This is insane, with IB commissions this is effectively 50% higher commissions. They didn't want to be reasonable but wanted to go all out, how absurd.
Murphy: stock trade tax a matter of if not when: https://newjerseyglobe.com/governor/murphy-financial-transaction-tax-a-matter-of-if-not-when/ Gov. Phil Murphy isn’t prepared to commit to pursuing a tax on financial transactions in a future budget. “If we can do it, I’d love to do it, but it is complicated,” The governor said on the New Jersey Globe Power Hour on 77 WABC Saturday. “And I would just say it’s more ‘if’ than ‘when,’ but we like the notion a lot and we’re working hard at it.” The proposal involves levying a tax worth roughly a quarter-of-cent on every financial transaction conducted in the state. Many major exchanges, including the New York Stock Exchange, run their electronic trading systems in New Jersey. The proposal won’t make it into this year’s budget — the measure wasn’t scored in the governor’s revised budget address and he said that would remain the case — but the governor isn’t ruling out pursuing it sometime down the line. “It’s something that I notionally like a lot. Our team has spent a lot of time on it. Our legislative colleagues have spent a significant amount of time on it,” Murphy said. “John McKeon, who is a dear friend, has led that in the Assembly, but it’s still a way’s off.” The proposal has already spooked some exchanges. The NYSE will run the smallest of its five exchanges out of a backup site in Chicago between Sept. 28 and Oct. 2. The exchange has threatened to pull its operations out of the state entirely if the micro-cent tax is enacted. Some estimates have said the tax would bring in as much as $10 billion for the state each year, though Murphy wasn’t willing to give his own estimate. “I don’t have a number for you, but if it were to happen, it’s a significant item,” he said. “I’ll just leave it there, and again, that’s not because I’m hiding the pea as much as there’s just a lot of moving parts. I don’t want to hang my hat on a particular number, but it’s significant if it were to happen.”
Not sure what's going on with the NJ FTT at this point. From various reporting it was supposed to not be in Gov. Murphy's 2021 budget but Larry Tabb is reporting that the NJ Tax plan was submitted with Trans Tax but they are planning a supplemental proposal to be voted on in the next few weeks. Not sure why they would even vote on this at this point? It sounds like a foregone conclusion that the exchanges will leave. I guess they might as well leave at this point regardless?
Error on my part as it's per transaction. But what about a trade of 1000 shares executed in 25 share legs?
Actually I'm hearing that are saying that the .0025 is actually per share not transaction (if that's the case the bill is very poorly written - maybe by design). .0025 per share makes sense as they keep saying it could raise $10 billion per year. If it was .0025 per transaction even billions of transactions wouldn't raise much money at all. I guess this is why the exchanges are planning to move it if need be.
Makes more sense. Assuming exchanges won't move and the tax is introduced - for many retail traders it means doubling of commissions (with IB's fixed model), Robinhood and other freebies will run into existential trouble as HFT will probably cease to exist and if they suddenly start charging commissions - what happens to the customer base? Pension funds will also take a major hit because this is a fixed cost and they have negotiated commissions (low). What an insane move if they go through with it, lots of tax revenue lost for NJ.
US market could benefit if exchanges exit New Jersey in tax spat: https://finance.yahoo.com/news/u-market-could-benefit-exchanges-101800531.html NEW YORK (Reuters) - U.S. stock exchanges have put New Jersey on notice: Pass a financial transaction tax and they will relocate their primary data centers, where billions of dollars of trades are executed daily - possibly to Chicago. A move to the Windy City wouldn't just save millions in annual tax dollars. It could also help level the playing field for market participants by making lightning-fast price changes harder to exploit by high-speed traders and promote deeper liquidity, industry members said. That's because all 16 U.S. stock exchanges have their disaster recovery sites in the same building at 350 East Cermak Road in Chicago, as opposed to their main sites, which currently reside in three data centers spread across a 50-mile swath of northern New Jersey. In the electronic trading world, the physical distance a signal must travel is a key factor in how long it takes to get an order filled, and the race to get the best prices is one in which nanoseconds matter. Moving to the Chicago site would reduce the possibility for latency arbitrage, where firms detect a trade on one exchange and then use microwave or laser technology and sophisticated algorithms to race to the other exchanges, executing trades and booking profits before those exchanges can update their prices. "A lot of investments in fast infrastructure would become obsolete and a lot of trading strategies on that side would be eliminated," said Jack Miller, head of trading at Robert W. Baird & Co. Reducing latency arbitrage would make it easier for market participants to complete trades at their desired price, said a senior exchange executive who was not authorized to speak publicly on the matter. That would encourage larger displayed trade sizes with tighter spreads between the price at which an asset is being offered and the price for which it is being sold, improving overall liquidity, the person added. "Having all exchanges in one geographic location would be healthier for liquidity in our markets," said another senior industry executive. SHOT ACROSS THE BOW The backup to the U.S. stock market is in an eight-story English gothic-style building just off Lake Michigan, in the shadow of Chicago's sprawling McCormick Place Convention Center, that hosts several data centers. This week, Intercontinental Exchange Inc's <ICE.N> New York Stock Exchange unit is running the smallest of its five exchanges, NYSE Chicago, live from the location to show its readiness to move. Nasdaq Inc <NDAQ.O> plans to do the same with its smallest exchange for a week in late October. All 16 exchanges were also in Chicago this past weekend for an industry-wide exercise simulating a regular trading day, in part to show they could operate from their disaster recovery sites in an emergency. But the exchanges also wanted to send a message to New Jersey, which is considering a state tax of a quarter of a cent per financial transaction for firms that make more than 10,000 such transactions per year. "The tests are a first step toward demonstrating industry preparedness to move data centers out of New Jersey and protect millions of market participants across the U.S. from New Jersey's invasive proposed tax," said the Coalition to Prevent the Taxing of Retirement Savings. The tax is under review by the state's Senate, Assembly and its governor, said Richard McGrath, a spokesperson for New Jersey's Senate president, Stephen Sweeney, who introduced one of two bills proposing the levy. The coalition represents exchange operators NYSE, Nasdaq, Cboe Global Markets <CBOE.Z>, IEX Group and the Members Exchange, as well as financial firms TD Ameritrade <AMTD.O>, UBS <UBSG.S>, Credit Suisse <CSGN.S>, Citadel Securities, Virtu Financial <VIRT.O> and data center operator Equinix <EQIX.O>. "They're basically firing a very strong shot across the bow of the people trying to impose a local transaction tax, by signaling, we can literally move everything out of state overnight," said James Angel, a finance professor at Georgetown University.
Chicago is as corrupt as NJ and NYC are. Just look at that so called mayor of Chicago. The NJ data centers sit on the fastest, lowest link to London. They are pretty much locked there. As soon as a new tech like Starlink or others will offer robust, low-latency, location-independent connections they can go off-shore for all I know. Imagine NYSE on Maldives... For now, all I hear is vapourware.
Nasdaq in talks with Texas Gov. Abbott about relocating trading systems to Dallas Ft. Worth, Sources Say: https://www.dallasnews.com/business...locating-trading-systems-to-d-fw-sources-say/ Nasdaq Inc. is in talks with Texas Gov. Greg Abbott about potentially relocating the exchange’s electronic trading systems from New Jersey to Dallas-Fort Worth, according to two sources familiar with the discussions. Other trading exchanges also could be involved in the discussions, both sources said. A spokesperson for the New York Stock Exchange said in a statement that the exchange has "heard from several states eager to be the next home to our data center should New Jersey adopt a financial transaction tax harmful to Main Street investors.” Abbott confirmed the talks with Nasdaq in a tweet after The News published this story online. “They want to flee high taxes,” he wrote. “I let them know that we just passed a constitutional amendment banning an income tax in Texas.” Nasdaq is planning a visit to Texas to meet with the governor, according to one of the sources. Leaders of the exchange have had “a great dialogue” with Abbott, the source said. The exchange, which has 87 employees in the state, is intrigued by an opportunity touted by Abbott to power its electronic infrastructure with renewable energy from wind farms in the state, according to one of the sources. Nasdaq is the trading platform for many of the nation’s environmentally conscious companies. When Facebook invested $1 billion in building its massive data center at AllianceTexas north of Fort Worth, it struck a deal to buy its electricity from a 17,000-acre wind farm under construction at the time. Facebook, which trades on Nasdaq, is now planning to add to its 150-acre campus, which opened in 2017. Dallas-Fort Worth isn’t alone in wooing the stock exchanges. Officials in Virginia, North Carolina and Illinois have also had discussions with Nasdaq, one of the sources said. In a statement to The Dallas Morning News, Nasdaq vice president of communications Joe Christinat said: “We are assessing all options, but our No. 1 priority is protecting the U.S. capital markets and its investors." A spokesman for the NYSE’s parent company, the Intercontinental Exchange, couldn’t be immediately reached for comment. A potential tax on financial transactions in New Jersey, where Nasdaq and other exchanges house the data systems that power Wall Street’s daily trades, is what’s driving the talks. NYSE, Nasdaq and Cboe Global Markets Inc. signaled in September that they would be willing to shift operations away from New Jersey if the state passed the proposed tax. The proposal would implement a quarter-cent tax on every transaction for firms handling more than 100,000 transactions a year. New Jersey Gov. Phil Murphy has said as recently as this week that he supports the tax. New Jersey faces a $5.63 billion shortfall in its current fiscal year as a result of a drop-off in tax revenue during the coronavirus shutdown. On Tuesday, a coalition of trade associations representing about 200,000 financial services workers sent a letter to New Jersey lawmaker John F. McKeon, the proposal’s sponsor, conveying “strong opposition” to the tax. “A [tax] could lead to financial firms moving their electronic infrastructure and the related jobs outside of New Jersey. This would reduce employment and revenue in the state,” the coalition wrote. Last month, NYSE conducted a dry run using a backup system in Chicago to determine how quickly it could move operations out of New Jersey. Nasdaq has performed similar tests. Dallas-Fort Worth is one of the nation’s largest data center markets, with tech giants like Facebook and Google investing heavily in new facilities in recent years. Facebook recently filed plans with the state to expand its massive AllianceTexas facility by an additional 277,000 square feet. Google is constructing a 375-acre, $600 million data center campus in Midlothian in Ellis County.