The European Parliament has suggested casting a broader net for the coverage of the region’s financial transaction tax (FTT) and has again reiterated its support for implementing the tax even if it does not have full EU support.
A resolution adopted by the European Parliament’s Economic and Monetary Affairs Committee (ECON) was voted through with a number of amendments on Wednesday. The most significant of these was an issuance principle, whereby trades in all stocks issued within the FTT zone would be covered, regardless of where the financial institution is located.
For instance, a trade between a Hong Kong-based firm and US-based firm in Siemens, a stock listed on Deutsche Börse would be subject to the tax.
ECON also voted to retain the European Commission’s residence proposal, which would mean shares issued outside the FTT zone but traded by at least one institution established within the zone would be caught.
"The committee has been consistent with what Parliament has been pushing for and I now expect Member States to show the same consistency with their declarations," said Anni Podimata MEP, who is leading the ECON debate on the FTT. "It is time to change the financial services business model, away from high frequency trading to serving the real economy."
ECON also recommended that while the tax should preferably cover the whole of the European Union, it should be implemented even if it didn’t cover the whole region. MEPs also called for a number of exemptions from the FTT, notably for pension funds.
The European Commission made its first proposal for a FTT last September, suggesting a levy of 0.1% on equity trades and 0.01% on derivatives. Separate from the Europe-wide proposals, France has moved ahead with its own FTT, which imposes a 0.1% levy on net buy trades in French headquartered firms with a market capitalisation of over €1 billion.