What happened to ETCs like SGLN on the platform? They seem to have been removed and could not be invested in recently.
This deserves a response, a significant portion of your customers will hold ETCs. The total lack of information on this is concerning, I say that as a customer of almost 4 years who has referred several friends and family to the platform.
This is a customer service response from another thread about this:
“We have temporarily stopped offering a small number of funds while we investigate a permissions issue. We take our regulatory obligations seriously and are liaising with the FCA, and those ETFs are temporarily unavailable for buying.”
So if my existing portfolio already contains one of those ETCs, will it be invested in the next monthly contribution? If not, will the investment percentage of my other ETFs be adjusted automatically to use up the whole contribution amount, or will the investment proportion of that ETC be simply kept as cash?
I successfully added to a portfolio containing SGLN on 7th January and the correct proportion of my added cash was allocated to that ETC, so I think if you’ve already got it you won’t notice a difference.
Hi there, I have SGLN in both a GIA and an ISA. I added money to my GIA twice and placed orders twice last week and both times the order executed and bought more shares of SGLN in my GIA. And I rebalanced my ISA as well and there too it purchased more shares of SGLN this week. So, it looks like if you already have this in your portfolio, it is not making any difference as of now. But who knows, maybe in some time I will not be allowed to buy more shares in SGLN anymore! That will be very disappointing!
But the fact that I can still buy more shares of SGLN seems to suggest that this is not really some regulatory issue, otherwise I am sure no one can trade that ETC on InvestEngine anymore. It seems like a strangely specific and limited regulatory issue which will be very very odd. I wonder what the real reason for stopping offering this to new customers is.
Its likely it is, given that at Hargreaves Lansdown and AJBell retail punters are now required to do a sophisticated investor test (aka “appropriateness test”) for buying SSLN silver ETF and other Precious Metal ETFs.
Investengine probably do not have any capability to assess "appropriateness” for now; unless you already own it having bought at much lower prices. My wild guess.
I got asked to do an Appropriateness Test for QYLP on another platform, but not on InvestEngine. Weird. I also got asked on a.n.other platform to do it for a certain type of Bond fund ETF. Not 100% sure IE have their Appropriateness Test rules quite correct
Thanks for raising this, it’s a fair question.
The FCA rules are not definitive on what constitutes a “complex” product, so there’s some scope for providers to reach different conclusions. Issuer disclosures can also be inconsistent, which adds to the challenge.
Based on our interpretation of the rules, QYLP and similar covered call ETFs don’t meet the threshold for classification as complex. However, we recognise that the underlying options strategy makes them less straightforward than a standard index tracker. We therefore provide an enhanced risk warning before investment, giving investors additional context without requiring a formal test.
We don’t currently require appropriateness tests because our investment universe is limited to products we classify as non-complex. We keep this position under review and aim to provide clients with additional information and education where a product may require further explanation.
Hopefully this helps provide some clarity. Thanks,
Matt
Hi Matthew,
Could you please address the original question of this thread, i.e. the fact that certain ETC like SGLN have been removed? Or has this quietly been overturned as I can see both SGLN and SSLN when searching for Investments on the general website without logging in.
What was the details of the appropriateness test, just out of interest? I mean QYLP as an ETF doesn’t even use a particularly complex strategy, it’s essentially QQQ with an options strategy, but it’s not rocket science by a long shot. In the grand scheme I don’t think it’s all that different to the way JEQP approaches things.
Same with a precious metal ETF. What makes them complex? Is it the understanding of volatility and risk, because both of those are inherently the same for any instrument you buy.
I looked at the criteria to qualify as a Sophisticated Investor and quite frankly most people will not qualify, nor come close to meeting the criteria.
-Be an Angel Syndicate Member
-Be a Company Director of a company with an annual turnover of at least ÂŁ1.6 million
-Be a Finance Professional for two years
-Be an active private investor
I don’t know of anyone that meets any of those criteria and I know people who privately trade in stocks, forex, futures and options. All of those far riskier than QYLP. It just seems nuts.