This article is educational material and an analytical exercise, not personalized investment, tax, or legal advice. Readers should consult a licensed tax professional, knowledgeable about current developments in tax law, before acting on anything here.
Around noon PT yesterday, an adviser sent me a notice they received from Schwab announcing "heightened maintenance standards" to be added to all long/short separate accounts custodied at Schwab.
I recently wrote about Schwab’s risk memorandum, and I highly recommend that anyone considering tax-aware long/short solutions (130/30, 200/100, 250/150, etc.) read it for education and enlightenment.
Here are the salient bits from the new notice and what they could mean.