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VHYL changing status

Index tracking funds and ETFs
TahiPanasDua
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VHYL changing status

#246869

Postby TahiPanasDua » August 25th, 2019, 10:41 am

Just received a letter from my broker saying that VHYL (Vanguard FTSE All-World High Yield ETF) will replace all existing shareholdings in the Crest system with Crest Depositary Interests (CDIs).

It does not sound like any kind of worry but does anyone know the thinking behind this?

Thanks
TP2.

Shelford
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Re: VHYL changing status

#247238

Postby Shelford » August 27th, 2019, 12:45 pm

A CREST Depository Interest (CDI) is a UK security that represents a stock traded on an exchange outside the UK. They offer a straightforward, cost-effective way to trade in a number of overseas stocks and are the main means of foreign dealing provided by a number of UK international stock brokers.

In many ways, CDIs resemble American depository receipts (ADRs) and global depository receipts (GDRs). The underlying legal structure and process is very different, but little of this will directly affect the investor.

More boring stuff here: https://the-international-investor.com/ ... terest-cdi

puffster
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Re: VHYL changing status

#247261

Postby puffster » August 27th, 2019, 2:25 pm

Given that Vanguard have a number of other ETFs, is the same happening to these?

Regards, Puffster

Steveam
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Re: VHYL changing status

#247355

Postby Steveam » August 27th, 2019, 9:05 pm

I've received notification of this for VMID, VFEM and VAPX.

Best wishes,

Steve

ffacoffipawb64
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Re: VHYL changing status

#248133

Postby ffacoffipawb64 » August 30th, 2019, 5:30 pm

Does this mean we now have to pay stamp duty on purchases?

toofast2live
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Re: VHYL changing status

#248735

Postby toofast2live » September 2nd, 2019, 4:54 pm

Good question. Any answers?

hiriskpaul
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Re: VHYL changing status

#248772

Postby hiriskpaul » September 2nd, 2019, 7:43 pm

ffacoffipawb64 wrote:Does this mean we now have to pay stamp duty on purchases?

No. No stamp duty on SDIs that wrap foreign securities.

I am curious as to why Vanguard have done this. Has anyone been sent an explanation?

puffster
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Re: VHYL changing status

#250621

Postby puffster » September 9th, 2019, 10:03 pm

I asked Vanguard about the change, the response was:
“Vanguard will be centralising the settlement of trading of Vanguard Irish-domiciled ETFs in an International Central
Securities Depositary (“ICSD”) structure (the “ICSD Model”).

The transition to the ICSD model will help to resolve any ETF post trade issues arising from cross border settlement across Europe as the ETF will be structured as an international security and will settle centrally in the ICSDs rather than various national CSDs.

This is related to the transition of the ETF settlement model from local to international settlement.

Since the international model is now moving to a Euroclear banking model, all CREST holders will change to common depositary interests of Euroclear to allow for centralised settlement.

This will not change the underlying beneficial ownership for you as the client, ie. you will retain the same number of units, value of shares and the process for distributions will stay the same.”

Regards, Puffster


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