Concerns escalated to G 20 on EU Financial Transaction Tax

The Global Financial Markets Association together with various associations from Australia, Canada, Japan and Korea have escalated their concerns on the European Financial Transaction Tax (FTT) to the G20 Finance Ministers meeting.  They explain in an letter that the FTT will have unprecedented extraterritorial impacts and will apply to transactions beyond the eleven EU Member States that have agreed to adopt it.  In particular it will apply to all transactions where:

• either the buyer or seller are resident in an EU 11 country;
• the security was issued in an EU 11 country; or
• an EU 11 financial institution, or any of its foreign branches, is involved in the transaction.

The example provided is that the FTT would apply to the sale of corporate bonds of a French company by a Japanese bank to a Canadian bank through a US broker-dealer.  The letter states “Now is not the time to experiment with policies that will fragment markets, increase market volatility, harm savings and impede growth”.

RELATED LINK

http://www.gfma.org/correspondence/item.aspx?id=464