A friend sent me an email he just received from TD Ameritrade UK about recent changes to the UK Consumer Credit Act, in regards to margin accounts.
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If this is an across the board thing, as it appears, it effectively eliminates shorting for all but “high net worth” accounts. Shorting requires a margin account, and margin accounts require a net income of 150,000 pounds with net assets not less than 500,000 pounds.
Net Lawman has information regarding exemptions to the UK Consumer Credit Act as of April 6th 2008 as well as the required Statement of ‘High Net Worth’.
What I do not know at this point is if this is some silly interpretation by TD Ameritrade of changes to the Consumer Credit Act or if this is a blatant across the board attack by the UK on the ability of anyone other than “High Net Worth” individuals to short.
Click here for the Consumer Credit (Exempt Agreements) Order 2007 Forms.
If the UK is indeed targeting shorts, there is one thing I can absolutely guarantee: It will fail spectacularly. Just thought I should pass this information and links to the forms along.
Mike “Mish” Shedlock
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