Asset managers and banks sign AFME’s protocol on French FTT
More than 120 European asset managers, investment banks and trading firms have signed a protocol issued by the Association for Financial Markets in Europe (AFME), which intends to act as a guide to the French financial transaction tax (FTT), introduced on August 1.
The 18-page protocol determines who is liable to report and pay the tax and gives to all signatories a standardised approach to the new tax.
The transaction tax imposes three levies: a tax on French equity instruments issued by companies with a capitalisation of more than €1bn; a tax on high-frequency trading; and a tax on naked sovereign credit default swaps.
But details on the FTT are yet to be drafted, and AFME’s protocol also intends to give clarity to the institutions which will be obliged to report and will carry the burden of the tax.
Over the last weeks, firms have protested against at the introduction of the tax, which was double the rate originally proposed.
“The financial transaction tax is likely to spark a flurry of reaction from multinational financial services companies. Many will question why they should keep their trading operations in the country,” said tax advisory firm Taxand.
AFME’s protocol can be found here: French FTT – Indemnity Protocol