Amundi Prime Global ETF, merger into Irish domiciled ETF, not listed to trade on the LSE and not ISA eligible

General
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Hi InvestEngine,

I have just received the email below from InvestEngine relating to this Notice to Shareholders. The main points seem to be that the new ETF:

  • will not be listed on the London Stock Exchange.
  • will not be ISA eligible

I hold shares in this ETF inside my ISA. Could you expand on the implications if I don’t sell them before this merger occurs on 22nd November. The information provided in your email was insufficiently explicit about the situation for your customers who take no action, especially if this ETF is held within an ISA.

You say “If no action is taken you will receive confirmation when the new shares have been credited to your account”. Will we be able to trade the new ETF on the InvestEngine platform given it will not be listed on the LSE? Will our money be stuck invested in the ETF for perpetuity? Will alternative arrangements be put in place to allow manual trading? If anyone is left holding the new fund will you eventually sell their positions?

The notice to shareholders says “Should you choose not to do anything, your ISA account manager should take the appropriate actions on your behalf”. Your email does not say anything specific about ISA accounts containing this ETF.

Could you please provide more details and information on these specific points.
Regards.

InvestEngine Email (19th October)

We are reaching out to give you a quick update on one of the funds held within your portfolio: Amundi Prime Global UCITS ETF (LU1931974692)

This ETF will merge into Amundi Prime Global UCITS ETF Dist (IE000QIF5N15 ) on or around 22nd November 2024.

Please arrange to sell your holding in Amundi Prime Global UCITS ETF (LU1931974692) prior to 14th November 2024, if you do not wish to hold the new line as trading on this line will no longer be available from this date. If no action is taken you will receive confirmation when the new shares have been credited to your account.

Amundi Notice to Shareholders (16th October)

The transfer will have the following implications for your investment:

(a) The Receiving Sub-Fund will not be listed on the London Stock Exchange, which may mean that you are no longer able to trade shares in it as you once did with the Absorbed Sub-Fund. You may wish to contact your ISA account manager to find out more about what this means for you
(b) Your existing investments in the Absorbed Sub-Fund will no longer benefit from tax exemptions such as those enjoyed in the Individual Savings Account (“ISA”) wrapper (see below).

Individual Savings Accounts:

As the Receiving Sub-Fund is not recognised under the UK TMPR and does not otherwise meet the necessary conditions, shares in it will not qualify to be held in an ISA. If you currently hold shares in the Absorbed Sub-Fund through an ISA, it will therefore be necessary for you to arrange for those existing shares to be sold prior to the Merger, or for your relevant ISA account manager to take the appropriate action for you in order to preserve the full weight of the tax benefits attaching to your ISA.

Should you choose not to do anything, your ISA account manager should take the appropriate actions on your behalf, but we cannot guarantee when.

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I agree. We have not been provided with enough information to make an informed decision.

The dividend of this ETF is only paid annually, and it’s due mid December. What happens to that if the fund gets merged 3 weeks before it is due to be paid out and we don’t have an option to participate in the merger?

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In terms of missing out of the dividend payment I don’t think we’ve got anything to be concerned about. The ETF price should be continually adjusted throughout the year to account for any accrued dividends that have not yet been paid until the ex-dividend date. It is explained at https://www.schwab.com/learn/story/understanding-etfs-and-dividends

More alarmingly I have just found the thread at Delisted fund (Amundi EPRE) - what to do to retreive asset value? which discusses the problems people had last year when other Amundi ETFs were delisted from the LSE.

Unless the situation is somehow materially different for this Amundi Prime Global ETF corporate action I think the only sensible thing is to sell before the middle of November. Ideally InvestEngine would do this automatically for their customers rather than waiting until after the event and leaving people stuck in limbo for weeks or months with an ETF that cannot be traded on their platform.

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Received a second email from InvestEngine on 24th October. They’ll be automatically selling any holdings if we’ve not done that ourselves before the end of the month. Seems that they could have allowed some more time to do this but is better than them doing nothing.

We are writing to update you about a change involving one of the funds in your portfolio:
Amundi Prime Global (LU1931974692) (PRIW).

Amundi ETF has decided to merge the Amundi Prime Global into the Amundi Prime Global UCITS ETF, a sub-fund under the Amundi ETF Irish Collective Asset Management Vehicle (ICAV). We want to make sure you’re informed about what this means and what steps are needed moving forward.

What’s Changing?

The merger is set to take place on November 22, 2024. After this date, the Amundi Prime Global will no longer exist, and its assets will be transferred to the Amundi Prime Global UCITS ETF. However, because the new ETF shares are not listed on the London Stock Exchange, you will not receive shares in the new fund.

What Does This Mean for You?

The new shares in the Amundi Prime Global UCITS ETF will not be listed on the London Stock Exchange. As a result, these shares cannot be held in your InvestEngine portfolio.

Since InvestEngine cannot hold the new shares, your Amundi Prime Global shares will need to be sold before the merger is completed.

What You Need to Do

You still have the option to sell your Amundi Prime Global (LU1931974692) (PRIW) shares at any time before the close of business on October 31, 2024 if you wish to manage the process yourself.

If you choose not to sell your shares by this date, we will sell them on your behalf around November 7, 2024, ensuring your portfolio remains compliant with our holdings policy.

Next Steps

  • If you wish to manage the sale of your shares yourself, please ensure that this is done before October 31, 2024.
  • If no action is taken, we will automatically sell your shares after this date to ensure your portfolio remains compliant with InvestEngine’s holdings policy.
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@xetf @Carl

Morning :slightly_smiling_face: :wave:
There’s quite a good write-up on the excellent Monevator UK blog - Why a global ETF is delisting from the LSE (and what happens next) - Monevator.

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