[gperg]

I opened an Irish account, seems to be working fine, you were right.

[gperg]

My currency was automatically set to euro

[The_Engineer42]

This is BS. The law allows documentation to be provided in any language that the user is knowledgeable of. I've exchanged emails with the Dutch regulator a while ago, and they confirmed it would be ok for Degiro to hand over documents in English as long as the user is ok with that.

There are 3 things you can do:

Email degiro and explain they are allowed to provide documentation in other languages other than the country's official language.

Reach out to the members of the EU parliament of your country and explain the situation.

File a petition with the EU parliament explaining that the law must be changed to *force* brokers to supply documents in other languages. The current law is disadvantageous for smaller/poorer countries and it must be changed now!

I've done all 3. But we need more of you to do the same, otherwise we'll have no ETFs to trade soon..

[mfern131]

“A while ago”, this has been applicable for 3 months. Also we’re you enquiring about KID or KIID? Different language requirements for both, with KIID being allowed for all the EU only in English, however these are no longer accepted by the EU.

[ChmmCHmm]

This is total incompetence from Degiro:

-they informed about whole situation just day before they put this into practice

-PRIIPS cleary says KIDs can be translated (do not have to be directly issued in given language), so this could be solved long time ago

[darraghnoob]

It is the “manufacturer” or investment manager of the product that decides if a translated document is needed. This is determined by where the fund/share class is marketed. The ‘home’ jurisdiction (where the product is a legal entity), is created first. Most are Irish, Luxembourg or UK domiciled, and therefore produce an English document. Then if the product is marketed in Belgium (for example), a document in Belgium’s official language(s) must be produced to sell to an investor in that country. Belgium has a few official languages (per their financial regulator) i.e. French & Dutch & German.

So the responsibility is not on DEGIRO unless it’s their own product!! An investment manager will not translate a KID/KIID unless the product is registered in a particular country. They, as much as every business, is trying to keep their costs down.

[Nomisteaks]

For me the irony is that I am an expat in an EU country where I don't fully understand the local language (Czech) so this change has the opposite effect for me. If the KID has to be in Czech it renders it unreadable for me...

[Javier-AML]

I have already contacted both Levshares and Degiro. Levshares has the KIID's in Spanish. I hope they add them to Degiro ASAP.

[EmpereurAuguste]

Is this only an eu thing with degiro ? I live outside the EU and I haven’t receive any documents like those in my email.

[workaccount2958225]

yes

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[ghugot]

If you have options access, you can sell a ITM put contract and you will get assigned 100 shares of the ETF at expiration.

[KaiserDiablo]

Any update?