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If the government really wanted to protect us from ourselves they would limit gambling, which costs poor people a lot and is known to result in unfavorable odds, and they would discontinue the lottery. Instead because the lottery and gambling make the government and big institutions money they are legal. Restricting pattern day trading is, likewise, an attempt to give those with money more leverage over those without money. This law directly discriminates against those without money and it was passed by those with money. The government has essentially passed two sets of laws, one for the rich and one for the poor.
These laws were undemocratically passed by the rich for the rich under the false pretense of protecting the poor. Such is a hallmark of an aristocracy. No nation should have a different set of laws for the rich than for the poor.
The entire Wikipedia article, especially all the criticisms, are worth reading.
FINRA (formerly National Association of Securities Dealers, Inc. or NASD) rule applies to any customer who buys and sells a particular security in the same trading day (day trades), and does this four or more times in any five consecutive business day period; the rule applies to margin accounts, but not to cash accounts. A pattern day trader is subject to special rules. The main rule is that in order to engage in pattern day trading you must maintain an equity balance of at least $25,000 in a margin account.
[...] The SEC believes that people whose account equity is less than $25,000 may represent less-sophisticated traders, who may be less able to handle the losses that may be associated with day trades.
(Score: 2) by n1 on Monday May 15 2017, @12:30AM (1 child)
Great comment, very informative. As someone who isn't a US citizen, I was aware that other brokers outside the US didn't accept US clients, but never understood why. This seems to be the reason.
You are correct that FINRA isn't a legal body as such, but they are regulated by the SEC to regulate the brokers.
http://www.finra.org/sites/default/files/NoticeDocument/p003881.pdf [finra.org]
NASD became FINRA. The current chairman of FINRA was a director at the SEC before moving over... So it's definitely not a legal/government body, but it is still influential in policy and does effectively regulate, since it sets rules and levies fines against bad actors in the industry and is itself regulated by the SEC.
(Score: 0) by Anonymous Coward on Monday May 15 2017, @12:46AM
The reason for that is the same as why foreign banks won't usually do business with us. The amount of reporting they have to do on the money makes it not worth doing in most cases.
But, in all honesty, there's no good reason to be an American having an investment account abroad in most cases. The main advantage of it would if for trading on one of the foreign exchanges and if you're doing that, it's usually easier to have somebody physically over there handling it or buying one of the many funds that specializes in foreign investment.