Hartlepool chairman Ken Hodcroft has informed manager Danny Wilson he will have to slash the size of his squad before making any new signings.
The Victoria Park side are under a transfer embargo following their relegation into League Two last season as their existing wage structure fails to meet Football League regulations.
The guidelines state that the overall wage budget must not exceed 60 per cent of the club's annual turnover, but with a squad of more than 30 players and the reduced income projected from League Two, Pools find themselves frozen out of the transfer market.
"All League Two clubs must comply under the Salary Cost Management (SCM) rules laid down by the Football League, which basically means our player salaries must not exceed 60 per cent of the club's turnover," said Hodcroft on the club's official website.
"As we have arrived from League One we found ourselves not complying. This meant that from July 15th we are unable to buy or bring in on loan any players until we reach that 60 per cent requirement.
"The departures of Chris Llewellyn, Thomas Butler and Adam Boyd and the loan of Darrell Clarke to Rochdale helps us but it also depends on revenue, so we need the fans support through the turnstiles."
