FTT set to miss 2016 deadline
11 December 2014 Brussels
Image: Shutterstock
Ministers from the EU 11 have failed to meet their end-of-year deadline for outlining the Financial Transaction Tax (FTT) on equities, which is likely to scupper January 2016 implementation plans, according to reports.
The EU 11 had originally intended to come to a conclusion over the FTT before the end of 2014.
But almost two years of talks have not produced a result in time, suggesting that the 2016 implementation deadline might be missed. French finance minister Michel Sapin has reportedly claimed that an agreement on the final FTT is still possible.
He said at a news conference that ministers are “not giving up”, and that the January 2016 deadline is “not a fantasy or a funeral”, adding: “That is [still] our objective.”
Participating member states will be able to decide themselves when they introduce a tax on other instruments, such as fixed income or derivatives, before coming together again to consolidate their efforts.
Speaking at the European Beneficial Owners’ Securities Lending Conference in London earlier this year, John Billige of State Street claimed this will create an imperfect tax and would not be good for securities finance, which is yet to be exempted.
Although there is still no talk of exempting temporary transfers from the FTT, repo transactions may be protected eventually.
This will see a 10 basis point charge levied on each lend and return, explained Billige, which will inevitably be passed on to beneficial owners because “banks wouldn’t wear it”.
The EU 11 had originally intended to come to a conclusion over the FTT before the end of 2014.
But almost two years of talks have not produced a result in time, suggesting that the 2016 implementation deadline might be missed. French finance minister Michel Sapin has reportedly claimed that an agreement on the final FTT is still possible.
He said at a news conference that ministers are “not giving up”, and that the January 2016 deadline is “not a fantasy or a funeral”, adding: “That is [still] our objective.”
Participating member states will be able to decide themselves when they introduce a tax on other instruments, such as fixed income or derivatives, before coming together again to consolidate their efforts.
Speaking at the European Beneficial Owners’ Securities Lending Conference in London earlier this year, John Billige of State Street claimed this will create an imperfect tax and would not be good for securities finance, which is yet to be exempted.
Although there is still no talk of exempting temporary transfers from the FTT, repo transactions may be protected eventually.
This will see a 10 basis point charge levied on each lend and return, explained Billige, which will inevitably be passed on to beneficial owners because “banks wouldn’t wear it”.
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