ISA Unavailable Stocks notification

Just received this notification in-app…

After a thorough compliance check, we’ve discovered 17 ADRs which are not eligible to be held in an ISA account as per HMRC’s rules & guidance.
We ask you to close, at your own convenience, any existing positions with these securities, as well as not hold them within any of your pies.
Should any positions still be left open tomorrow, Thursday, Aug. 27 14:30 GMT+1, we’ll be required to manually close them.
The affected securities are: Baidu, Bilibili, Baozun, Foresight Autonomous, GSX Techedu, GW Pharma, JDcom, Jumia Tech, NIO Inc., NIU Tech, Pinduoduo, Qudian, Teva Pharma, Talend, Tencent Music, Trivago, Taiwan Semi (TSM).

Can you give us some info on what changed?

A post with more info here… NIO Inc ISA eligibility

@David can we have the stocks transferred from ISA to a regular Invest account? Pretty short notice if I don’t say…

Here’s some tags for people in the previous thread: @obrienciaran @EquityInvestor @datageek @Finki @mmaatt78 @Badger19 @bobbybob123

Nothing changed. T212 were just ‘wrong’ to allow them to be in ISAs in the first place.

Rules with ADRs are complex and you can find what Ive written on them in this forum. It’s to do with ‘parental’ company listing and hmrc rules on recognised exchanges.

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… the nerd inside me compels me to verify all of these and see if I reach the same conclusion using the magic of the FinKi AutoISA API… automates ISA eligibility decisions…so you don’t end up with problems like this.

Feels like T212 could get free and very valuable help from their overly nice community… but I feel like they don’t want it…Shame

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@Joppy Unfortunately, we’re not able to facilitate such a transfer. An available option is to sell the stock, transfer the cash & purchase it again.

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sorry I dont understand, so if I have JMIA and its in red, does this mean I am forced to sell it and take a loss?

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This is a pretty monumental oversight on T212’s part…

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Correct and you have less than a day to sell otherwise T212 will force it…

… I’ve ran all those 17 stocks through the FinKi AutoISA API thingy and agree with them all… but, I could have told T212 that months ago… when the query first came up in relation to the NIO ADR.

Sorry people. T212 are correct (but wrong for havng let you purchase them in the ISA in the first place). You have to exit your position. Then I assume T212 will undertake the ISA repair process???

:man_shrugging:t2:

Is this even legal? Unbelievable. And I actually have no notification from them regarding this

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It’s a compliance and administrative and operational oversight. But it’s not illegal. But it’s bad PR. Once identified as ineligible you usually have 30 days to correct the position. T212 then need to do some maths in the background to reset the ISA and make it look like the subscriptions for inelegible stocks never occured - I think. They also have to monitor ISA compliance on an ongoing basis… which I figure they’ll take a little bit more seriously now!!!

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Surely t212 need to offer a transfer from the isa to the invest so we don’t have to sell and re buy

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It would be great if we can have more info @David

I’m guessing the deadline has been set by HMRC? Or are T212 just wanting people to quickly exit? Because we have no info!

  • If I invested £500 and made £200 profit, am I liable for capital gains tax?

  • Do I have to report it?

  • Does the £500 still come out of my £20k/year ISA allowance? Or is it now £700?

Giving us 1 trading day to force us to sell our positions is really not fair especially considering we don’t even have any information.

What about people that are in the red, are you going to cover their losses? :confused:

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I dont believe that T212 can pass on liability to investors for their legal non-compliance

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For the record…but not legally binding… When events like this used to occur in the Brokerage Operation I used to manage… we used to compensate clients IF the error was ours.

So, if we placed the stock in the ISA in error = Compensation.

If, for example, the stock delisted from a recognised exchange and became ineligible = No compensation.

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Some NIO holders… @Ben1 @Vedran @laguiar @Jimmy1 @IsabellaBear @Ashige

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Going to be a massive amount of very unhappy investors t212 I suggest you start working on a solution quickly !

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We need to make a formal complaint to the regulatory authority. Liability for brokerage’s lack of legal compliance cannot be passed on to clients

So am I right in thinking that SEA (one of the more discussed stocks on this Forum) has got the OK for ISA eligibility? (If it’s still pending or something, this would be good to know).

I don’t interpret it this way. From the quote from Finki:

“T212 then need to do some maths in the background to reset the ISA and make it look like the subscriptions for ineligible stocks never occured.”

I interpret this to mean that profits AND losses should be voided – as if the transactions never took place.

But I don’t know, I’m as in the dark as you are.