Quote from electricshock:
Do you honestly think that
1-Eurex will move out of Germany?
Yes, absolutely. At least, it will start trading elsewhere and volume will move out of Germany... unless foreign entities trading from abroad are excluded from the tax.
For example of how this will happen see how ICE is trying to "steal" volume from CME by offering lower commissions. They have little success so far as the contrats are different futures than CME ones (even though with identical terms), i.e. if you open a future trade on ICE you can't close it on CME. Further, volume staying on CME is self-fulfilling. If there was such a huge incentive as trasaction tax, the volume could move overnight.
For equities the move is eaven easier than for futures. Many larger companioes alreayd have equities listed in multiple venues. Ultimately, it will be up to each individual German company whether they will want to get their stocks listed in London, Dublin, Amsterdam or Warsaw.
Quote from electricshock:
3-German traders will leave Germany?
German personal-account daytraders will pretty much have to.
Banks and larger HFT shops will be excluded from the rule as marketmakers.
Hedge funds may have tax dodge here. Because the fund management companies don't trade their money... but rather trade money of a financially independendt entity located somewhere like Cayman Islands, they may avoid trasaction tax altogether unless they trade German stocks etc.
Same may work for prop shops.
