Jump to navigation

Free Newsletter Modern Trader Follow

Main menu

  • Futures
    • Modern Trader Magazine
    • Commodities
    • Futures Mag Archives
    • ETFs
    • Financials
    • Forex
    • Managed Funds
    • Market Analysis
    • News
    • Options
    • Regulation
    • Technology
    • Trading Strategies
    • Education
    • Futures Op-Ed
  • Favorites
    • Alpha Pages Most Popular
    • Futures Magazine
    • Modern Trader Magazine
    • Most Popular
    • Slideshows & Lists
    • Special Topics
      • Alpha Hunters
      • Bad Boys
      • FINtech
      • High-Frequency Trading
      • Trader's Life
      • Trading Strategies
      • FUTURES MAG's 500th ISSUE
      • We asked traders
  • Traders
    • Market Data
    • Hot Charts
    • Interactive Charts
    • Trading Calendar
  • FINalternatives
  • Hard Assets
    • Home
    • Base Metals
    • Precious Metals
    • Rare Earth Metals
    • Commodities
    • Mining Investments
    • Slideshows
  • Modern Trader
    • Subscribe
    • Past Issues
  • All +
    • Follow Us +
      • FuturesMag
      • Newsletters
      • Facebook
      • Google+
      • Linkedin
      • Twitter
      • RSS Feeds
    • About Us +
      • About
      • Advertise
      • Contact
      • Contribute
      • Privacy Policy
  • !
Follow Futures          
       
more >>

We Asked Traders

We asked traders for their opinion on the launch of bitcoin futures

Sponsored Content

Trading

Equities.com launches unlimited trading via Tradier Brokerage, Transforming into a news & fintech portal

Featured Topics

more Commodities>>

Commodities

Energy demand steps back in play
Advertisement
more Volatility>>

Volatility

Volatility & opportunity in the energy sector
more Financials>>

Financials

Daily Price Action: E-mini S&P 500
more Options>>

Options

Trading Vertical Option Spreads

Advertisement

CBOE’s Brodsky says transaction tax would harm U.S. liquidity

By Nikolaj Gammeltoft, Bloomberg

March 4, 2013 • Reprints

The European plan to impose a levy on financial transactions will affect investors and companies trading in the U.S. and may harm market liquidity, William Brodsky of CBOE Holdings Inc., said today.

The EU on Feb. 14 unveiled its proposal for taxes of 0.1% on stock and bond trades and 0.01% on derivatives. To prevent traders from escaping the levy by operating outside the tax’s zone, the EU plan invokes “residence” and “issuance” ties to firms in participating nations. That means, for example, that a French bond traded in London would still be affected.

“All of it is very disturbing,” Brodsky, chairman and chief executive officer of CBOE, said in a presentation at the exchange’s Risk Management Conference in Carlsbad, California. “It’s intended to have an extra-territorial reach,” he said. “It would affect companies such as a Royal Dutch and Unilever that trade in the U.S. even though the tax applies in Europe.”

Some Democratic lawmakers in the U.S., including Senator Tom Harkin of Iowa and Representative Peter DeFazio of Oregon, back similar proposals in the U.S. While Algirdas Semeta, the European Union’s tax commissioner, last month urged U.S. supporters of a financial transaction tax to keep up their efforts, the proposal has gained little momentum in Congress and with the administration of Barack Obama. The Treasury Department opposed the EU tax, warning about the effects on U.S. investors.

Liquidity Concern

“It’s very concerning because at a time when the market structure is very changed from the way it was years ago, I worry about liquidity,” said Brodsky, who is stepping down as CEO of Chicago-based CBOE in May. The exchange is the largest options market by volume. “Any of you, particularly institutional investors, who understand how important liquidity is to be able to get things done, to have things that will throw sand in the gear does not to me look very helpful.”

Europe’s plans have been dubbed the Tobin tax after U.S. economist James Tobin, who in 1972 suggested taking a cut of foreign-exchange trades to limit currency speculation. History is littered with government attempts to extract revenue from financial transactions, not all of which were successful and most of which had unintended consequences.

The proposal, which seeks raise revenue for national governments, excludes certain types of trading: Day-to-day transactions by individuals and non-financial firms; primary offerings of stocks and bonds; and trades with central banks, the European Stability Mechanism and other official institutions. The tax also excludes primary-market trades in units of collective investment funds along with certain restructuring operations.

To become law, the proposal must be approved by the EU nations that agreed to consider imposing the tax. They now include Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia.

Bloomberg News

About the Author

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Related Articles
Daily Price Action: E-mini S&P 500
Daily Price Action: E-mini S&P 500
Daily Price Action: E-mini S&P 500
GBP/USD drops as weak CPI reduces BoE May rate rise odds
Daily Price Action: E-mini S&P 500
Previous
U.S. stocks rise, Treasuries fall as oil slides to two-month low
Next
CME’s Asian business expanding 35%, stoked by gold to currencies
Related Terms
financials 2975European Union 2864Congress 1894California 1387Barack Obama 909Regulation 344Department of the Treasury 274Iowa 249CBOE 207Oregon 163Tax 143Brodsky 71CBOE Holdings Inc. 56William Brodsky 25Transaction tax 22Tom Harkin 16Unilever 15Royal Dutch 8Brodsky 6Peter DeFazio 6James Tobin 5

Free Newsletter Modern Trader Follow

Main menu

  • Futures
    • Modern Trader Magazine
    • Commodities
    • Futures Mag Archives
    • ETFs
    • Financials
    • Forex
    • Managed Funds
    • Market Analysis
    • News
    • Options
    • Regulation
    • Technology
    • Trading Strategies
    • Education
    • Futures Op-Ed
  • Favorites
    • Alpha Pages Most Popular
    • Futures Magazine
    • Modern Trader Magazine
    • Most Popular
    • Slideshows & Lists
    • Special Topics
      • Alpha Hunters
      • Bad Boys
      • FINtech
      • High-Frequency Trading
      • Trader's Life
      • Trading Strategies
      • FUTURES MAG's 500th ISSUE
      • We asked traders
  • Traders
    • Market Data
    • Hot Charts
    • Interactive Charts
    • Trading Calendar
  • FINalternatives
  • Hard Assets
    • Home
    • Base Metals
    • Precious Metals
    • Rare Earth Metals
    • Commodities
    • Mining Investments
    • Slideshows
  • Modern Trader
    • Subscribe
    • Past Issues
  • All +
    • Follow Us +
      • FuturesMag
      • Newsletters
      • Facebook
      • Google+
      • Linkedin
      • Twitter
      • RSS Feeds
    • About Us +
      • About
      • Advertise
      • Contact
      • Contribute
      • Privacy Policy
  • !
images