Ed Balls MP yesterday announced measures at the second meeting of the Chancellor’s High Level Group on City Competitiveness which will modernise the tax system to remove obstacles to competition and expand choice in trading financial instruments in the UK.
As of November 2007, the Government will no longer require transactions in shares admitted to trading on a regulated market under MiFID to be reported to that market, in order for intermediaries to benefit from stamp duty relief. Currently, relief from stamp duty is available for intermediaries that trade securities listed on the main market of the London Stock Exchange (LSE) only if they are members of the LSE and report their trades to the LSE. This measure will allow new providers of transaction reporting services to enter the market more easily, says HM Treasury.
“We are very pleased to hear today’s proposals,” announces Simon Brickles, CEO, PLUS Markets Group. “We have an outstanding Economic Secretary to the Treasury who is willing to challenge private-sector monopolies for the benefit of customers. The result will be to bring down the cost of trading equities in London by increasing competition and offering users a choice unencumbered by tax and regulatory penalities,” he adds.
The Government proposes to modernise the definition of a Recognised Stock Exchange for tax purposes to allow shares traded on other regulated markets under MiFID to benefit from the same tax arrangements that currently apply only to the LSE in the UK.
PLUS Markets Group is in the process of applying for Recognised Investment Exchange (RIE) status. The new proposals will remove several outstanding obstacles to competition and put PLUS Markets Group on a level playing field with other exchanges, says the firm.