1/4% Tax on all stock trades pushed in NY Times today

From what I understand (I could be wrong, read too much ;) )

There was a treaty (based on Germany's proposal) which includes the FTT.
Cameron vetoed that treaty (mainly because of the FTT, but probably also for sovereignty reasons)
Then, the other country's negotiated further.
The FTT (and maybe some other issues) were taken out of the treaty, because they couldn't get consensus about these.
They agreed to continue to deliberate these issues (including FTT) in the forthcoming months.
They will sign the definitive treaty which will include agreed adaptations (with maybe some form of FTT, limited participated country's, or no FTT at all) from these deliberations in March 2012.

Edit: Ah, didn't saw the reaction of tomdavis
 
Page 6:

In order to ensure that the ESM is in a position to take the necessary decisions in all circumstances, voting rules in the ESM will be changed to include an emergency procedure. The mutual agreement rule will be replaced by a qualified majority of 85% in case the Commission and the ECB conclude that an urgent decision related to financial assistance is needed when the financial and economic sustainability of the euro area is threatened.
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it might be in the draft, but it'll not be in the final version without a fight. finland says they can't agree with this as it's unconstiutional. this would mean their constitution would need to be changed, which can only be done with a 67% majority in parliament, which is basically unachievable because of euro-sceptic political parties.

http://www.hs.fi/english/article/Finland+sticks+to+consensus+demand+at+euro+summit/1135270007206

also, at least either slovenia or slovakia (i think the latter) is also against, but i'm a bit too busy to track down an url i've read a few days ago. all i'm saying is: the draft only seems to be the foundation and not agreed on by anyone yet.
 
Quote from bjw:

it might be in the draft, but it'll not be in the final version without a fight. finland says they can't agree with this as it's unconstiutional. this would mean their constitution would need to be changed, which can only be done with a 67% majority in parliament, which is basically unachievable because of euro-sceptic political parties.

http://www.hs.fi/english/article/Finland+sticks+to+consensus+demand+at+euro+summit/1135270007206

also, at least either slovenia or slovakia (i think the latter) is also against, but i'm a bit too busy to track down an url i've read a few days ago. all i'm saying is: the draft only seems to be the foundation and not agreed on by anyone yet.
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My friend in Sweden made an interesting point: He said that Merkel/Sarkozy/Barroso/Rumpuy made a big deal about this Treaty and, after losing the UK, they can't walk away empty handed. That leaves them in a weak negotiating position. They have to be able to say they brought Europe together to save the Euro. They will get a Treaty of some kind, but after the negotiations it will be watered down by so many demands from various countries that it won't be much more than a piece of paper to wave around at a press conference.
 
"One of the key aspects of the proposed Directive is whether a financial institution will be treated as being within the FTT zone. This happens when a financial institution is “established” within the EU. In addition to “establishment” being judged by reference to incorporation, residence and regulation, an institution will also be “established” in the EU for the purposes of the FTT if it is a party, whether acting as principal or as agent, to a financial transaction with another financial institution established in that Member State."

On this subject, I reread the EC proposal rapidly but didn't found what I was thinking, that the EU based institution would pay for both for a transaction with non-EU party. I don't know where I had this idea from but I am sure I read it somewhere.

However, a non-EU based party wouldn't be taxed if it proves that the transaction tax economic substance has no link to the member state, which means that logically an american party trading CBOT corn wouldn't be charged just because it clicked on an euro institution size on globex book. The problem should be for an UK institution trading CAC40 futures with a french counterpart on NYSEEuronext. However, that is just rhetoric. I don't know how they would enforce CME or Chicago FCMs for example to collaborate and give EU customers datas. Talk about creating some new useful jobs for the EU...LOL
 
EU ECONOMIC AND FINANCIAL AFFAIRS AND INTERNATIONAL TRADE SUB-COMMITTEE
Financial Transaction Tax
Oral and written evidence

http://www.parliament.uk/documents/...inancialTransactionTax/FTTWrittenevidence.pdf

This rather large document contains written and oral answers to a list of FTT related questions. Evidence from 33 bodies and individuals - both pro and anti FTT - are presented here to the UK House of Lords.

Question 7 relates to the residence principle:

Q7 Is it appropriate for the FTT to be applied on the basis of the residence principle as proposed by the Commission? How likely is the residence principle to work in practice?

I haven't had time to read through all the answers here, but from a quick skim through it seems the residence principle is held to be deeply flawed by a number of respondents.
 
These are the questions asked in the Lords Call For Evidence (above):

PART I General questions on financial sector taxation
1.
Is there a case for the introduction of a tax on financial transactions? Does the current exemption from VAT for most financial and insurance services lead to a tax advantage for the financial sector?
2.
What would be the most appropriate form for a taxation of the financial sector?
Would a Financial Activities Tax (FAT) be a preferable means of taxing the financial sector? Would other variations (e.g. a currency transaction tax, a securities transaction tax or a financial tax on derivatives) be a more desirable form of taxation?
3.
What lessons can be learnt from the experience of other countries (such as the transaction levy introduced in Sweden in 1984 and abolished in 1991) in relation to a financial sector taxation scheme?

PART II Specific questions on the Commission’s proposal for an FTT
Rationale for an FTT and scope
4.
What is your assessment of the Commission’s objectives as contained in its proposal for an FTT? Are they fair and appropriate?
5.
Does the Commission proposal for an FTT reflect the most desirable design for an FTT?
6.
On which transactions should the FTT be levied? Is it appropriate for the FTT to be levied on shares, bonds, derivatives and structured financial products as suggested by the Commission? What should be the rate of the FTT?
7.
Is it appropriate for the FTT to be applied on the basis of the residence principle as proposed by the Commission? How likely is the residence principle to work in practice?
8.
How significant is the potential for the FTT to raise significant revenues? How reliable would it be as a revenue stream? Where would the true incidence of the FTT fall? Should the revenues arising from the FTT be used to finance the deficits of Member States?
Impact and effectiveness
9.
Would the Commission’s proposal for an FTT be effective in addressing short term volatility and curbing harmful speculation? Would it reduce excessive risk taking?
10.
What would be the impact of the FTT on market liquidity? What effect would the FTT have on speculation in sovereign debt markets?
11.
How easily could the FTT tax be circumvented by market operators?
Impact of the FTT in the UK
12.
What impact would the FTT have on the UK’s financial services sector and the City of London, as well as the UK economy more broadly? If a significant proportion of any transaction tax accrued in London, would the burden necessarily fall on British citizens?
13.
How would you assess the likelihood that the FTT would cause financial services to relocate outside the EU, or contribute to a migration of financial transactions towards less regulated parts of the financial sector? Does the UK experience with the stamp duty demonstrate that a modest FTT is not inconsistent with maintaining a successful stock exchange?
14.
Will the FTT duplicate existing taxes in countries which have already implemented a bank levy, such as the UK?
Implementation
15.
Could such an FTT be plausibly introduced at an EU level, or would an FTT only be effective if introduced globally? Should an FTT be introduced at EU level regardless of whether it is introduced at a global level? In the event that an FTT is not introduced at EU level, would there be a case for its implementation by euro area countries alone?

http://www.parliament.uk/documents/lords-committees/eu-sub-com-a/FinancialTransactionTax/CfEFTT.pdf
 
I thought this was interesting:

H.K. Tops US, UK in Financial Market Growth:

http://www.bloomberg.com/news/print/2011-12-14/h-k-tops-u-s-u-k-in-financial-market-growth.html

"Hong Kong topped the World Economic Forum’s 2011 index of financial market development, supplanting the U.S. and U.K. from the highest rankings for the first time."

"The U.S. and U.K. each dropped one place from last year to rank second and third respectively in the forum’s fourth annual Financial Development Report published yesterday. Hong Kong jumped from fourth, making it the first Asian financial center to lead the 60-country index, helped by non-banking services such as initial public offerings and insurance, it said."

“We are working very hard to maintain Hong Kong’s competitive advantages and increase Hong Kong’s capital markets,” K. C. Chan, the city’s secretary for financial services and the Treasury, said today. “In the future years, developing Hong Kong’s renminbi business will give our financial center an additional boost.”



I'm sure Hong Kong would be more than happy to take on more financial transactions if some country is stupid enough to enact a ftt:)

-Guru
 
Had a quick skim through the written testimony, the Welcome Trust (which has $20billion itself) reckons european charities have $250 billion in investment assets and says the following:

If a FTT is introduced, we would argue that it should not apply to charities
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These charities are so hypocritical, they seem to be ok with the FTT as long as they dont have to pay it.
 
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