European financial transaction tax more likely!

Christian VoigtA very broad agreement in favour of a European Union financial transaction tax emerged on last Monday (9th January 2012), at the start of the Economic and Monetary Affairs Committee’s work on the legislative proposal. Spokespersons for the European Parliament’s (EP) various political groups all advocated such a tax, at least throughout the Eurozone, and many were concerned about France’s weekend hint that it could go it alone (read more here).

Currently a 0.1 % tax is proposed on the value of equity and bond transactions and 0.01 % on the notional value of derivatives, which EP claims would raise €55bn.

The draft report is scheduled to be presented on 28th February, put to a committee vote in early April and a plenary one in June 2012. Parliament has a legal right to present an opinion on the Commission’s proposal.

Market participants fear that a financial transaction tax will lead to a significant decrease in trading volumes across Europe. Furthermore, a shift of order flow from cash products to derivatives, due to the different levels of taxation, might take place.

One Response to “European financial transaction tax more likely!”
  1. Christian says:

    Anni Podimata, the Greek socialist MEP proposed on 29th Feb that the scope of the the tax be widened, and made payable by foreign institutions trading securities issued in the EU, even if all trading takes place abroad. This is similar fashion to the UK’s existing stamp duty on share trading.
    Article on eFinancial News suggested that the proposal was not well received and is unlikely to get passed.

Leave A Comment

Copyright © 2019 Fidessa Group Holdings Limited. All rights reserved.

The information contained within this website is provided for informational purposes only. Fidessa will use reasonable care to ensure that information is accurate at the time it is made available, and for the duration that it remains on the site. The information may be changed by Fidessa at any time without notice. We also reserve the right to close the website at any time. No representation or warranty, expressed or implied, is given on behalf of Fidessa or any of its respective directors, employees, agents, or advisers as to the accuracy or completeness of the information or opinions contained herein or its suitability for any purpose and, save in the case of fraud, all liability for direct, indirect, special, consequential or other loss or damages of whatever kind that may arise from use of the website is hereby excluded to the fullest extent permitted by law. Any decisions you make based on the information in this website are your sole responsibility and information on the website should not be relied upon in connection with any investment decision.

The copyright of this website belongs to Fidessa. All other intellectual property rights are reserved.

Reproduction or redistribution of this information is prohibited except with written permission from Fidessa.