http://www.ft.com/cms/s/0/e82a3792-6a2a-11e2-a3db-00144feab49a.html#ixzz2JRzl6U00 So even if both trading parties are outside the zone if the product is issued from within the zone or the HQ of your clearer is within the zone or the quoted product has 'a clear connection to a participating member state' or you live in the zone you get taxed unless you're a pension fund. Spot fx exempt. Goodbye day trading bund, bobl schatz, dax, eurostoxx, CAC, BTP, OAT even as Eurex's HQ is Swiss only SMI would be untaxed. 0.01% of underlying on the derivatives ie about 10 Euro, (per side or rtp?) FTSE, Gilt etc still viable and obviously American and Asian products. Milk em while they last!
So eurex have been screwed by the EU the same way eurex screwed anyone who wasn't a HFT/algo asshole. Human traders have been getting "taxed" for years by these cheats. Tripping spreadmachines,high speed bogus orders to force pay up ticks.I must have given away 10s of 1000s of $s away to this sort of behavior. Eurex was dying anyway - I actually care about them and this about as much as eurex did when they let HFT/algo run amok 10 years ago.
Thats doesnt sound legally enforceable on other countries. Lets say Eurostoxx trading moves to Zurich for trading by anyone and everyone outside the 11 countries who are imposing the FTT. I dont see how they can force traders to pay the FTT on it. Stamp duty on shares only works because the transfer of ownership has to be legally registered back in the issuing home country. For derivatives i cant see how they will ever get it to work. Seems like wishful thinking by the people who are drawing up the plans, they think they can just stick this clause in and all avoidance will be made impossible.
Maybe they will hold clearers responsible then you will be charged at the time of execution and they will pass it on to the government like sales tax.
That would get pricey, fast Eurex bonds are valued at 100,000 euro so at 0.01% the tax is 10 euro,euribor and eurodollars are valued at 1,000,000 so that would make it 100 euro per lot in tax i think. Good luck to RSJ I still prefer the idea of a Non-FTT where cancels x number of lots NOT messages are charged,would've brought in a fortune and made trading fairer.
I actually think this will benefit the market and will be glad to see it introduced. Yes volume will probably decline further, but a lot of algo's will be knocked out of the game, which I think will mean genuine flow will be back on the table and thus moves with more readably identifiable structure.
When Sweden introduced a FTT the volume of futures trading fell by 98% (See below). Don't know how you reached the conclusion that the market will benefit when there is no market? This proposal will impact jobs and growth and kill off any economic recovery. Search for "Swedish financial transaction tax" on Wikipedia:- "Even though the tax on fixed-income securities was much lower than that on equities, the impact on market trading was much more dramatic. During the first week of the tax, the volume of bond trading fell by 85%, even though the tax rate on five-year bonds was only 0.003%. The volume of futures trading fell by 98% and the options trading market disappeared. " "Revenues from the tax on fixed-income securities were initially expected to amount to 1,500 million Swedish kronor per year. They did not amount to more than 80 million Swedish kronor in any year and the average was closer to 50 million" "The Swedish FTT is widely considered a failure."
I am so happy for you that you will be able to make money in the markets once this tax is introduced. Let us know when you get rich trading