2013 Italian Financial Transaction Tax

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "2013 Italian Financial Transaction Tax"

Transcription

1 Italy 2013 Italian Financial Transaction Tax Vittorio Salvadori di Wiesenhoff* and Roberto Egori** The authors review the newly introduced Italian financial transaction tax, which, in principle, affects all transactions in Italian equity instruments traded and settled as from 1 March 2013 and Italian equity derivatives traded as from 1 July Introduction 1.1. European financial transaction tax proposal under enhanced cooperation procedure In September 2011, the European Commission issued a proposal for a Council Directive on a common system of financial transaction tax (the FTT Proposal), the essence of which was that a low-rate, broad-base tax would be applied to all financial transactions with any economic link to the European Union. Although in May 2012 the European Parliament adopted an opinion supporting the FTT Proposal, subsequently, there was consensus at the Ecofin Council meetings in June and July 2012 that unanimity would not be reached within a reasonable period. Nonetheless, a significant number of EU Member States were willing to have a common system of FTT. Therefore, during September and October 2012, 11 Member States (the Member States), including Italy, formally requested to proceed through enhanced cooperation. 1 They wrote to the Commission, requesting a Decision to be submitted to the Council to enable them to move ahead as a smaller group, on the basis of the objectives and scope of the FTT Proposal. On 23 October 2012, the Commission issued a proposal for a Council Decision authorizing enhanced cooperation for purposes of a financial transaction tax between the mentioned restricted number of Member States, and submitted this proposal to the Council. The Council adopted the decision authorizing the Member States of the enhanced cooperation group to proceed with the introduction of a financial transaction tax through enhanced cooperation on 22 January Following the Council decision, on 14 February 2013 the EU Commission published its proposal for a Directive * Partner, Freshfields Bruckhaus Deringer LLP, Milan. The author can be contacted at ** Senior associate, Freshfields Bruckhaus Deringer LLP, Milan. The author can be contacted at This article has been issued on 22 March 2013 and is based on Italian tax law in force as at that date. 1. The enhanced cooperation procedure applies when a group of at least nine Member States decides that they will move ahead with an initiative proposed by the European Commission when it proves impossible to reach unanimous agreement thereon. implementing enhanced cooperation in the area of financial transaction tax (the FTT Directive). The proposed FTT Directive will now be discussed by all 27 Member States (although only those of the enhanced cooperation group will be eligible to vote on it, and they must agree unanimously) Italian financial transaction tax Pending the discussions regarding the possible enactment of a European Directive in the area of FTT under the socalled enhanced cooperation procedure (see section 1.1.), Italy has decided to push ahead with its own domestic FTT (Italian FTT). The Italian FTT was introduced by article 1, paragraphs 491 to 500 of Law 228 of 24 December 2012 (Legge di Stabilità 2013, the Stability Bill), which was published in the Italian Official Gazette on 29 December Paragraph 500 of article 1 of the Stability Bill requires the Ministry of Economy and Finance to set out the operational rules, including any reporting obligations, for the application of the FTT in a decree (the Treasury Decree) to be issued within 30 days from the entry into force of the Stability Bill. On 31 January 2013, the Ministry of Economy and Finance published on its website a draft of the Treasury Decree (the Draft Decree) with a view to gathering suggestions from any interested parties, in the context of a public consultation process which ended on 4 February. The final version of the Treasury Decree, which differs in several regards from the Draft Decree, was signed on 21 February and made available, together with an Explanatory Memorandum, on the website of the Ministry of Economy and Finance the following day. The Treasury Decree was then published in the Official Gazette No. 50 of 28 February On 19 March 2013, the Ministry of Economy and Finance published on its website a new decree (dated 18 March) amending articles 17 and 19(4) of the Treasury Decree (the 18 March Decree). The Director of the Revenue Agency (Direttore dell Agenzia delle Entrate) is required by the Treasury Decree to issue several regulations in relation to the Italian FTT, concerning, among other things, reporting and payment obligations. To date, most of these regulations have not been issued. 2 Also, the general guidelines of the Revenue Agency 2. In particular, the Director of the Revenue Agency shall still issue specific regulations on: reporting, payment of the FTT and connected instrumental formalities (article 19(5)), modalities for the tax identification of foreign persons required to pay and report the tax (article 19(8)) and modalities for claiming refunds of the tax unduly paid (article 22). Furthermore, based on the changes in article 19(4) of the Treasury Decree made by the 18 March Decree, the Director of the Revenues Agency shall 48 DERIVATIVES & FINANCIAL INSTRUMENTS MARCH/APRIL 2013 IBFD

2 2013 Italian Financial Transaction Tax on the Italian FTT have not been published yet and the timing of their publication cannot be predicted. 2. Initial Proposal of the Italian Government Based on the initial proposal made by the government and reflected in the first draft of the Stability Bill approved by the Chamber of Deputies on 22 November 2012: Italian FTT would be applicable as from 1 January 2013 at the rate of 0.05% in respect of transactions in: shares and other participating financial instruments issued by Italian tax-resident companies (also when the transactions are executed abroad, provided that at least one of the counterparties is Italian tax resident); and derivatives, other than derivatives over government bonds issued by EU or EEA countries allowing an adequate exchange of information, provided that one of the counterparties is Italian tax resident; for transactions in shares and participating financial instruments, Italian FTT would be due on the value of the relevant transaction. For derivatives, Italian FTT would be due on the notional amount; Italian FTT would be due equally by the parties to the relevant transactions and would be collected and remitted to the tax authorities by the relevant bank or other financial intermediary which intervenes in the execution of the transactions; Italian FTT would not be due: on issues and cancellations of shares and other participating financial instruments; or when the counterparty is the European Union, the European Central Bank, central banks of EU Member States, central banks and organizations managing the official reserves of other states or entities and international organizations established on the basis of international agreements ratified by Italy; the Ministry of Economy and Finance would have to set out the operational rules for the application of Italian FTT in a decree to be issued within 60 days from the date of entry into force of the Stability Bill; and where Italian FTT is not properly paid, the related transactions would be null and void. As mentioned below, this initial proposal has been almost entirely amended during the approval process of the Stability Bill. 3. Final Financial Transaction Tax Rules Approved by the Parliament 3.1. General overview On 12 December 2012 the Italian government presented its proposed amendments to the draft Italian FTT rules, which completely revisit, as better detailed below, the update the white list of countries published on 1 March (see in this respect section ). regime summarized in section 2., which is therefore no longer relevant. Based on the final wording of the provisions (which are contained in article 1, paragraphs from 491 to 500 of the Stability Bill), Italian FTT applies to certain transactions in shares, other equity instruments, equity derivatives and to certain high-frequency trading transactions in shares, other equity instruments and equity derivatives. It is no longer provided that the failure to properly pay Italian FTT would render the transactions null and void. The relevant transactions are taxable, irrespective of the place where they are executed (with the exception of highfrequency transactions, which are taxable only if executed on the Italian financial market) and irrespective of the country of residence of the counterparties Italian financial transaction tax on equity trades Equity instruments subject to Italian financial transaction tax Italian FTT is due in respect of the transfer of ownership of the following equity instruments (chargeable equities): (1) shares 3 issued by companies having their registered office in Italy 4 and, in the case of listed shares only, an average market capitalization in November of the previous year of more than EUR 500 million; 5 3. Article 1(2)(c) of the Treasury Decree defines shares as follows: stocks of companies belonging to one of the following types, even if falling into a special category, and regardless of the assignment of certain administrative or property rights: companies under Italian law known as società per azioni, società in accomandita per azioni and European companies referred to in Regulation (EC) 2157/2001, as well as stakes of companies under Italian law known as società cooperative and mutue assicuratrici, unless the articles of incorporation stipulate that the laws for companies under Italian law known as società a responsabilità limitata pursuant to Article 2519, paragraph 2 of the Italian Civil Code, should apply. Unless otherwise stated, the source of all translations is the unofficial translation of the Treasury Decree and of its Explanatory Memorandum published on the Ministry of Economy and Finance website ( it/primo-piano/article_0099.html). 4. Article 2(1) of the Treasury Decree states that the FTT applies on the transfer of shares and participating financial instruments issued by Italian resident companies. Art. 2(1) also provides that, for purposes of Italian FTT, the residence shall be determined on the basis of the registered office. The Explanatory Memorandum clarifies that in case such [registered] office is transferred in Italy from abroad or vice versa, the date on which the transfer becomes valid is relevant ( it/primo-piano/documenti/ftt_decree_explanatory_memorandum. pdf ). 5. Under article 17 of the Treasury Decree, the Ministry of Economy and Finance must draft and publish on its website, by 20 Dec. of each year, a list of companies with a market capitalization of less than EUR 500 million. For 2013, the list, which at present includes only Italian resident companies the shares of which are negotiated on an Italian regulated market or multilateral trading facility, is attached to the Treasury Decree ( ). Article 17(3) states that the Ministry of Economy and Finance would publish another list by 1 Mar. 2013, including Italian resident companies the shares of which are negotiated on a foreign regulated market or multilateral trading facility. For the purpose of drafting this second list, which has not been published yet, Italian resident companies the shares of which are negotiated on a foreign regulated market or multilateral trading facility must send to the Ministry of Economy and Finance (in theory by 20 Feb. 2013, even though the Treasury Decree was published after that date) a written communication certifying the value of their own capitalization, enclosing thereto an ad hoc certification issued by the relevant regulated market under the Markets in Financial Instruments Directive or by the operator of a multilateral trading facility, if more relevant in terms of exchange value. IBFD DERIVATIVES & FINANCIAL INSTRUMENTS MARCH/APRIL

3 Vittorio Salvadori di Wiesenhoff and Roberto Egori (2) participating financial instruments governed by article 2346, paragraph 6 of the Italian Civil Code, 6 issued by companies having their registered office in Italy; 7 and (3) securities representing the shares and instruments in (1) and (2), irrespective of the residency of the relevant issuer (e.g. ADRs, GDRs, EDRs). 8 Article 15(1) (i) of the Treasury Decree excludes from the scope of application of Italian FTT those transactions entailing the transfer of the ownership of securities representing equity investment or participating financial instruments issued by companies referred to in article 17 of this Decree. Accordingly, transactions in depositary receipts representing shares issued by Italian resident companies with an average market capitalization in November of the previous year lower than EUR 500 million, as per the list published annually by the Minister of Economy and Finance, are outside the scope of Italian FTT. Italian FTT applies irrespective of: whether the chargeable equities are listed on a regulated market or a multilateral trading facility; the place where the transactions are executed; and the state of residence of the counterparties. Italian FTT does not apply to transactions in financial instruments other than those falling within the list of chargeable equities considered above (and other than those which qualify as chargeable derivatives, as detailed below). More specifically, transactions in the following instruments are not subject to Italian FTT: quotas of Italian limited liability companies (società a responsabilità limitata); interests in Italian partnerships; shares or units in Italian or foreign collective investment undertakings; 9 6. Article 1(2)(c) of the Treasury Decree defines participating financial instruments as follows: the financial instruments referred to in Article 2346, sixth paragraph of the Civil Code and issued by companies listed under letter c), which assign certain administrative and property rights against contributions by shareholders or third parties, resulting in any form of participation of the instrument holder to the performance of the company or of some of its branches of business, including the financial instruments for participating to a single transaction referred to in Article 2447-ter, paragraph 1, letter e) of the same Civil Code. 7. See supra n Under article 1(2)(f ) of the Treasury Decree the definition of securities representing equity investments is as follows: depositary receipts in respect of shares and other certificates representing shares or participating instruments, as referred to in letter d) above, issued by companies resident in the Italian territory. The Explanatory Memorandum clarifies that these securities representing equity investments consist of securities representing shares or other participating financial instruments issued by Italian resident companies (i.e. American Depositary Receipts and Global Depositary Receipts). 9. Article 2(2) of the Treasury Decree specifically states that transfers of the ownership of shares or units in collective investment undertakings, including SICAVs, are excluded from the scope of Italian FTT. The Explanatory Memorandum clarifies that the same applies in respect of units in exchange-traded funds (ETFs). bonds and debt securities; 10 and equity linked notes Transfer of ownership Italian FTT applies when a given transaction results in a transfer of ownership of chargeable equities. Article 3(1) of the Treasury Decree clarifies that in case of transactions in chargeable equities admitted to centralized securities depositories (including, as specified in the Explanatory Memorandum, those recognized by foreign supervisory authorities), transfers of ownership are generally deemed to take place on the date of their settlement, which is defined as the date of registration of the transfers following the settlement of the relevant transaction. The same provision, however, also allows for the option to make reference to the contractual settlement date. 12 Pursuant to article 3(2), for transactions in chargeable equities not admitted to centralized securities depositories, the transfer of ownership occurs on the date on which the title is transferred (arguably, under applicable laws and contractual arrangements). Under article 3(3) of the Treasury Decree, transfers [of ownership] resulting from the conversion of bonds into shares as well as transfers arising from the exchange or the refund of bonds with shares or other participating financial instruments are also relevant for FTT purposes. In these circumstances, the transfer of ownership is deemed to occur on the date in which the conversion, exchange or refund have effect. Another important confirmation is included in article 3(4) of the Treasury Decree which rules that the transactions executed by intermediaries (e.g. executing brokers) in their name but on behalf of their clients do not trigger any double taxation (being deemed to be a single transfer of ownership occurring in the hands of the ultimate client). The Explanatory Memorandum points out that this principle applies a fortiori when the intermediaries act as disclosed agents. Transactions executed by intermediaries acting in a riskless principal capacity may not fall within the scope of application of article 3(4), being rather governed by the rule in article 15(2)(a) of the Treasury Decree (see below). 10. Article 15(1)(b) of the Treasury Decree specifically excludes from Italian FTT transactions in bonds and debt securities. This specific exclusion is justified in the Explanatory Memorandum to resolve possible construction doubts (in particular with reference to convertible debt securities and bonds with embedded derivatives), as these instruments could potentially be construed as chargeable derivatives for Italian FTT purposes. 11. Equity-linked notes reference (but do not represent ) the underlying equities. As such, these instruments should in any event not fall within the definition of chargeable equities, but may qualify as chargeable derivatives in certain circumstances. 12. Article 3(1) of the Treasury Decree reads as follows [ ] Alternatively, the person liable to the payment of tax [generally, one of the intermediaries listed in article 19 of the Treasury Decree, involved in the execution of the transaction], subject to the taxpayer s [i.e. the purchaser s] consent, may assume the date of liquidation stipulated in the contract as the date of the transaction. The Explanatory Memorandum clarifies that the taxpayer s consent can also be obtained in the form of silence means consent. 50 DERIVATIVES & FINANCIAL INSTRUMENTS MARCH/APRIL 2013 IBFD

4 2013 Italian Financial Transaction Tax Tax rate Pursuant to articles 6(1) and 21(5) of the Treasury Decree, transactions in chargeable equities are taxable at the following rates (unless an exemption or exclusion applies): in 2013 (as from 1 March), at the ordinary rate of 0.22%, reduced to 0.12% for transfers of ownership taking place as a result of transactions effected on regulated markets or multilateral trading facilities ; 13 and as from 1 January 2014, at the ordinary rate of 0.2%, reduced to 0.1% for transactions effected on regulated markets or multilateral trading facilities. Article 6(1) of the Treasury Decree clarifies that the reduced rate applies also to transactions in chargeable equities executed: through a financial intermediary, interposed between the parties to the transaction, purchasing the above instruments on a regulated market or a multilateral trading facility, provided that price, total number and date of settlement of buying and selling transactions coincide. Even though the Treasury Decree and the Explanatory Memorandum are silent on this point, in the authors view it is reasonable to assume that fees should not be computed for the purposes of the required price coincidence of buying and selling transactions. Article 6(3) states that: if the tax base is determined as the net balance between purchases and sales executed on regulated markets or multilateral trading facilities, and other purchases and sales, the tax rate shall be equal to the average of the weighted rates by the number of securities purchased. Accordingly, a blended rate applies in the event of netting between (i) purchases and sales executed on regulated markets or multilateral trading facilities and (ii) other purchases and sales (i.e. over the counter ): in these circumstances, in fact, the actual tax rate would be equal to the average of the rates, weighted by the number of chargeable equities purchased, respectively, on regulated markets/ multilateral trading facilities and over the counter. 13. Under article 1(2)(f ) of the Treasury Decree, regulated markets and multilateral trading platforms are the markets and systems recognized pursuant to Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004, relevant to the Economic European Area, as included in the list published in the specific section of the European Securities and Markets Authority website ( europa.eu/) for the purposes provided for in paragraph 2 of Article 13 of (EC) Regulation 1287/2006 of the Commission of 10 August 2006, provided that they are established in States and territories included in the list referred to in the Ministerial Decree issued in accordance with Article 168-bis of TUIR [the Italian Income Tax Code]. In the case of the States to which the aforesaid provisions do not apply, regulated markets and multilateral trading facilities are considered those in regular operation and authorized by a National Public Authority with State supervision, including therein those recognized by CONSOB pursuant to Article 67, paragraph 2 of the Consolidated Finance Act [Testo Unico della Finanza, TUF], provided that they are established in States and territories included in the list referred to in the above Ministerial Decree. As the Ministerial Decree referred to in article 168-bis of the TUIR has not yet been issued, reference for the time being should be made to the list of countries allowing an adequate exchange of information, as contained in the Decree of 4 September 1996 (the 1996 Decree). Last but not least, article 6(5) of the Treasury Decree states the higher rate applies to the purchase of chargeable equities in the case of physical settlement of chargeable derivatives Transactions effected on regulated markets and multilateral trading facilities The reduced rate, as above mentioned, applies prima facie to transfers of ownership of chargeable equities taking place as a result of transactions effected on regulated markets or in multilateral trading facilities. Article 6(4) of the Treasury Decree (first sentence) clarifies that: operations attributable to negotiated transactions pursuant to Article 19 of EC Commission Regulation 1287/2006 of 10 August 2006, where they are provided by the market shall also be treated as transactions effected on regulated markets and on multilateral trading facilities. The Explanatory Memorandum points out that under article 6(4), the reduced rate applies: where purchases do not take place on a regulated market or a multilateral trading facility, but, upon the intermediary s request, the transactions are registered by the market or multilateral trading facility operator (so-called on exchange transaction ), by relying upon the option provided for by Directive 2004/39/EC. Article 19 of the above-mentioned Commission Regulation states that for purposes of article 18(1)(b) of the same Regulation, 14 negotiated transaction will mean a transaction involving members or participants of a regulated market or a multilateral trading facility which is negotiated privately but executed on the regulated market or multilateral trading facility and where that member or participant, in doing so, undertakes one of the following tasks: dealing on own account with another member or participant who acts for the account of a client; dealing with another member or participant, where both are executing orders on own account; acting for the account of both the buyer and seller; acting for the account of the buyer, where another member or participant acts for the account of the seller; or trading for own account against a client order. Market participants may enter into transactions which are negotiated privately and then brought on exchange 14. The Markets in Financial Instruments Directive (MiFID Directive 2004/39/EC) allows competent authorities to waive, in certain circumstances, the obligation for operators of regulated markets and multilateral trading facilities, the requirements regarding pre-trade transparency for shares. Under article 18(1)(b) of Commission Regulation 1287/2006, one such waiver may be granted by the competent authorities for systems operated by a multilateral trading facility or a regulated market, which formalize negotiated transactions (as defined in article 19), each of which meets one of the following criteria: (1) it is made at or within the current volume weighted spread reflected on the order book or the quotes of the market makers of the regulated market or multilateral trading facility operating that system or, where the share is not traded continuously, within a percentage of a suitable reference price, being a percentage and a reference price set in advance by the system operator; or (2) it is subject to conditions other than the current market price of the share. IBFD DERIVATIVES & FINANCIAL INSTRUMENTS MARCH/APRIL

5 Vittorio Salvadori di Wiesenhoff and Roberto Egori via the negotiated transaction process provided by an exchange of which they are a member. 15 In the authors opinion, the first sentence of article 6(4), as quoted above, should be interpreted such that transactions which are negotiated privately by market participants, being, however, reported as negotiated transactions to an exchange and meeting the conditions (whether as to capacity, price or otherwise applicable to that type of transaction) as imposed by that exchange in respect of such negotiated transaction, in accordance with the waiver granted by the competent authority, should be seen as being effected on a regulated market or multilateral trading facility. However, the second sentence of article 6(4), gives rise to some concerns as to which negotiated transactions will be treated as transactions effected on regulated markets and multilateral trading facilities for purposes of Italian FTT, so as to be eligible for the reduced rate. This second sentence of article 6(4) reads as follows: On the contrary, transactions carried out bilaterally by intermediaries, including those executed on internalization systems and so-called crossing networks, irrespective of the procedures to comply with post-trade transparency obligations, shall be treated as transactions effected outside regulated markets and multilateral trading facilities. Indeed, most (if not all) negotiated transactions are carried out bilaterally by intermediaries. Accordingly, the purpose of this second sentence of article 6(4) cannot be to exclude negotiated bilateral transactions involving intermediaries. In addition, trades executed on some internal crossing networks and other internalization systems could qualify for the negotiated trade waiver (the term negotiated does not necessarily exclude transactions that are negotiated electronically through a matching engine). A possible interpretation of the second sentence of article 6(4) is that the mere reporting of a transaction to an exchange to meet post-trade transparency requirements, but which does not bring that transaction under the rules of the exchange via the negotiated transaction facility, will not be sufficient to qualify that trade as being effected on a regulated market or multilateral trading facility for purposes of the reduced tax rate Tax base; netting for intra-day trades Italian FTT is due on the value of the relevant transaction, which is defined in article 4(1) as the net balance of transactions regulated on a daily basis, calculated for each liable person with reference to the number of securities traded on the same day and relating to the same financial instrument. The net balance will be calculated by the intermediaries that, by operation of article 19, are responsible for the payment of the tax. Based on article 4(1) of the Treasury 15. Currently both Borsa Italiana and the London Stock Exchange offer negotiated transaction facilities under a waiver granted by the competent authority in accordance with articles 29(2) and 44(2) of Directive 2004/39/EC. Decree and the clarifications given in the Explanatory Memorandum, the netting calculations entail the following steps: determine separately purchases and sales made on regulated markets or multilateral trading facilities and those made outside such markets; sum up algebraically the relevant results; and if and to the extent that the algebraic sum is a positive figure, the tax is due and the tax base is determined as the product of the number of securities representing the final net balance multiplied by the weighted average price of the purchases. Under article 4(3) purchases and sales excluded or exempt from the tax, referred to in articles 15 and 16, are not included in the calculation of the net balance. 16 The Explanatory Memorandum also clarifies that in the netting calculations, the purchases and sales of Depositary Receipts cannot be summed up with the purchases and sales of the securities represented by them. Article 4(2) states that for purposes of calculating the tax basis, the term purchase price means: in the case of market purchases: the consideration paid for acquiring the securities; in case of physical settlement of chargeable derivatives: the fixed exercise value or the normal value determined pursuant to paragraph 4 of article 9 of the Income Tax Code (Testo Unico delle Impose sui Redditi, TUIR), whichever is greater. Article 9 of the TUIR details the criteria for determining the fair value for tax purposes. So, on physical settlement, Italian FTT would be payable on the greater of the strike price or the fair value of the equities (to be determined under the rules set forth by article 9, which states that for listed shares, the fair value will be equal to the average market price in the last month). This rule seems to have an anti-abuse purpose: e.g. in the case of physical settlement of a low exercise call option (LEPO) the tax would be payable on the fair value of the chargeable equities and not on the negligible strike price; in the case of conversions, exchanges or refunds of bonds with chargeable equities: the value established in the issue prospectus; and in all other cases: the value stipulated in the contract or, in the absence thereof, the fair value to be determined under Italian income tax law (again, reference is made to article 9(4) of the TUIR). 16. The Explanatory Memorandum provides a numerical example to clarify the netting mechanics: for example: a person X purchases on the same day 10 securities A at 50 (on a regulated market); 20 securities A at 49 (exempt purchase); 15 securities A at 51 (purchase over the counter ). The same person sells on the same day: 15 securities (on a regulated market); 5 securities ( over the counter ). The net balance of the relevant purchases on regulated markets is 5; the net balance of the relevant purchases over the counter is 10. The net balance between the two is 5. The weighted average price for the purchase of the securities is: ( )/25 = The tax base is equal to euro: = 253. In this example, the average tax rate to be applied, based on art. 6(3) of the Treasury Decree, would be determined as follows: (15 0.2% %)/25 = 0.16%. Hence, the tax would be % = 0.40 euro. 52 DERIVATIVES & FINANCIAL INSTRUMENTS MARCH/APRIL 2013 IBFD

6 2013 Italian Financial Transaction Tax Article 4(4) of the Treasury Decree allows persons carrying out a number of transactions through several intermediaries to make the election for the so-called cross-broker netting. This consists in the calculation of a single net balance [...] amounting to the algebraic sum of the balances relating to each intermediary. For these purposes, the taxpayer must make a specific request indicating a single intermediary responsible for the payment of the tax. The effectiveness of the option for the single net balance calculation is conditional upon the acceptance of the intermediaries involved (which may well refuse) and upon their transmission of the information necessary for the calculation. The appointed intermediary, which is liable vis-à-vis the Italian tax authorities for any miscalculations of the FTT due (even where this may occur as a consequence of erroneous information supplied by the other intermediaries), may request that the Centralized Management Company (the CMC) calculates the single net balance. In this case, the CMC reports the relevant net balance to the intermediary liable for the payment of the tax. Article 4(5) provides clarification as regards the foreign exchange rates that must be taken into account when computing the taxable basis of a transaction in chargeable equities in currencies other than euro. If the transaction has a euro settlement, reference is to the exchange rate actually applied to the transaction. In the other cases, reference is to the exchange rate shown in the specific section of the European Central Bank s website 17 relating to the day of the purchase Persons liable to Italian financial transaction tax on chargeable equities Under article 5 of the Treasury Decree, the Italian FTT on equity trades is due by the persons to which the chargeable equities are transferred (i.e. the purchasers), irrespective of their place of residence or the place where the contract is concluded. As further considered below, article 19 of the Treasury Decree identifies the persons which are responsible for the payment of the tax Entry into force Pursuant to article 21(1) of the Treasury Decree, the Italian FTT applies to transfers of ownership of chargeable equities (also upon conversion of bonds or physical settlement of chargeable derivatives) where settlement occurs on or after 1 March 2013 and the trade date if after 28 February By way of derogation to the ordinary payment deadlines, the FTT due on transactions executed in March, April and May shall be remitted to the tax authorities within 16 July See Italian financial transaction tax due on equity derivative trades Equity derivative trades subject to Italian financial transaction tax In article 7(1) of the Treasury Decree, Italian FTT on equity derivative trades will be due in respect of transactions in the following derivative instruments (chargeable derivatives): financial derivatives referred to in article 1(3) of the TUF (unsecuritized derivatives: futures, options, swaps, forwards, contracts for difference), both traded on regulated markets or multilateral trading facilities and subscribed or traded outside these markets, where their underlying is prevailingly represented by one or more of the chargeable equities or where their value depends prevailingly on one or more of those same chargeable equities; and transferable securities (valori mobiliari) referred to in article 1(1-bis)(c) and (d) of the TUF (securitized derivatives), 18 giving the right to acquire or sell prevailingly one or more of the chargeable equities or giving rise to a cash settlement determined prevailingly by reference to one or more of the chargeable equities. The Stability Law specifically includes warrants, covered warrants and certificates within the concept of transferable securities. Pursuant to article 7(2) of the Treasury Decree, the financial instruments and transferable securities referred to in paragraph 1 qualify as chargeable derivatives: provided that the underlying or reference value consists for more than 50 per cent of the market value of [chargeable equities] [ ] measured on the date of issuance for the financial instruments and transferable securities [ ] which are traded on regulated markets and multilateral trading facilities and on the date of conclusion of the transaction in the other cases. 19 On the basis of the above, prevailingly means that the underlying assets or the reference value shall consist for more than 50% of chargeable equities. This 50% test shall be conducted (i) on the date of issuance in the case of derivatives that are traded on regulated markets and multilateral trading facilities and (ii) on the date of conclusion of the transaction in the other cases. In this respect, it is worth noting that, as better explained in section , the conclusion of the transaction is defined in article 8 of the Treasury Decree as the time of subscription, negotiation or modification of the contract. Arguably, for derivatives which are not traded on regulated markets and multilateral trading facilities the 50% test should therefore be conducted at the time of subscription, negotiation or modification of the contract. 18. Article 1(1-bis)(c) and (d) of the TUF reads as follows: securities shall mean categories of securities for trading on the capital market, such as: [ ] c) any other security normally negotiated which permits the purchase or sale of securities indicated in the preceding paragraphs; d) any other security usually involving cash settlement determined with reference to securities indicated in the preceding paragraphs, to currency, interest rates, returns, commodities, indices or measures. 19. Authors translation (since the unofficial translation published on the Ministry of Economy and Finance website is inaccurate on this point). IBFD DERIVATIVES & FINANCIAL INSTRUMENTS MARCH/APRIL

7 Vittorio Salvadori di Wiesenhoff and Roberto Egori Article 7(2) further states that where the underlying or reference value are represented by measurements on shares or indices, the test under the preceding sentence shall be carried out on the shares or indices which the measurements refer to. In addition, non-equity components of the underlying are not taken into consideration. 20 Indeed, the part relating to the underlying or reference value represented by securities other than shares in companies and other securities equivalent to shares in companies, partnerships or other entities, and depositary receipts in respect of shares shall not be relevant for purposes of this calculation Taxable event; conclusion of the transaction Under article 8 of the Treasury Decree, transactions in chargeable derivatives are taxable at the time of conclusion of the transaction to be understood, respectively, as the time of subscription, negotiation or modification of the contract and as the time of transfer of ownership of such transferable securities. 21,22 Modification of the contract means, for the above purposes, a variation of its notional value, parties or maturity. 23 However, under the same article 8, where the notional value is modified upward, on an automatic and not discretionary basis, under a contractual provision, the tax will be applied only to the variation of the notional value. Arguably, where the notional value is modified upward on a discretionary basis or downward (regardless of whether this happens automatically or discretionarily), the tax should be applied taking into account the fully updated notional Notional value As further considered in section , the FTT on chargeable derivatives is due at a flat amount, which varies depending on the nature of the instrument and its notional value. Article 9 of the Treasury Decree lays down the criteria for the determination of the notional value of the different categories of chargeable derivatives. 24 The Explanatory Mem- 20. Indeed, the last sentence of article 7(2) states that: The part relating to the underlying or reference value represented by securities other than shares in companies and other securities equivalent to shares in companies, partnerships or other entities, and depositary receipts in respect of shares shall not be relevant for purposes of this calculation. The reference to partnerships and entities other than companies can be criticized, as such instruments are excluded from the notion of chargeable equities for Italian FTT purposes. 21. See supra n Article 8 clarifies that in order to establish the time from which the transfer of the ownership of transferable securities [securitized derivatives] has taken place, reference is made to the provisions of Article 3 dealing with the transfer of chargeable equities. 23. The Explanatory Memorandum clarifies that even if there is no specific provision [ ] in case of modification of one of the parties, the tax is payable by the party taking over the contract, as well as by the relevant counterparty (and not by the party that has been replaced). 24. Article 9 reads as follows: For the sole purposes of this Decree and of the tax application, notional value of the transaction shall mean: 1) for stock index futures traded on regulated markets or on multilateral trading facilities, the number of standard contracts multiplied by the number of index points under which the contract is traded by the value assigned to the index point; 2) for single stock futures traded on regulated markets or multilateral trading facilities, the number of standard contracts multiplied by the price of the futures by the standard contract size; 3) for stock index options traded on regulated markets or on multilateral orandum clarifies that for the sole purpose of determining the taxable basis of transactions in chargeable derivatives, it has been decided: to consider the premium as the notional value for financial instruments, both derivatives and not, which have an optional component: essentially, it is the price an investor is ready to pay (or receive) to subscribe the option. Therefore, regardless of the complexity relating to construction of the reference value of the option (or of the security that includes one or more options), this value is always known to investors and intermediaries and can be easily assessed by the Tax Administration. Article 9(2) sets out a rule for leveraged derivative instruments, stating that if the notional value of the chargeable derivatives, other than those under numbers 3, 4, 5, 9, 10 and 11 of article 9(1) (i.e. other than options, warrants, covered warrants and certificates), 25 is amplified due to the structure of the transaction, one must make reference to the actual notional value, which is equal to the reference notional value of the contract multiplied by the leverage effect. 26 Under article 9(3), if the notional value of chargeable derivatives, other than those under numbers 3, 4, 5, 9, 10 and 11 of article 9(1) (i.e. other than options, warrants, covered warrants and certificates): 27 is represented also by instruments other than shares, participating financial instruments and securities representing equity investment, for purposes of this paragraph, only the notional value of these shares, instruments and securities shall be taken into consideration. Based on the definitions of shares, participating financial instruments and securities representing equity investments contained in article 1 of the Treasury Decree, it may be argued that, under article 9(3), one shall compute exclusively the part of the notional value relating to chargeable equities. Even though this conclusion does not stem trading facilities, the number of standard contracts multiplied by the contract price (premium) expressed in index points multiplied by the value assigned to the index point; 4) for stock options traded on regulated markets or on multilateral trading facilities, the number of standard contracts multiplied by the contract price (premium) multiplied by the standard contract size; 5) for other options, the price (premium) paid or received for entering into the contract; 6) for forward contracts, where the underlying is even indirectly an index, the product of the forward unit value of the index and the number of units of the index under the contract; where the underlying are even indirectly shares, the number of shares multiplied by the forward price; 7) for swap contracts, the amount according to which the swap flows are determined even indirectly recognized upon conclusion of the transaction; 8) for financial contracts for difference, the value of the index or shares on which the contract s profits or losses even indirectly depend; 9) for warrants, the number of warrants purchased, subscribed or sold multiplied by the purchase or selling price; 10) for covered warrants, the number of covered warrants purchased or sold multiplied by the purchase or selling price; 11) for certificates, the number of certificates purchased or sold multiplied by the purchase or selling price; 12) for securities giving rise to a cash settlement determined by reference to shares and related yields, indices or measurements, the amount according to which cash flows or maturity profile or economic result of the transaction are determined, calculated at the time of purchase and sale of securities; 13) for combinations of the above contracts or securities, the sum of the notional amounts of contracts and securities within the contract or security in question. 25. Id. 26. The Explanatory Memorandum provides the following example: swaps for which the settlement of differential amounts takes place with reference to a notional value of 100 and the same differential is then multiplied by 10; in this case, the actual notional value of reference is 1, See supra n DERIVATIVES & FINANCIAL INSTRUMENTS MARCH/APRIL 2013 IBFD

8 2013 Italian Financial Transaction Tax directly from the reference in article 9(3) to the terms defined in article 1 (shares, participating financial instruments and securities representing equity investments), it may also be argued, for consistency reasons, that, under the rule in article 9(3), the notional value relating to shares issued by low capitalized Italian companies (which would not qualify as chargeable equities) should be disregarded. Article 9(4) clarifies the foreign exchange rates that must be taken into account when computing the taxable basis of a transaction in chargeable derivatives in a currency other than euro (same rules as for transactions in chargeable equities; see section ). If the transaction has a euro settlement, reference is to the exchange rate actually applied. In other cases, reference is to the exchange rate shown in the specific section of the European Central Bank s website 28 relating to the date of conclusion of the transaction. Lastly, article 9(5) of the Treasury Decree states that as an alternative to the criteria considered in the previous paragraphs of the same article 9, for purposes of determining the amount of the tax, the notional value is assumed to be equal to two million euro Amount of the tax; transactions effected on regulated markets and multilateral trading facilities Italian FTT on equity derivative trades will be due, unless an exemption or exclusion applies, at a flat amount, which varies (from EUR to EUR 200) depending on the nature of the relevant chargeable derivative and on its notional value, on the basis of the schedule included in Table 3 attached to the Stability Bill. 29 Under article 11(1) of the Treasury Decree, this flat tax is reduced to one fifth of its ordinary amount for transactions that are executed on regulated markets or in multilateral trading facilities. 30 As for transactions in chargeable equities, article 11(1) states that: the reduced rate also applies in the case of a purchase of chargeable derivatives through a financial intermediary interposed between the parties to the transaction, buying the above instruments on a regulated market or a multilateral trading facility, provided that price, total quantity and date of settlement of buying and selling transactions are the same ; 31 operations attributable to negotiated transactions pursuant to article 19 of (EC) Commission Regulation 1287/2006 of 10 August 2006, where they are provided by the market shall also be treated as transactions effected on regulated markets or in multilateral trading facilities ; and on the contrary, transactions carried out bilaterally by intermediaries, including those effected in internalization systems and so-called crossing networks, 28. See For this schedule, see Appendix Supra n In this respect see section shall be treated as transactions executed outside regulated markets and multilateral trading facilities Physically settled derivatives If the chargeable derivatives provide also for a physical settlement, the transfer of title to the underlying chargeable equities upon settlement will be subject to Italian FTT on the basis of the rules discussed in section 3.2. As stated in article 6(5) of the Treasury Decree, the higher rate for offexchange transactions will apply (i.e. 0.22% in 2013 and 0.20% as from 2014) Persons liable to the tax on chargeable derivatives Italian FTT is due at the flat amount set out in article 11 and in the schedule in Table 3 attached to the Stability Law, by each of the counterparties. Again, this tax will be due irrespective of the place where the transactions are executed or the state of residence of the counterparties. As for transactions in chargeable equities, article 19 of the Treasury Decree identifies the persons that are responsible for the payment of the tax Entry into force Pursuant to article 21(3) of the Treasury Decree, the Italian FTT on chargeable derivatives applies to contracts subscribed, negotiated or modified as from 1 July 2013 and to the transfer of ownership of securitized derivatives occurring on or after 1 July The Explanatory Memorandum clarifies that the tax applies also to instruments already subscribed and to the transferable securities [securitized derivatives] already issued on 1 July 2013, in respect of negotiations or modifications taking place after this date. As already mentioned, the transfer of ownership of chargeable equities upon physical settlement of derivatives is taxable as from 1 March Transactions excluded from scope of application of Italian financial transaction tax Article 15 of the Treasury Decree lists the transactions that are outside the scope of the Italian FTT on equity trades and equity derivative trades. Under article 19(3), the intermediaries that are involved in the transactions (and as such are responsible for the payment of the FTT to the tax authorities) need not pay the tax if they receive a certification stating that the transactions falls within one of the exclusions laid down in article 15. In particular, the following transactions are outside of the scope of Italian FTT: transfers of the ownership of chargeable equities or the change in ownership of chargeable derivatives taking place due to inheritance or gift; In this respect see section Art. 15(1)(a). IBFD DERIVATIVES & FINANCIAL INSTRUMENTS MARCH/APRIL

9 Vittorio Salvadori di Wiesenhoff and Roberto Egori transactions in bonds and debt securities; 34 as clarified in the Explanatory Memorandum, the purpose of this specific exclusion is to avoid any possible doubts (in particular with reference to convertible debt securities and bonds with embedded derivatives); 35 transactions of issuance and cancellation of chargeable equities and of securitized derivatives, including the repurchase of securities by the issuer; 36 the purchase of the ownership of newly issued shares also through the conversion of bonds or the exercise of an option by the shareholder or upon physical settlement of chargeable derivatives; 37 transactions involving temporary transfers of chargeable equities 38 as listed in article 2.10 of Council Regulation 1287/2006 of 10 August 2006, 39 namely stock loans, repurchase or reverse purchase transactions, buy- and sell-back or sell- and buy-back transactions. Under article 15(1)(e) of the Treasury Decree, the same exclusion applies to the transfer of ownership of chargeable equities within the framework of collateral arrangements (e.g. irregular pledge); in addition, collateral consisting of chargeable equities or other temporary transfers that do not involve the transfer of ownership (e.g. irregular pledge) are also excluded from the tax; Art. 15(1)(b). 35. In the lack of any guidance on the definition of bonds and debt securities for the FTT purposes, one possible approach is to make reference to the provisions of the Italian Civil Code. In particular, articles 2410 to 2420-ter of the Civil Code govern the issue of bonds (obbligazioni), by Italian companies known as società per azioni, which also apply, based on article 2454 of the civil code. Furthermore, article 2483 of the Civil Code allows Italian società a responsabilità limitata to issue debt securities (titoli di debito). On this basis, the exclusion under article 15(1) (b) of the Treasury Decree should refer to securities that are issued under those provisions of the Italian Civil Code. This should indeed be the case of securities that are listed on the mercato telematico obbligazionario managed by Borsa Italiana. An alternative (but less convincing) approach could be to make reference to article 44(2)(c)(2) of the TUIR, which defines the securities similar to bonds as those securities which contain an unconditioned obligation to repay at maturity an amount not lower than the amount stated in the security, with or without the payment of periodical proceeds, and which do not attribute to the holder any right of direct or indirect involvement in the management either of the issuing company or of the affairs in relation to which the securities have been issued (authors translation). 36. Art. 15(1)(c). 37. Art. 15(1)(d). 38. Art. 15(1)(e). 39. Article 2.10 of Council Regulation 1287/2006 of 10 August 2006 reads as follows: securities financing transaction means an instance of stock lending or stock borrowing or the lending or borrowing of other financial instruments, a repurchase or reverse repurchase transaction, or a buy-sell back or sell-buy back transaction. 40. Indeed, article 15(1)(e) of the Treasury Decree excludes from the scope of application of the Italian FTT the following transactions: the transfer of the ownership of [chargeable equities] [ ] in connection with securities financing transactions as a result of a lending or borrowing or a repurchase or reverse repurchase transaction, or a buy-sell back or sell-buy back transaction. Likewise excluded from the scope of the tax is the transfer of ownership of the above instruments in the framework of financial collateral transactions arising from an arrangement under which a collateral-provider transfers full ownership of financial collateral to a collateral-taker for the purpose of securing or otherwise covering the performance of relevant financial obligations, including the repayment at the end of the collateral. In such case the tax applies if the transfer of ownership becomes final, or in the case of enforcement of the collateral (whether it takes place by sale or appropriation of securities), set-off of the collateral against the relevant financial obligations or application of the collateral in discharge of the relevant financial obligations or for other reasons involving in any case a permanent transfer of the ownership. the transfer of the ownership of shares negotiated on regulated markets or multilateral trading facilities, 41 issued by companies having an average market capitalization of less than EUR 500 million in November of the previous year. 42 Under article 17 of the Treasury Decree, these companies shall be identified and listed by the Ministry of Economy and Finance by 20 December each year. 43 Under article 15(1)(f ) of the Treasury Decree, moreover, the exclusion at hand applies also to transfers taking place outside regulated markets and multilateral trading facilities, and also upon physical settlement of chargeable derivatives; the transfer of ownership of chargeable equities and transactions in chargeable derivatives executed by group companies between which there exists a direct or indirect control relationship under article 2359(1) (1, 2) and article 2359(2) of the Italian Civil Code or which are (directly or indirectly) controlled by the same company (sister companies); 44 the transfer of ownership of chargeable equities or the change of ownership of chargeable derivatives, arising from restructuring operations under article 4 of Council Directive 2008/7/EC of 12 February 2008, as well as mergers and divisions of collective investment undertakings; 45 and the transfer of ownership of depositary receipts representing Italian shares or participating financial instruments issued by companies having an average market capitalization less than EUR 500 million in November of the previous year (as listed by the Ministry of Economy and Finance according to article 17 of the Treasury Decree). 46 The Explanatory Memorandum clarifies the following: Letter e) provides in detail for the exclusion of temporary transfers of ownership. In this reference it is pointed out that as regards securities financing transactions the wording of the provision follows article 2, point 10 of (EC) Commission Regulation 1287/2006 of 10 August Letter e) clarifies as well that temporary transfers of ownership which are excluded from the scope of the tax include also the transfers in the framework of financial collateral transactions arising from an arrangement under which a collateral-provider transfers full ownership of [chargeable equities] [ ], for the purpose of securing or otherwise covering the performance of relevant financial obligations, including the repayment at the end of the collateral. In this regard, in the absence of any explicit provision of law, the collaterals made up of shares or participating financial instruments (or other temporary transfers) which do not entail the transfer of full ownership shall also be deemed to be excluded from the scope of the tax. The following transactions shall be also excluded from the scope of the tax: acquisitions by persons purchasing with standby commitments to immediately resell within the same offer, where the transaction is executed within thirty days; acquisitions performed within a stabilisation of shares and participating financial instruments provided for by Commission Regulation (EU) 2273/2003 of 22 December Supra n Art. 15(1)(f ). 43. For the first year of application, the list of such companies, with shares listed in Italian regulated markets or multilateral trading facilities, is attached to the Treasury Decree. However, the Ministry of Economy and Finance shall still issue the list of Italian issuers having an average capitalization of less than EUR 500 million in November and shares listed outside of Italy. It is also worth noting that the list(s) published by the Ministry of Economy and Finance only include the names of the issuers with a low capitalization (but not the ISIN codes of the shares issued by them). 44. Art. 15(1)(g). 45. Art. 15(1)(h). 46. Art. 15(1)(i). 56 DERIVATIVES & FINANCIAL INSTRUMENTS MARCH/APRIL 2013 IBFD

10 2013 Italian Financial Transaction Tax Article 15(2)(a) and (b) of the Treasury Decree also rules that Italian FTT does not apply to (respectively): purchases of chargeable equities and transactions in chargeable derivatives entered into by a financial intermediary interposed between two parties, acting as a counterparty to both sides, purchasing on one hand, and selling on the other, securities or other financial instruments, where for both the buying and selling transactions the price, total number and date of settlement coincide, except cases where the person to whom the financial intermediary transfers the title or the financial instrument does not fulfil its obligations; and purchases of chargeable equities and transactions in chargeable derivatives entered into by systems interposing in the purchases or in the transactions for purposes of clearing and collateral of said purchases or transactions Exemptions Article 16 of the Treasury Decree sets out exemptions from the application of Italian FTT. As for the exclusions in article 15, the intermediaries which are involved in the transactions (and as such are responsible for remittance of the FTT to the tax authorities) need not pay the tax if they receive a certification stating that the transactions falls within one of the exemptions laid down in this article 16. Transactions falling under article 16(1) are entirely exempted. On the opposite, transactions governed by article 16(3) and (5) can be exempted only with respect to one of the parties, whilst the counterparty may be liable to the tax Transactions with institutional counterparties Article 16(1)(a) states that Italian FTT will not apply to transactions in which the counterparty consists of: the European Union or the European Institutions, and the European Atomic Energy Community; bodies covered by the Protocol on the Privileges and Immunities of the European Union or the European Central Bank and the European Investment Bank; the central banks of EU Member States and the central banks and organizations managing also the official reserves of other States; or bodies or international organizations established in accordance with international agreements enforced in Italy, as possibly listed in a specific regulation of the Italian tax authorities. As clarified in the Explanatory Memorandum, in the absence of such regulation by the tax authorities, reference may be made to the 47. Article 15(2)(b) of the Treasury Decree clarifies that reference is made to the authorized or recognized entities under Regulation (EU) 648/2012 of the European Parliament and of the Council of 4 July 2012 that interpose themselves in a transaction in financial instruments for purposes of clearing and collateral; for those countries where the above Regulation is not in force, reference is made to equivalent foreign systems which are authorized and supervised by a national public authority, provided that they are established in States and territories included in the list referred to in the Ministerial Decree issued in accordance with Article 168-bis of TUIR. Again, in the absence of the list under 168-bis of TUIR, reference must be made to the list included in the 1996 Decree. (non-exhaustive) list of entities contained in Circular Letter 11/E of 28 March 2012 of the Revenue Agency. Under article 16(2) of the Treasury Decree, when the counterparty to a transaction in chargeable equities or chargeable derivatives is one of the institutional entities listed above, Italian FTT is not payable by either party (i.e. the transaction is entirely exempt) Market making Article 16(3)(a) of the Treasury Decree sets out the Italian FTT exemption for market makers. The tax will not apply to transactions in chargeable equities and chargeable derivatives executed in the context of market making activities, as defined in article 2(1)(k) of Regulation 236/2012 of 14 March 2012 of the European Parliament and of the Council on short selling and certain aspects of credit default swaps (the Short-Selling Regulation) 48 and in document ESMA/2013/158 Guidelines on the exemption of market-making activities and primary market operations under Regulation (EU) 236/2012 of the European Parliament and of the Council on short selling and certain aspects of Credit Default Swap of 1 February 2013 (the Final ESMA Guidelines). 49 It is expected that the Ministry of Economy and Finance and the Italian tax authorities will: consider the ESMA Final Guidelines as applicable to the determination of the scope of the FTT market-making exemption from 1 March 2013, notwithstanding that those Guidelines may not be applicable for purposes of the Short-Selling Regulation for some time after that date; 50 narrowly interpret the Final ESMA Guidelines, so that the purchase of Italian listed equities cannot benefit from the market-making exemption where such listed equities are a hedge of an OTC derivative (under the argument that the latter is a financial instrument 48. Article 2(1)(k) of the Short-Selling Regulation reads as follows: market-making activities means the activities of an investment firm, a credit institution, a third-country entity, or a firm as referred to in point (l) of Article 2(1) of Directive 2004/39/EC, which is a member of a trading venue or of a market in a third country, the legal and supervisory framework of which has been declared equivalent by the Commission pursuant to Article 17(2) where it deals as principal in a financial instrument, whether traded on or outside a trading venue, in any of the following capacities: (i) by posting firm, simultaneous two-way quotes of comparable size and at competitive prices, with the result of providing liquidity on (ii) a regular and ongoing basis to the market; as part of its usual business, by fulfilling orders initiated by clients or in response to clients requests to trade; (iii) by hedging positions arising from the fulfilment of tasks under points (i) and (ii). 49. The European Securities and Markets Authority (ESMA) published in mid-september 2012 a consultation paper in relation to the exemption for market-making activities and primary market operations under the Short-Selling Regulation and launched a public consultation on the document. On 1 February 2013, ESMA published the Final ESMA Guidelines, which include a feedback statement on the most important issues raised during the consultation process and reflect some of the comments gathered in that context. 50. Indeed, the ESMA Final Guidelines will be translated into all the official EU languages and will be applicable two months after the translations are published. IBFD DERIVATIVES & FINANCIAL INSTRUMENTS MARCH/APRIL

11 Vittorio Salvadori di Wiesenhoff and Roberto Egori which is not admitted to trading or traded on market or multilateral trading facility). The FTT exemption applies provided that the person acting in the course of the market making activity has been granted the exemption under article 17(1) of the Short- Selling Regulation 51 by the authority specified in article 17(5) 52 and article 17(8) 53 of the same Regulation. Article 16(3)(a) of the Treasury Decree also states that: for those countries to which the above Regulation 236/2012 does not apply, in the absence therefore of the authorization referred to in the preceding sentence, the person acting in the course of market-making activities is entitled to the exemption, provided that such person has submitted a specific request to CONSOB according to the procedures to be issued by this public authority; the applicant shall in any case prove to comply with the same requirements and conditions provided for in the above Regulation and Guidelines. CONSOB adopted the procedure referred to above with Resolution No of 13 March The application for the FTT exemption shall be submitted to CONSOB using the form attached to the above-mentioned Resolution. It is worth noting that, as specifically clarified in Resolution No , persons performing market-making activities, as defined in the Short-Selling Regulation, on a market or a multilateral trading facility of the European Union, are not allowed to submit the application to CONSOB. These persons, according to article 16(3)(a), first part, of the Treasury Decree are entitled to the FTT exemption if and to the extent that they have been granted the market-making exemption by the competent authority as defined in article 17(5) and (8) of the Short-Selling Regulation. Under article 16(4) of the Treasury Decree, the FTT exemption for market making is exclusively granted to those persons carrying on market-making activities [ ] and only to the transactions effected in carrying on such activities. In the absence of any official guidance on this specification, one may argue that article 16(4) is somehow 51. Provisions of article 17(1) of the Short-Selling Regulation exempt entities undertaking transactions due to market-making activities from net short position transparency requirements and the restrictions on uncovered short sales. The exemption applies only to transactions carried out in performance of market-making activities, as defined in article 2(1)(k) of the same Regulation. Accordingly, the market-making exemption under the Short-Selling Regulation does not apply to the entire scope of activity of the notifying entity. In particular, as clearly stated in recital 26 of the Short-Selling Regulation, such an exemption does not cover proprietary trading of the notifying entity. 52. Article 17(5) of the Short-Selling Regulation reads as follows: the exemption referred to in paragraph 1 shall apply only where the natural or legal person concerned has notified the competent authority of its home Member State in writing that it intends to make use of the exemption. The notification shall be made not less than 30 calendar days before the natural or legal person first intends to use the exemption. 53. Under article 17(7) of the Short-Selling Regulation the competent authority referred to in paragraphs 5 [ ] may prohibit the use of the exemption if it considers that the natural or legal person does not satisfy the conditions of the exemption. Any prohibition shall be imposed within the 30 calendar day period referred to in paragraph 5 [ ] or subsequently if the competent authority becomes aware that there have been changes in the circumstances of the natural or legal person so that it no longer satisfies the conditions of the exemption. 54. See res18494.htm. equivalent to paragraph 13. of the ESMA Final Guidelines, where it is stated that: the exemption applies only to the transactions carried out in performance of market making activities as defined above [ ]; it does not apply to the entire scope of activity of the notifying entity. As recital 26 [of the Short-Selling Regulation] clearly states, such an exemption does not cover the proprietary trading of those persons. Accordingly, it can be maintained that the purpose of article 16(4) is to make it clear that the FTT exemption for market makers (i) applies only to transactions that are genuinely executed in the capacity of market making and (ii) does not apply to the entire scope of activity of the market maker (and, in particular, does not cover proprietary trading of that person). Article 16(5) of the Treasury Decree also states that the tax may be applied to the counterparty, within the limits and under the conditions set forth in paragraph 494, first sentence of the Stability Law. This means that: in the case of equity trades, the exemption applies when the market maker acts as the purchaser of the instruments, while a person purchasing chargeable equities from a market maker would not per se be exempted; and in the case of derivative trades, the exemption does not per se extend to the derivative counterparty of the market maker Transactions under liquidity contracts Article 16(3)(b) of the Treasury Decree exempts from Italian FTT those transactions effected in the course of liquidity assistance activities within the framework of accepted market practices, approved by the financial market authority under Directive 2003/6/EC of 28 January 2003 of the European Parliament and of Council and Commission Directive 2004/72/EC of 29 April The exemption is limited exclusively to the operation and transactions carried out within the activities described above and under the condition that the person executing transactions in chargeable equities and chargeable derivatives have concluded a contract directly with the company issuing the security. Also in this case, the exemption from the application of Italian FTT does not extend to the counterparty of the liquidity provider Pension funds and compulsory pension institutions Under article 16(5) of the Treasury Decree, Italian FTT will not apply to: (1) pension funds subject to supervision under Directive 2003/41/EU, established in (i) EU Member States or (ii) EEA Member States that allow an adequate exchange of information with Italy; 55 (2) compulsory social security institutions, established in (i) EU Member States or (ii) EEA Member States and allow an adequate exchange of information with Italy; At present, Norway and Iceland. 56. Id. 58 DERIVATIVES & FINANCIAL INSTRUMENTS MARCH/APRIL 2013 IBFD

12 2013 Italian Financial Transaction Tax (3) persons and entities participated solely by the pension funds in (1) above (so-called pension fund pooling vehicles ); and (4) other supplementary pension schemes referred to in Italian Legislative Decree 252 of 5 December The FTT exemption under article 16(5) applies only when the entities listed in (1) through (4) above are purchasers of chargeable equities and, in the case of derivative transactions, does not extend per se to the derivative counterparty Transactions relating to ethical or socially responsible products and services Article 16(1) exempts from Italian FTT: (b) transfers of ownership and transactions in units of collective investment undertakings referred to in Article 1, paragraph 1, letter m) of TUF, classed as ethical or socially responsible pursuant to Article 117-ter of TUF for which a prospectus has been drafted according to the models in Annex 1B of the regulation adopted by CONSOB with Resolution of 14 May 1999 and later amendments, including the additional information provided for by Article 89, paragraph 1 of the Regulation adopted by CONSOB with Resolution of 29 October 2007 and later amendments; (c) the subscription of contracts for the provision of portfolio management services referred to in Article 1, paragraph 5, letter d) of TUF, classed as ethical or socially responsible pursuant to Article 117-ter of TUF, where the contract concluded with the customer includes the additional information provided for by article 89, paragraph 1 of the regulation adopted by CONSOB with Resolution of 29 October 2007 and later amendments. The wording of the exemptions in letters b) and c) of article 16 does not seem to be consistent with the Italian FTT rules. Indeed: transfers of ownership and transactions in units of collective investment undertakings, whether or not they are ethical or socially responsible, are in any event not subject to the tax. As specifically stated in article 2(2) of the Treasury Decree, in fact these transactions do not fall within the scope of application of the FTT on equity trades. Furthermore, units of collective investment undertakings do not qualify as chargeable derivatives; similarly, no tax is due on the subscription of contracts for the provision of portfolio management services. On the basis of the above, the purposes of the above exemptions is totally unclear, since there is no point in exempting transactions which are per se not subject to the tax. A possible alternative interpretation of these rules is that the exemptions would apply when ethical/socially responsible collective investment undertakings or portfolio managers are counterparties to a transaction in chargeable equities or chargeable derivatives. This interpretation could be supported by the wording of article 1(494) of the Stability Law, which states that the FTT shall not apply to transactions and operations relating to products and services which are qualified as ethical or socially responsible pursuant to article 117-ter of the Legislative Decree of 24 February 1998 No. 58 and to the enactment regulations relating thereto High-frequency trading transactions Definition of high-frequency trading transactions A special FTT regime applies to high-frequency trading (HFT) transactions executed on the Italian financial markets 57 over equities and equity derivatives. The notion of chargeable instruments for purposes of HFT tax is broader than chargeable equities and chargeable derivatives. Indeed, article 12(1) states that: the transactions effected on the Italian financial market are subject to a tax on high frequency trading relating to shares, participating financial instruments, securities representing equity investment and transferable securities as of Article 7 [securitized derivatives], irrespective of theissuer, and to derivative financial instruments referred to in Article 7 [un-securitized derivatives], having as underlying one or more of the financial instruments referred to in paragraph 491 [of the Law 228] [equity instruments] or the value of which depends primarily on one or more of these financial instruments, irrespective of the issuer of these financial instruments referred to in paragraph 491 and regardless of the issuer s residence. 58 Based on the above, HFT transactions executed on the Italian financial market over equities issued by non-italian issuers or derivatives over foreign equities seem to be in scope for purposes of the special FTT on HFT transactions (HFT tax) governed by article 12 of the Treasury Decree. HFT transactions are defined as transactions which: are generated by an automated algorithm which automatically determines the decisions concerning the sending, modification and cancellation of orders and of the relevant parameters (with the exclusion of certain algorithms, as further specified below); and occur at intervals not exceeding half a second. This interval is calculated as the time between the placing of an order for purchase or sale and the subsequent modification or cancellation of the same order by the same algorithm. Article 12(1) specifically excludes from the scope of the HFT tax those transactions generated by: algorithms used for the performance of the marketmaking activity referred to in article 1, paragraph 494, last sentence, letter (a) of the Stability Law (which sets out the FTT market-making exemption), provided that orders placed by such algorithms come from specific desks devoted to market-making activities as set out in article 16(3) of the Treasury Decree; and algorithms used solely for the fulfilment of clients orders to comply with best execution requirements under article 21 of the Markets in Financial Instruments Directive and algorithms used solely for the purpose of complying with equivalent best execution requirements for the client provided by foreign regulations. The Explanatory Memorandum clarifies that the definition of high-frequency trading excludes smart order routing algorithms, as well as algorithms fulfilling orders in a way designed to obtain transac- 57. Under article 12(2) of the Treasury Decree, the Italian financial market means the regulated markets and multilateral trading facilities authorized by CONSOB pursuant to articles 63 and 77-bis of TUF. 58. Supra n. 19. IBFD DERIVATIVES & FINANCIAL INSTRUMENTS MARCH/APRIL

13 Vittorio Salvadori di Wiesenhoff and Roberto Egori tions at execution prices that are equal or better than the weighed average market price collected at an interval, predetermined by the parties, not exceeding that on the day on which the order was placed Application of high-frequency trading transaction tax Article 13 of the Treasury Decree sets out the rules for the application of the HFT tax. Under article 13(1), the tax is calculated on a daily basis and is payable where, in a single trading day, the ratio between the sum of cancelled and modified orders and the sum of entered and modified orders exceeds 60% with reference to a single financial instrument. For this purpose, only the orders cancelled or modified within half a second will be taken into consideration. The HFT tax will be paid, for each trading day, at the rate of 0.02% on the value of the cancelled and modified orders exceeding the 60% threshold. Even though article 13(1) makes reference to the number or orders, article 13(2) clarifies that for HFT transactions in equities and in securitized equity derivatives, the ratio specified in article 13(1) is calculated based on the number of securities included in the single orders that have been entered, modified or cancelled. The same paragraph 2 further states that the HFT tax will be applied to the number of securities exceeding the threshold specified in paragraph 1 [60%] multiplied by the weighted average price of the purchase and sale orders or related modifications thereof for the specific financial instrument in the trading day. Under article 13(3), in the case of un-securitized derivatives, the ratio shall be calculated based on the number of standard contracts included in the single orders entered, modified or cancelled. In addition, it is stated that the HFT tax will be applied to the product of the number of standard contracts exceeding the 60% threshold multiplied by the weighted average equivalent value of purchase and sale orders or related modifications thereof for the specific financial instrument in the trading day. Equivalent value means, in the case of options, the premium specified in the contract multiplied by the number of shares making up the standard contract; in the other cases, the notional value of the standard contract. The above calculations must be done per algorithm and per financial instrument (ISIN) Persons liable to high-frequency trading transaction tax Under article 14 of the Treasury Decree, HFT tax is payable by persons which, by means of the relevant algorithms, enter purchase and sale orders and the related modifications and cancellations referred to in article 13. The Explanatory Memorandum clarifies that the taxable person is the person who, in the case where the orders entered were to be concluded, would purchase or sell the shares and other financial instruments or would become the counterparty of a financial derivative. However, the HFT tax will be collected by the intermediaries (referred to in article 19 of the Treasury Decree) that intervene in the execution of the relevant transactions. Indeed, article 19, when identifying the responsibility of intermediaries in collecting and paying the tax, makes also reference to the HFT tax. This is confirmed by the Explanatory Memorandum where it is clarified that: the obligation to pay, as well as other obligations referred to in Article 19 of the Decree, remain in charge of the persons identified by such Article. The latter shall calculate the tax separately for each of the taxable persons. If the taxable person carries out high-frequency trading involving several intermediaries, the tax on such transactions shall be paid separately by each intermediary Entry into force Based on article 21(2) and (4) of the Treasury Decree: for HFT relating to equity instruments, the tax applies to orders sent as of 1 March 2013; for HFT relating to derivative instruments, the tax will apply to orders sent as from 1 July Collection and payment of Italian financial transaction tax Intermediaries responsible for collecting and remitting the tax Article 19(1) of the Treasury Decree states that the Italian FTT due on trades involving chargeable equities and chargeable derivatives, as well as the HFT tax must be paid by certain intermediaries that are involved in the execution of the relevant transactions, 59 as well as the notaries involved in the drawing up or authentication of deeds concerning the above-mentioned transactions. In all other cases, the tax is to be paid by the taxpayer. The intermediaries referred to in article 19(1) quoted are banks, trust companies (società fiduciarie) and investment companies referred to in article 18 of the TUF. 60 Neither the Treasury Decree nor the Explanatory Memorandum clarify what involvement in the execution of the relevant transactions means for FTT purposes. For these purposes, in the authors view, one could make reference to article 1(5) of the TUF, which defines investment services and activities, where they concern, amongst others, the following: dealing for own account; The Explanatory Memorandum clarifies the following: in the case of transactions executed in the framework of collective asset or portfolio management services, where the operator does not rely on an intermediary (a broker, for example,) for executing the negotiation orders, the person liable for payment of the tax is the operator itself. Furthermore, always with respect to the transactions executed in the framework of collective asset or portfolio management services considering that for collective asset management services, the owner of the securities (or the counterparty, in the case of derivative financial instruments) is the collective investment undertaking ( OICR in Italy), whereas in the case of portfolio management services it is the management contract holder it should be clarified that for the purpose of payment of the tax, the net balance of daily transactions, in these cases, shall be calculated with reference to each OICR or management contract holder, respectively. 60. Consolidated Finance Act. 61. According to article 1(5-bis) of TUF dealing for own account shall mean the activity consisting in purchases and sales of financial instruments, on 60 DERIVATIVES & FINANCIAL INSTRUMENTS MARCH/APRIL 2013 IBFD

14 2013 Italian Financial Transaction Tax execution of orders for clients; reception and transmission of orders. 62 One could therefore take the view that the intermediaries listed in article 19(1) of the Treasury Decree are deemed to be involved in the execution of the relevant transactions when they are dealing for own account (dealers) or executing orders for clients (brokers) or receiving and transmitting orders (order routers) Deadlines for the payment of the tax The deadlines for the payment of the tax are as follows: for transactions in chargeable equities: by the 16th day of the month following the one in which transfer of ownership occurs under article 3; for transactions in chargeable derivatives: by the 16th day of the month following that of conclusion of the contract, as established under article 8; for HFT transactions: by the 16th day of the month following the one in which the dispatch date of the cancelled or modified order falls. However, special deadlines apply for the first three months of application of the Italian FTT in respect of transactions in chargeable equities and in respect of HFT transactions in equity instruments. Indeed, under article 21(6) of the Treasury Decree the FTT due in respect of taxable transactions executed in March, April and May is payable within 16 July Chain of intermediaries intermediaries located in certain black-listed jurisdictions When more intermediaries are involved in the execution of the transaction, article 19(4) states that the tax must paid by the intermediary that receives the execution order directly from the purchaser or the ultimate counterparty. Moreover, article 19(4), as amended by the 18 March Decree, provides as follows: (i) where the purchaser or the final counterparty is one of the persons referred to in paragraph 1 [qualifying intermediaries and notaries], not located in the States or territories referred to in the next sentence, this person pays directly the tax due; (ii) persons located in States or territories with which Italy has no agreements in force for purposes of the exchange of information or the assistance in the collection of tax credits, identified in a specific regulation issued by the Director of the Revenue Agency, that are involved for any reason in the execution of the transaction, are considered in all respects as purchasers or final counterparties of the order of execution. On 1 March 2013, the Director of the Revenue Agency issued the required regulation under article 19(4) of the Treasury Decree (the article 19(4) regulation). This regulation, however, is based on the original wording of article a principal basis (contropartita diretta) and in relation to customer orders, together with market making activities. 62. According to article 1(5-sexies) TUF, the service in letter e) above (reception and transmission of orders) includes the receipt and transmission of orders as well as the activity consisting in placing two or more investors in contact, thereby making it possible to conclude transactions by them (mediation). 19(4) (i.e. before the changes enacted with the 18 March Decree), which reads as follows: persons located in States or territories with which Italy has no agreements in force for purposes of the exchange of information and the assistance in the collection of tax credits, identified in a specific regulation issued by the Director of the Revenue Agency, that are involved for any reason in the execution of the transaction, are considered in all respects as purchasers or final counterparties of the order of execution. On the basis of the above wording, the article 19(4) regulation lists the countries which have agreements in force with Italy for the purposes of the exchange of information and the assistance in the collection of tax credits (the white-listed countries). The rule in article 19(4) would apply to intermediaries established in countries which are not listed in the article 19(4) regulation (the non-whitelisted countries). The article 19(4) regulation only includes EU Member States and two out of three EEA countries (Norway and Iceland). 63 All other countries (including the United States, Japan, India, Australia, Canada, Switzerland, etc.) are therefore considered non-white-listed countries. 64 Following the changes enacted with the 18 March Decree, it is reasonable to assume that the Director of the Revenue Agency will amend and update the article 19(4) regulation, including other white-listed countries (such as possibly the United States). Indeed, the new definition of white-listed countries now makes reference to the existence of agreements in force with Italy concerning either the exchange of information or the assistance in the collection of tax credit. 63. More in detail, the white-listed countries mentioned in the article 19(4) regulation are the following: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, United Kingdom, Romania, Slovakia, Slovenia, Spain and Sweden. 64. Based on the motivation section of the article 19(4) regulation, the white-listed countries have been identified on the basis of the following provisions: Council Directive 2011/16/EU of 15 February 2011 (on administrative cooperation in the field of taxation and repealing Directive 77/799/EE); Council Directive 2010/24/EU of 16 March 2010 concerning mutual assistance for the recovery of claims relating to taxes, duties and other measures, enacted in Italy with Legislative Decree 14 August 2012 No. 149, published in Official Gazette No. 202 of 30 August 2012; OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters (the Convention) between the Member States of the Council of Europe and the OECD member countries, signed in Strasbourg on 25 January 1988, ratified in Italy with Law 10 February 2005 No. 19, published in Official Gazette No. 48 of 28 February 2005, modified with the Protocol signed on 27 May 2010, ratified in Italy with Law 27 October 2011 No. 193, published in Official Gazette No. 273 of 23 November Apparently, the Director of the Revenue Agency has taken the view that all non-eu/non-eea States do not satisfy the requirements for being qualified as white-listed countries (exchanging of information with Italy and assisting Italy in the collection of tax credits) on the basis of the argument that such countries have not signed and ratified the Convention and the Protocol amending it (see in this respect the status of the signatures and ratifications of the OECD Convention org/ctp/exchange-of-tax-information/status_of_convention.pdf ) or have made declarations and/or reservations in relation to the OECD Convention that significantly limit its scope of application (see the list of declarations and reservations made by the States that have signed the OECD Convention: ListeDeclarations.asp?NT=127&CV=1&NA=&PO=999&CN=999&VL =1&CM=9&CL=ENG). IBFD DERIVATIVES & FINANCIAL INSTRUMENTS MARCH/APRIL

15 Vittorio Salvadori di Wiesenhoff and Roberto Egori The main effect of the rule set out by article 19(4) is that an intermediary that is established in a white-listed country (a white-listed intermediary, such as a UK broker) and transacts with an intermediary established in a blacklisted country (a black-listed intermediary, such as a Swiss broker or, based on the present wording of the article 19(4) regulation, a US broker) would have to charge the tax in the same way as it would were it transacting with nonintermediaries. However, the concern is that the rule might lead to multiple layers of tax if not correctly interpreted. Indeed, it is unclear what article 19(4) is specifically meaning when stating that black-listed intermediaries are considered in all respects as purchasers or final counterparties. Furthermore, limiting the analysis to trades in chargeable equities, the wording of article 19(1) and (4) apparently does not specifically make it clear that, where a chain of intermediaries is involved in the execution of a given transaction and the selling intermediary is e.g. a UK broker but the buying intermediary is e.g. a Swiss broker, the only tax due is the one collected by the UK broker, so that the Swiss broker is not required to pay and collect tax on its own buys and subsequent deliveries and the ultimate client is also not required to pay the tax on its buys. In the authors view, article 19(4) is not aimed at imposing multiple layers of tax on a client flow through various intermediaries, wherever they are located. Rather, the purpose of the rule is simply to identify the person which is required to charge the tax when a chain of intermediaries is involved in the execution of a given transaction, so that the tax authorities can (more) easily collect the FTT when a black-listed intermediary is involved. On the basis of the above, a black-listed intermediary may not be required to collect the tax when a white-listed intermediary is also involved in the execution of the transaction. Nonetheless, all the other provisions in the Treasury Decree which make reference to intermediaries (such as article 3(4), which disregards the purchases made by executing brokers and article 15(2)(a) which excludes from the tax the purchases made by intermediaries acting as riskless principals) should still apply to black-listed intermediaries. In other words, the qualification of blacklisted intermediaries as purchasers in all respects under article 19(4) should only apply for the specific purpose of identifying the intermediary that is responsible for paying the tax (denying that qualification to black-listed intermediaries when also white-listed ones are involved in the chain). Therefore, black-listed intermediaries should keep their status of intermediaries for the purpose of other provisions in the Treasury Decree (such as article 3(4) and article 15(2)(a)), including the case where no white-listed intermediary is involved in the transaction (i.e. in such scenario the black-listed intermediary that is closest to the client should in the authors view be required to collect and remit the tax) Reporting Compliance with the reporting and payment obligations through the centralized management company Article 19(5), first part, of the Treasury Decree provides as follows: the persons that are responsible for the payment of the tax [generally, the intermediaries referred to in Article 19(1) and 19(4) which are involved in the execution of the transactions] shall comply with annual reporting obligations, which may comprise excluded and exempted transactions, according to the terms and the modalities that will be set out in a regulation of the Director of the Revenue Agency [ ]. The same regulation shall provide for arrangements for the payment of the tax and the connected instrumental formalities. The Director of the Revenue Agency has not yet issued the required regulation on reporting and thus, at this stage, it is not possible to state whether or not all or just some of the excluded and exempted trades will actually be reportable. The delay in issuing the regulation on FTT reporting is of course generating great concerns amongst intermediaries, which may be required at a later stage to report data and information which at present they are not collating. Article 19(5), second part, of the Treasury Decree states that: [the intermediaries required to account for the FTT] may apply to the Centralized Management Company referred to in article 80 of TUF 65 for the payment of the tax and the reporting obligation. For such purpose, they shall give a specific power of attorney to the Centralized Management Company and send the information used for the tax calculation as is necessary for the payment of the tax and the compliance with the relevant tax return obligations. The delegating persons are held in any case responsible for the correct payment of the tax and for the compliance with the connected instrumental formalities. The Centralized Management Company receives from the intermediaries the necessary funds and makes the payment within the 16th of the second month following the date of the transaction; the payment relating to the transactions of the month of November is made by the 19th of December and the delegating persons are required to send the information referred to in the fourth sentence and to provide the funding by the third working day before the above date Foreign intermediaries Based on article 19(7) of the Treasury Decree, foreign intermediaries with an Italian permanent establishment must comply with the obligations concerning the payment of Italian FTT and reporting through that permanent establishment, which is liable under the same terms and responsibilities of non-resident intermediaries. Foreign intermediaries which do not have a permanent establishment in Italy, can appoint a tax representative among the persons indicated in article 23 of Presidential Decree No. 600 of 29 September Such representatives share the same terms and responsibilities as the appointing foreign intermediaries for the obligations deriving from the application of the tax. 65. Montetitoli, in the case of the Mercato Telematico Azionario. 66. Article 23 of Presidential Decree No. 600 of 29 September 1973 lists the persons that may qualify as withholding tax agents for income tax purposes (e.g. corporations, partnerships, individuals carrying our entrepreneurial or professional activities, etc.). 62 DERIVATIVES & FINANCIAL INSTRUMENTS MARCH/APRIL 2013 IBFD

16 2013 Italian Financial Transaction Tax Foreign intermediaries which do not have a permanent establishment in Italy and have not appointed an Italian representative shall directly comply with the FTT payment and reporting obligations. For these purposes, those intermediaries shall be identified on the basis of a specific procedure laid down in a forthcoming regulation of the Director of the Revenue Agency Entry into force Italian FTT is due: as from 1 March 2013, in respect of transactions in chargeable equities and HFT transactions entailing the transfer of the ownership of shares and other equity instruments. In particular, under article 21 of the Treasury Decree: for HFT transactions, the tax applies to orders sent as from 1 March 2013; and for transactions in chargeable equities (not HFT transactions), the Italian FTT applies on transaction settled from 1 March 2013 if traded after the 28 February 2013; and as from 1 July 2013, for transactions in chargeable derivatives and HFT transactions on equity derivative instruments. In particular, under article 21 of the Treasury Decree: for HFT transactions, the tax will apply to orders sent as from 1 July 2013; and for transactions in chargeable derivatives (not HFT transactions), Italian FTT will apply to contracts subscribed, negotiated or modified, or to securities transferred, as from 1 July Italian FTT due in respect of transactions in chargeable equities and in respect of HFT transactions in equity instruments executed until the end of the third calendar month following the date on which the Treasury Decree is published, will not be payable before 16 July Penalties and collection of Italian financial transaction tax Under article 20(1) of the Treasury Decree, any delayed, insufficient or omitted payment of the tax will be subject to the 30% penalty provided for in article 13 of Legislative Decree 471 of 18 December 1997 (Decree 471). However, this penalty may be applied exclusively against the persons responsible for such obligation as well as for the payment of the tax. In the case of an insufficient or omitted payment, however, the tax authorities may recover the tax also from the taxpayer concerned. Article 20(2), consistently with the provisions of the Stability Law, states that breaches concerning the tax return, its content and the related formalities as of article 19, paragraph 5 are subject to the penalties set forth in Decree 471 for value added tax purposes Income taxes and regional tax on productive activities Under article 18 of the Treasury Decree, the Italian FTT on chargeable equities, chargeable derivatives and HFT is not deductible for income tax purposes, including substitute taxes, nor for purposes of the Italian regional tax on productive activities. The Explanatory Memorandum clarifies that the FTT will not be taken into account when computing the purchase cost for purposes of capital gains taxes Refunds Article 22 of the Draft Decree includes a general refund clause which allows the claiming of a refund of tax unduly paid, also where unequivocal evidence is presented that the same transaction has been subjected to multiple taxation. The modalities for filing this refund claim will be set out in a forthcoming regulation to be issued by the Director of the Revenue Agency. Appendix 1 Italian FTT on Derivatives (Euro, per Each Counterparty) Notional value of the transaction (in euro/000) > 1000 Futures, certificates, covered warrants, options on share-related yields, parameters and indexes Futures, warrants, certificates, covered warrants, options on shares Swap agreements on shares and share-related yields, parameters and indexes Forward agreements on shares and share-related yields, parameters and indexes Differential financial agreements on shares and share-related yields, parameters and indexes Any other transaction involving a cash payment determined with reference to shares, share-related yields, parameters and indexes Combinations of agreements and securities above mentioned IBFD DERIVATIVES & FINANCIAL INSTRUMENTS MARCH/APRIL

The Minister of Economy and Finance

The Minister of Economy and Finance The Minister of Economy and Finance Having regard to Law No 228 of 24 December 2012 laying down provisions for drawing up of the annual and multi-annual State budget ("Legge di stabilità 2013 2013 Stability

More information

The Minister of Economy and Finance

The Minister of Economy and Finance The Minister of Economy and Finance Having regard to Law No 228 of 24 December 2012 laying down provisions for drawing up of the annual and multi-annual State budget ("Legge di stabilità 2013 2013 Stability

More information

UNOFFICIAL TRANSLATION. Explanatory Memorandum

UNOFFICIAL TRANSLATION. Explanatory Memorandum UNOFFICIAL TRANSLATION Explanatory Memorandum Article 1, paragraphs 491 to 500, of Law No 228 of 24 December 2012, hereinafter referred to the Law, has introduced a tax on financial transactions applying

More information

Financial Transaction Tax (Shares and other financial instruments subject to the tax)

Financial Transaction Tax (Shares and other financial instruments subject to the tax) Financial Transaction Tax (Shares and other financial instruments subject to the tax) Unless otherwise specified, legal references are made to the Decree of the Minister of Economy and Finance of 21 February

More information

FINANCIAL TRANSACTION TAX

FINANCIAL TRANSACTION TAX FINANCIAL TRANSACTION TAX (DERIVATIVE INSTRUMENTS AND OTHER SECURITIES) Unless otherwise specified, legal references are made to the Decree of the Minister of Economy and Finance of 21 February 2013. Article

More information

EU financial transaction tax

EU financial transaction tax Briefing EU financial transaction tax Summary On 14 February 2013, the European Commission tabled its proposal for a Council Directive implementing enhanced cooperation in the area of financial transaction

More information

The Destinazione Italia Decree: significant amendments to Italian securitisation transactions

The Destinazione Italia Decree: significant amendments to Italian securitisation transactions The Destinazione Italia Decree: significant amendments to Italian securitisation transactions Emiliano Conio, Corrado Angelelli, Vittorio Salvadori and Francesco Lombardo, Freshfields Bruckhaus Deringer

More information

PART I GENERAL. Chapter 1. General provisions. Section 1. General scope of application of the Act

PART I GENERAL. Chapter 1. General provisions. Section 1. General scope of application of the Act 1(49) Unofficial translation Amendments up to 258/2013 included 746/2012 Issued in Helsinki on 14 December 2012 Securities Markets Act Pursuant to the decision of Parliament, the following is enacted:

More information

The Warsaw Stock Exchange Rules

The Warsaw Stock Exchange Rules The Warsaw Stock Exchange Rules (text according to legal condition at 1 June 2015)* *The Warsaw Stock Exchange Rules adopted in Resolution No. 1/1110/2006 of the Exchange Supervisory Board dated 4 January

More information

WSE DETAILED EXCHANGE TRADING RULES IN UTP SYSTEM

WSE DETAILED EXCHANGE TRADING RULES IN UTP SYSTEM WSE DETAILED EXCHANGE TRADING RULES IN UTP SYSTEM (consolidated text dated 14 September 2015 )* * WSE Detailed Exchange Trading Rules in UTP system adopted by Resolution No. 1038/2012 of the WSE Management

More information

Communication for undertakings that distribute nonmainstream financial products (such as CFD s, binary options, etc.) online

Communication for undertakings that distribute nonmainstream financial products (such as CFD s, binary options, etc.) online Communication FSMA_2014_05 of 25/07/2014 Communication for undertakings that distribute nonmainstream financial products (such as CFD s, binary options, etc.) online Scope: This Communication is addressed

More information

Act on Investment Firms 26.7.1996/579

Act on Investment Firms 26.7.1996/579 Please note: This is an unofficial translation. Amendments up to 135/2007 included, May 2007. Act on Investment Firms 26.7.1996/579 CHAPTER 1 General provisions Section 1 Scope of application This Act

More information

The Warsaw Stock Exchange Rules

The Warsaw Stock Exchange Rules (text consolidated at 20 June 2012)* * 1) The Rules adopted by the Supervisory Board by Resolution No. 1/1110/2006 dated 4 January 2006, as amended by the Exchange Supervisory Board: - by Resolution No.

More information

THE INVESTMENT FUNDS AND MANAGEMENT COMPANIES ACT - 1. Ljubljana, 2003

THE INVESTMENT FUNDS AND MANAGEMENT COMPANIES ACT - 1. Ljubljana, 2003 THE INVESTMENT FUNDS AND MANAGEMENT COMPANIES ACT - 1 (published in the Official Gazette of the Republic of Slovenia - no. 110 on December 2002) Ljubljana, 2003 The original text of this act is written

More information

Ministry of Economy and Finance Treasury Department Directorate II

Ministry of Economy and Finance Treasury Department Directorate II Ministry of Economy and Finance Treasury Department Directorate II Decree no. 993039 of November the 11 th,2011 Selection and Evaluation of Specialists in Government Bonds (Specialists Decree) CONSIDERED

More information

Frequently Asked Questions on the Italian Financial Transaction Tax. Publication Date: 12 July 2013

Frequently Asked Questions on the Italian Financial Transaction Tax. Publication Date: 12 July 2013 Page 1 Frequently Asked Questions on the Italian Financial Transaction Tax Publication Date: 12 July 2013 General: Hong Kong Exchanges and Clearing Limited ( HKEx ) notes that since the Italian financial

More information

EVLI SWEDEN EQUITY INDEX FUND

EVLI SWEDEN EQUITY INDEX FUND EVLI SWEDEN EQUITY INDEX FUND FUND-SPECIFIC RULES The fund rules consist of fund-specific rules and common rules based on the UCITS IV Directive. 1 The Fund The name of the mutual fund will be Sijoitusrahasto

More information

Risk Warning Notice. Introduction

Risk Warning Notice. Introduction First Equity Limited Salisbury House London Wall London EC2M 5QQ Tel 020 7374 2212 Fax 020 7374 2336 www.firstequity.ltd.uk Risk Warning Notice Introduction You should not invest in any investment product

More information

Client Order Execution Policy

Client Order Execution Policy Client Order Execution Policy Client Order Execution Policy Application The EU Markets in Financial Instruments Directive ( MiFID ) and corresponding rules of the Financial Conduct Authority ( FCA ) requires

More information

Issues and corporate actions in the book-entry system Decision of Euroclear Finland s CEO. To: Issuers Account operators Issuer agents

Issues and corporate actions in the book-entry system Decision of Euroclear Finland s CEO. To: Issuers Account operators Issuer agents Issues and corporate actions in the book-entry system Decision of Euroclear Finland s CEO To: Issuers Account operators Issuer agents Reference to the Rules: 2.1.13, 3.1.11, 3.1.12,3.1.13, 3.1.14, 3.1.19

More information

CYPRUS TAX CONSIDERATIONS

CYPRUS TAX CONSIDERATIONS TAXATION The following summary of material Cyprus, US federal income and United Kingdom tax consequences of ownership of the GDRs is based upon laws, regulations, decrees, rulings, income tax conventions

More information

AIFMD means Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers, as amended.

AIFMD means Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers, as amended. Glossary Accounting Period means the annual accounting period for the Company ending on 31 December in each calendar year. The first annual accounting period will end on 31 December 2015. Acts means the

More information

General Regulations. of the Stock Exchange

General Regulations. of the Stock Exchange General Regulations of the Stock Exchange Approved by decree of the Minister of the Economy and Finance N 1268-08 of the 03 rajab 1429 (07 July 2008) General Rules of the Stock Exchange Contents Title

More information

Information regarding share split and redemption of shares in AB Volvo 2007

Information regarding share split and redemption of shares in AB Volvo 2007 Information regarding share split and redemption of shares in AB Volvo 2007 The share split and redemption procedure in summary Table of contents 2 The share split and redemption procedure in summary 3

More information

LAW ON FOREIGN CURRENCY TRANSACTIONS. ( Official Herald of the Republic of Serbia, Nos. 62/2006 and 31/2011) I GENERAL PROVISIONS

LAW ON FOREIGN CURRENCY TRANSACTIONS. ( Official Herald of the Republic of Serbia, Nos. 62/2006 and 31/2011) I GENERAL PROVISIONS LAW ON FOREIGN CURRENCY TRANSACTIONS ( Official Herald of the Republic of Serbia, Nos. 62/2006 and 31/2011) The present Law shall govern: I GENERAL PROVISIONS Article 1 1) payments, collections and transfers

More information

The Options Clearing Corporation

The Options Clearing Corporation PROSPECTUS M The Options Clearing Corporation PUT AND CALL OPTIONS This prospectus pertains to put and call security options ( Options ) issued by The Options Clearing Corporation ( OCC ). Certain types

More information

ALTERNATIVE TRADING SYSTEM RULES

ALTERNATIVE TRADING SYSTEM RULES ALTERNATIVE TRADING SYSTEM RULES (text according to legal condition at 20 June 2012) 1 NOTE: Only the Polish version of this document is legally binding. This translation is provided for information only.

More information

Complex Products. Non-Complex Products. General risks of trading

Complex Products. Non-Complex Products. General risks of trading We offer a wide range of investments, each with their own risks and rewards. The following information provides you with a general description of the nature and risks of the investments that you can trade

More information

Certain capitalized terms in this Premium Dividend and Dividend Reinvestment Plan have the meaning assigned to them under "Definitions" below.

Certain capitalized terms in this Premium Dividend and Dividend Reinvestment Plan have the meaning assigned to them under Definitions below. Premium Dividend and Dividend Reinvestment Plan Certain capitalized terms in this Premium Dividend and Dividend Reinvestment Plan have the meaning assigned to them under "Definitions" below. Important

More information

Act on the Management of Alternative Investment Funds

Act on the Management of Alternative Investment Funds FINANSTILSYNET Norway Translation March 2015 This translation is for information purposes only. Legal authenticity remains with the official Norwegian version as published in Norsk Lovtidend. Act on the

More information

Transaction reporting

Transaction reporting MEMORANDUM Date: 13 October 2006 Updated: 16 May 2011 Transaction reporting Finansinspektionen Box 7821 SE-103 97 Stockholm, Sweden [Brunnsgatan 3] Tel +46 8 787 80 00 Fax +46 8 24 13 35 finansinspektionen@fi.se

More information

Law on Investment Management Companies

Law on Investment Management Companies (Unofficial translation) Published in the newspaper Latvijas Vēstnesis1 No. 342/346 on 30 December 1997, taking effect on 1 July 1998. As amended by: Law of 01.06.2000 (L.V., 20 June, No. 230/232; Ziņotājs,

More information

Appendix 5. Admission to Trading Rules. Contents. Introduction 2. Part 1 Admission to the Main Securities Market 3. 1 General 3

Appendix 5. Admission to Trading Rules. Contents. Introduction 2. Part 1 Admission to the Main Securities Market 3. 1 General 3 Appendix 5 Admission to Trading Rules Contents Introduction 2 Part 1 Admission to the Main Securities Market 3 1 General 3 2 Conditions for Admission 3 3 Application Process 5 4 Continuing Obligations

More information

Computershare Trust Company BYDSsm Buy Direct Stock

Computershare Trust Company BYDSsm Buy Direct Stock Computershare Trust Company BYDSsm Buy Direct Stock All correspondence and inquiries concerning the Program should be directed to: Computershare Trust Company P.O. Box A3309 Chicago, Illinois 60690-3309

More information

Act on Undertakings for Collective Investment in Transferable Securities (UCITS), Investment Funds and Professional Investment funds

Act on Undertakings for Collective Investment in Transferable Securities (UCITS), Investment Funds and Professional Investment funds This is an English translation. The original Icelandic text, as published in the Law Gazette (Stjórnartíðindi), is the authoritative text. Should there be discrepancy between this translation and the authoritative

More information

The Netherlands Authority for the Financial Markets. A legal person applying to become a Member of TOM MTF.

The Netherlands Authority for the Financial Markets. A legal person applying to become a Member of TOM MTF. TOM MTF DEFINITION LIST In the TOM MTF Rules (consisting of the Rule Book, the Membership Agreement, the Market Data Agreement, the Market Maker Agreement, the Trading Manual Cash Products, the Trading

More information

Table of content. MiFID II: getting ready for implementation

Table of content. MiFID II: getting ready for implementation Table of content MiFID II: getting ready for implementation The European Council adopted a set of legislation on 13 May 2014 regulating the trade in financial instruments and the investment services sector.

More information

(FRENCH TAX CODE, ART. 235 TER ZD, 235 TER ZD BIS AND 235 TER ZD TER ; ANNEXE III TO THE FRENCH TAX CODE, ART. 58 Q, 58 R AND 58 S) TABLE OF CONTENTS

(FRENCH TAX CODE, ART. 235 TER ZD, 235 TER ZD BIS AND 235 TER ZD TER ; ANNEXE III TO THE FRENCH TAX CODE, ART. 58 Q, 58 R AND 58 S) TABLE OF CONTENTS (FRENCH TAX CODE, ART. 235 TER ZD, 235 TER ZD BIS AND 235 TER ZD TER ; ANNEXE III TO THE FRENCH TAX CODE, ART. 58 Q, 58 R AND 58 S) INTRODUCTION TABLE OF CONTENTS TITLE 1 : TAX ON ACQUISITIONS OF EQUITY

More information

(Informal Translation) Chapter One. General Provisions. 1- The deposit of securities with the Company or with any licensed entity;

(Informal Translation) Chapter One. General Provisions. 1- The deposit of securities with the Company or with any licensed entity; CAPITAL MARKET AUTHORITY (Informal Translation) Central Securities Depository and Registry Law No. 93 of 2000 Chapter One General Provisions Article 1 In this Law, the Company means a company licensed

More information

PAYMENT TRANSACTIONS ACT (PTA)

PAYMENT TRANSACTIONS ACT (PTA) PAYMENT TRANSACTIONS ACT (PTA) Published in the Official Gazette of the Republic of Slovenia No. 30 on 5 April 2002 All effort has been made to ensure the accuracy of this translation, which is based on

More information

DESCRIPTION OF THE PLAN

DESCRIPTION OF THE PLAN DESCRIPTION OF THE PLAN PURPOSE 1. What is the purpose of the Plan? The purpose of the Plan is to provide eligible record owners of common stock of the Company with a simple and convenient means of investing

More information

CHAPTER 241 TAXATION OF BANKS AND OTHER FINANCIAL CORPORATIONS

CHAPTER 241 TAXATION OF BANKS AND OTHER FINANCIAL CORPORATIONS TAXATION OF BANKS AND OTHER FINANCIAL CORPORATIONS 241-1 CHAPTER 241 TAXATION OF BANKS AND OTHER FINANCIAL CORPORATIONS Section 241-1 Definitions 241-1.5 Time of application of tax and other provisions

More information

The FTT will be due irrespective of whether the acquisition is carried out by a company or an individual.

The FTT will be due irrespective of whether the acquisition is carried out by a company or an individual. French Parliament Adopts Proposed Legislation on Financial Transaction Tax with Few Amendments SUMMARY Draft legislation to introduce a financial transaction tax (the FTT ) in France was presented by the

More information

IDENTIFY THE CHANCES SHAPE THE FUTURE

IDENTIFY THE CHANCES SHAPE THE FUTURE Status: june 2015 Complete text of Memorandum and Articles of Association of DMG MORI Aktiengesellschaft Bielefeld IDENTIFY THE CHANCES SHAPE THE FUTURE 1 (1) The Company exists under the name DMG MORI

More information

Act amending Banking Act (ZBan-1L) Article 1

Act amending Banking Act (ZBan-1L) Article 1 Legal notice All effort has been made to ensure the accuracy of this translation, which is based on the original Slovenian text. All translations of this kind may, nevertheless, be subject to a certain

More information

L A W ОN FOREIGN EXCHANGE OPERATIONS

L A W ОN FOREIGN EXCHANGE OPERATIONS L A W ОN FOREIGN EXCHANGE OPERATIONS This Law shall govern: I GENERAL PROVISIONS Article 1 1) payments, collections and transfers between residents and nonresidents in foreign means of payment and dinars;

More information

Terms of Business. 03 March 2014. Authorised and regulated by the Financial Conduct Authority

Terms of Business. 03 March 2014. Authorised and regulated by the Financial Conduct Authority Terms of Business 03 March 2014 Authorised and regulated by the Financial Conduct Authority Our Particulars The full name of our firm is Winterflood Securities Limited ( Wins ) The address of our registered

More information

1 Organization of the Regulated Unofficial Market (Open Market) on the Frankfurt Stock Exchange for the Trading with Structured Products

1 Organization of the Regulated Unofficial Market (Open Market) on the Frankfurt Stock Exchange for the Trading with Structured Products of the Scoach Europa AG for the Trading with Structured Products in the Regulated Unofficial Market On the FWB Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) First Part: General Provisions 2 1

More information

STOCK TRADING MANUAL OF FOREIGN STOCK EXCHANGES

STOCK TRADING MANUAL OF FOREIGN STOCK EXCHANGES 130.000 STOCK TRADING MANUAL OF FOREIGN STOCK EXCHANGES Approved by Oficio (Official Letter) No. 07055 of the Superintendencia de Valores y Seguros (Chilean Securities and Insurance Supervisor) Dated December

More information

BANK OF MONTREAL SHAREHOLDER DIVIDEND REINVESTMENT AND SHARE PURCHASE PLAN

BANK OF MONTREAL SHAREHOLDER DIVIDEND REINVESTMENT AND SHARE PURCHASE PLAN BANK OF MONTREAL SHAREHOLDER DIVIDEND REINVESTMENT AND SHARE PURCHASE PLAN This Offering Circular covers common shares of Bank of Montreal (the Bank ) which may be purchased on the open market through

More information

3 ESTABLISHING A LEGAL PRESENCE

3 ESTABLISHING A LEGAL PRESENCE organizations funded by the state budget, other units of state importance, and certain public facilities. The main authority responsible for the implementation of the Second Privatization Program and coordination

More information

ACT of 27 May 2004 on Investment Funds 1. Part I General Provisions

ACT of 27 May 2004 on Investment Funds 1. Part I General Provisions The present English text is furnished for information purposes only. The original Polish text published in the Journal of Laws is binding in all respects. ACT of 27 May 2004 on Investment Funds 1 Part

More information

EXCHANGE RULES, SECTION XII. Conditions for Admission of Collective Investment Securities to Trading on the Regulated Market of the Exchange

EXCHANGE RULES, SECTION XII. Conditions for Admission of Collective Investment Securities to Trading on the Regulated Market of the Exchange EXCHANGE RULES, SECTION XII. Conditions for Admission of Collective Investment Securities to Trading on the Regulated Market of the Exchange PART I. GENERAL Article 1 Subject Matter and Definitions (1)

More information

REGULATIONS GOVERNING THE SENAF MULTILATERAL TRADING FACILITY

REGULATIONS GOVERNING THE SENAF MULTILATERAL TRADING FACILITY REGULATIONS GOVERNING THE SENAF MULTILATERAL TRADING FACILITY 1 SENAF REGULATIONS TITLE I - GENERAL PROVISIONS Article 1. Object Article 2. Scope of application Article 3. Governing bodies Article 4. Applicable

More information

Limited Liability Companies Act Finland

Limited Liability Companies Act Finland [UNOFFICIAL TRANSLATION Ministry of Justice, Finland 2012] Limited Liability Companies Act Finland (624/2006; amendments up to 981/2011 included; osakeyhtiölaki) PART I GENERAL PRINCIPLES, INCORPORATION

More information

Indian Accounting Standard (Ind AS) 32 Financial Instruments: Presentation

Indian Accounting Standard (Ind AS) 32 Financial Instruments: Presentation Indian Accounting Standard (Ind AS) 32 Financial Instruments: Presentation Contents Paragraphs Objective 2 3 Scope 4 10 Definitions 11 14 Presentation 15 50 Liabilities and equity 15 27 Puttable instruments

More information

Basic Rules of Issuing Invoices and Receipts 2014

Basic Rules of Issuing Invoices and Receipts 2014 Basic Rules of Issuing Invoices and Receipts 2014 Most requirements pertaining to invoicing are contained in Act CXXVII of 2007 on Value Added Tax (hereinafter: VAT Act) and the decrees issued on the basis

More information

Emerging Markets Equity Rules of the investment basket, valid as of 2 May 2013

Emerging Markets Equity Rules of the investment basket, valid as of 2 May 2013 Emerging Markets Equity Rules of, valid as of 2 May 2013 Main terms and conditions of the investment Name of : Mandatum Life Emerging Markets Equity Target market of : Equities and equity-related securities

More information

1 Overview of TOKYO PRO Market

1 Overview of TOKYO PRO Market I 1 Overview of TOKYO PRO Market Established by Tokyo Stock Exchange, Inc. (hereinafter "TSE"), TOKYO PRO Market is a specified financial instruments exchange market (namely market for professionals) specializing

More information

AMF Instruction Authorisation procedure for investment management companies, disclosure obligations and passporting DOC-2008-03

AMF Instruction Authorisation procedure for investment management companies, disclosure obligations and passporting DOC-2008-03 AMF Instruction Authorisation procedure for investment management companies, disclosure obligations and passporting DOC-2008-03 References: Articles 311-1 to 311-3, 311-7, 311-7-1, 313-53-1, 316-3 to 316-5,

More information

VPO NOK Rules. Rules for the Central Securities Settlement. in Norwegian Kroner

VPO NOK Rules. Rules for the Central Securities Settlement. in Norwegian Kroner Entry into force: 29. April 2015 Version: 1.1 Published 27. April 2015 VPO NOK Rules Rules for the Central Securities Settlement in Norwegian Kroner This document is a translation from the original Norwegian

More information

LAW ON FOREIGN EXCHANGE OPERATIONS OF FEDERATION OF BOSNIA AND HERZEGOVINA

LAW ON FOREIGN EXCHANGE OPERATIONS OF FEDERATION OF BOSNIA AND HERZEGOVINA The translation of BiH legislation has no legal force and should be used solely for informational purposes. Only legislation published in the Official Gazettes in BiH is legally binding. LAW ON FOREIGN

More information

Danske Invest Government Bond Fund

Danske Invest Government Bond Fund Danske Invest Government Bond Fund Bond Funds Fund Regulations The Finnish Financial Supervision Authority approved the Regulations on 18 October, 2012. These Regulations are valid as of 19 December, 2012.

More information

Contracts for Difference (CFDs)

Contracts for Difference (CFDs) Contract for Difference (CFDs) and FCA Disclosure Requirements What are Contract for Difference (CFDs) CFDs (also known as Synthetic Equity Swaps (SES)) are Over the Counter (OTC) transactions which allow

More information

Non-Complex Products. Complex Products. General risks of trading

Non-Complex Products. Complex Products. General risks of trading We offer a wide range of investments, each with their own risks and rewards. The following information provides you with a general description of the nature and risks of the investments that you can trade

More information

THE CROATIAN PARLIAMENT DECISION PROMULGATING THE ACT ON INVESTMENT FUNDS WITH A PUBLIC OFFERING

THE CROATIAN PARLIAMENT DECISION PROMULGATING THE ACT ON INVESTMENT FUNDS WITH A PUBLIC OFFERING THE CROATIAN PARLIAMENT Pursuant to Article 89 of the Constitution of the Republic of Croatia, I hereby pass the DECISION PROMULGATING THE ACT ON INVESTMENT FUNDS WITH A PUBLIC OFFERING I hereby promulgate

More information

THE STOCK EXCHANGE ACT

THE STOCK EXCHANGE ACT THE STOCK EXCHANGE ACT Complete wording of the Act on the Stock Exchange of 18 June 2002 No 429/2002 Coll. as results from amendments made by Act No 594/2003 Coll., Act No 635/2004 Coll., Act No 43/2004

More information

The NASDAQ OMX Helsinki - IPO Overview

The NASDAQ OMX Helsinki - IPO Overview The NASDAQ OMX Helsinki - IPO Overview 1. Regulatory Background 1.1 Overview of Regulatory Background EC Regulations 809/2004 (on prospectuses) and 2273/2003 (on buy-back programmes) are directly applicable,

More information

United Nations Convention on the Assignment of Receivables in International Trade

United Nations Convention on the Assignment of Receivables in International Trade United Nations Convention on the Assignment of Receivables in International Trade UNITED NATIONS UNITED NATIONS CONVENTION ON THE ASSIGNMENT OF RECEIVABLES IN INTERNATIONAL TRADE UNITED NATIONS New York,

More information

A-Z GUIDE THE NEW DANISH COMPANIES ACT. U p d a t e d S e p t e m b e r 2 0 1 3

A-Z GUIDE THE NEW DANISH COMPANIES ACT. U p d a t e d S e p t e m b e r 2 0 1 3 A-Z GUIDE THE NEW DANISH COMPANIES ACT U p d a t e d S e p t e m b e r 2 0 1 3 Table of Contents A... 3 B... 3 C... 4 D... 5 E... 6 F... 7 G... 8 I... 8 L... 9 M... 11 N... 12 O... 13 P, Q... 13 R... 15

More information

DECISION NO (94/R) OF 2005 CONCERNING THE LISTING OF DEBT SECURITIES

DECISION NO (94/R) OF 2005 CONCERNING THE LISTING OF DEBT SECURITIES DECISION NO (94/R) OF 2005 CONCERNING THE LISTING OF DEBT SECURITIES The Chairman of the Board of Directors of the Stocks and Commodities Authority has, After pursuing the provisions of Federal Law No.

More information

Schedule of Allowable Investments

Schedule of Allowable Investments Schedule of Allowable Investments for the Suffolk Life MasterSIPP This document is part of a set, all of which should be read together. Key Features Your Personal Illustration Schedule of Fees Schedule

More information

LAW ON PAYMENT SERVICES

LAW ON PAYMENT SERVICES LAW ON PAYMENT SERVICES Part I INTRODUCTORY PROVISIONS Subject matter Article 1 This Law regulates the conditions and manner of providing payment services, electronic money, payment systems and supervision

More information

7 IX. Equity (EEA Prospectus Directive) this is provisionally deleted pending review

7 IX. Equity (EEA Prospectus Directive) this is provisionally deleted pending review ICMA PRIMARY MARKET HANDBOOK (IPMA HANDBOOK) Section Seven Standard Documentation & Standard Language 7 IX Standard Form Selling Restrictions A B Debt (UK) Equity (EEA Prospectus Directive) this is provisionally

More information

Rules of Alternative Trading System organised by the BondSpot S.A.

Rules of Alternative Trading System organised by the BondSpot S.A. Rules of Alternative Trading System organised by the BondSpot S.A. The Rules adopted by the Management Board by Resolution No. 103/2009 dated 4 November 2009, as amended by the Management Board: by Resolution

More information

RULES. The Central Securities Depository of Poland (KDPW) CHAPTER I GENERAL PROVISIONS

RULES. The Central Securities Depository of Poland (KDPW) CHAPTER I GENERAL PROVISIONS rules_ of The Central Securities Depository of Poland (KDPW) Valid as of 3 February, 2014 RULES Of The Central Securities Depository of Poland (KDPW) CHAPTER I GENERAL PROVISIONS 1 1. The Rules of the

More information

Risk Warning Notice for Contracts for Difference ( CFDs ) and Spot Foreign Exchange ( Forex )

Risk Warning Notice for Contracts for Difference ( CFDs ) and Spot Foreign Exchange ( Forex ) Risk Warning Notice for Contracts for Difference ( CFDs ) and Spot Foreign Exchange ( Forex ) 1. INTRODUCTION 1.1. TradingForex.com is a domain owned and operated by TTCM Traders Trust Capital Markets

More information

NATURE AND SPECIFIC RISKS OF THE MAIN FINANCIAL INSTRUMENTS

NATURE AND SPECIFIC RISKS OF THE MAIN FINANCIAL INSTRUMENTS NATURE AND SPECIFIC RISKS OF THE MAIN FINANCIAL INSTRUMENTS The present section is intended to communicate to you, in accordance with the Directive, general information on the characteristics of the main

More information

STATUTORY INSTRUMENTS. CENTRAL BANK (SUPERVISION AND ENFORCEMENT) ACT 2013 (SECTION 48(1)) CLIENT ASSET REGULATIONS 2015 FOR INVESTMENT FIRMS

STATUTORY INSTRUMENTS. CENTRAL BANK (SUPERVISION AND ENFORCEMENT) ACT 2013 (SECTION 48(1)) CLIENT ASSET REGULATIONS 2015 FOR INVESTMENT FIRMS STATUTORY INSTRUMENTS. S.I. No. )04, of 2015 CENTRAL BANK (SUPERVISION AND ENFORCEMENT) ACT 2013 (SECTION 48(1)) CLIENT ASSET REGULATIONS 2015 FOR INVESTMENT FIRMS S.I. No. (74 of 2015 CENTRAL BANK (SUPERVISION

More information

NORTHERN BLIZZARD RESOURCES INC. STOCK DIVIDEND PROGRAM

NORTHERN BLIZZARD RESOURCES INC. STOCK DIVIDEND PROGRAM NORTHERN BLIZZARD RESOURCES INC. STOCK DIVIDEND PROGRAM Introduction This Stock Dividend Program (the "Program") provides eligible holders ("Shareholders") of common shares ("Common Shares") of Northern

More information

Rules of Alternative Trading System organised by the BondSpot S.A.

Rules of Alternative Trading System organised by the BondSpot S.A. Rules of Alternative Trading System organised by the BondSpot S.A. text according to legal condition at 1 January 2013 Only the Polish version of these documents is legally binding. This translation is

More information

TAXATION OF FINANCIAL INSTRUMENTS

TAXATION OF FINANCIAL INSTRUMENTS 2 Ing. Katarína Vavrová Faculty of Business Management University of Economics in Bratislava Investment in securities is influenced not only by the relation between the intrinsic value and market price

More information

(Legislative acts) REGULATIONS

(Legislative acts) REGULATIONS 24.3.2012 Official Journal of the European Union L 86/1 I (Legislative acts) REGULATIONS REGULATION (EU) No 236/2012 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 14 March 2012 on short selling and

More information

The Bank of Nova Scotia Shareholder Dividend and Share Purchase Plan

The Bank of Nova Scotia Shareholder Dividend and Share Purchase Plan The Bank of Nova Scotia Shareholder Dividend and Share Purchase Plan Offering Circular Effective November 6, 2013 The description contained in this Offering Circular of the Canadian and U.S. income tax

More information

BANK LEVY DOUBLE TAXATION AGREEMENT BETWEEN THE UNITED KINGDOM AND THE FEDERAL REPUBLIC OF GERMANY

BANK LEVY DOUBLE TAXATION AGREEMENT BETWEEN THE UNITED KINGDOM AND THE FEDERAL REPUBLIC OF GERMANY BANK LEVY DOUBLE TAXATION AGREEMENT BETWEEN THE UNITED KINGDOM AND THE FEDERAL REPUBLIC OF GERMANY The Agreement, which was signed in London on 7 December 2011, entered into force on 21 February 2013.

More information

Rules for the admission of shares to stock exchange listing (Listing Rules)

Rules for the admission of shares to stock exchange listing (Listing Rules) Rules for the admission of shares to stock exchange listing (Listing Rules) TABLE OF CONTENTS: 1. GENERAL... 3 2. CONDITIONS FOR ADMISSION TO LISTING... 3 2.1 GENERAL CONDITIONS... 3 2.1.1 Public interest,

More information

2010 Portfolio Management Guidelines

2010 Portfolio Management Guidelines 2010 Portfolio Management Guidelines Preamble The Board of Directors of the Swiss Bankers Association has adopted these Guidelines in order to maintain and enhance the reputation and high quality of Swiss

More information

PAYMENT SERVICES AND SYSTEMS ACT (ZPlaSS) CHAPTER 1 GENERAL PROVISIONS SUBCHAPTER 1 CONTENT OF THE ACT. Article 1. (scope)

PAYMENT SERVICES AND SYSTEMS ACT (ZPlaSS) CHAPTER 1 GENERAL PROVISIONS SUBCHAPTER 1 CONTENT OF THE ACT. Article 1. (scope) Legal notice All effort has been made to ensure the accuracy of this translation, which is based on the original Slovenian text. All translations of this kind may, nevertheless, be subject to a certain

More information

NOTICE OF JOINT SHAREHOLDERS MEETING

NOTICE OF JOINT SHAREHOLDERS MEETING SOCIETE GENERALE A French limited liability company with share capital of EUR 542 691 448,75 Head office: 29, boulevard Haussmann 75009 Paris 552 120 222 R.C.S. Paris NOTICE OF JOINT SHAREHOLDERS MEETING

More information

Explanatory Memorandum

Explanatory Memorandum Explanatory Memorandum Authorisation for the purchase and disposal of treasury shares, pursuant to the combined provisions of Articles 2357 and 2357-ter of the Civil Code, and Article 132 of Legislative

More information

The Business Enterprise Registration Act

The Business Enterprise Registration Act Please note: The text below is a translation of the original Norwegian Act. Should any doubt arise, the Norwegian text of the Act is valid and binding. The Business Enterprise Registration Act Latest update:

More information

OPERATING RULES OF THE CENTRAL SECURITIES DEPOSITORY AND CLEARING HOUSE. (Consolidated text reflecting amendments entered into force Jan, 19, 2015)

OPERATING RULES OF THE CENTRAL SECURITIES DEPOSITORY AND CLEARING HOUSE. (Consolidated text reflecting amendments entered into force Jan, 19, 2015) OPERATING RULES OF THE CENTRAL SECURITIES DEPOSITORY AND CLEARING HOUSE (Consolidated text reflecting amendments entered into force Jan, 19, 2015) Page 1 I. BASIC PROVISIONS 1. [1] The Central Securities

More information

ishares IV Public Limited Company

ishares IV Public Limited Company ishares IV Public Limited Company (An umbrella investment company with variable capital and having segregated liability between its Funds incorporated with limited liability in Ireland under registration

More information

Mexico Mergers and acquisitions involving Mexican assets

Mexico Mergers and acquisitions involving Mexican assets p84-88 IM&A - Chevez Rulz 21/03/2013 08:44 Page 84 Mexico Mergers and acquisitions involving Mexican assets by Ricardo Rendon and Layda Carcamo, Chevez, Ruiz, Zamarripa y Cia, S.C. Whenever a corporate

More information

Statutory Instruments EUROPEAN COMMUNITIES (TAXATION OF SAVINGS INCOME IN THE FORM OF INTEREST PAYMENTS) REGULATIONS 2003

Statutory Instruments EUROPEAN COMMUNITIES (TAXATION OF SAVINGS INCOME IN THE FORM OF INTEREST PAYMENTS) REGULATIONS 2003 Statutory Instruments S.I. No. 717 of 2003 EUROPEAN COMMUNITIES (TAXATION OF SAVINGS INCOME IN THE FORM OF INTEREST PAYMENTS) REGULATIONS 2003 PUBLISHED BY THE STATIONERY OFFICE DUBLIN To be purchased

More information

General Risk Disclosure

General Risk Disclosure General Risk Disclosure Colmex Pro Ltd (hereinafter called the Company ) is an Investment Firm regulated by the Cyprus Securities and Exchange Commission (license number 123/10). This notice is provided

More information

NEW 0,2% TRANSACTION TAX (FTT) ON FRENCH BLUE CHIPS UPDATE

NEW 0,2% TRANSACTION TAX (FTT) ON FRENCH BLUE CHIPS UPDATE CBS128 31 July 2012 NEW 0,2% TRANSACTION TAX (FTT) ON FRENCH BLUE CHIPS UPDATE Monte Titoli is pleased to provide its customers with AN UPDATE on information regarding the forthcoming Financial Transaction

More information

CZECH REPUBLIC ACT ON BONDS

CZECH REPUBLIC ACT ON BONDS CZECH REPUBLIC ACT ON BONDS Important Disclaimer This translation has been generously provided by the Czech National Bank. This does not constitute an official translation and the translator and the EBRD

More information

From the Official Gazette, no. 85, of 13-4-2010 MINISTRY FOR CULTURAL ASSETS AND ACTIVITIES

From the Official Gazette, no. 85, of 13-4-2010 MINISTRY FOR CULTURAL ASSETS AND ACTIVITIES From the Official Gazette, no. 85, of 13-4-2010 MINISTRY FOR CULTURAL ASSETS AND ACTIVITIES DECREE, 21 January 2010 Provisions for application of tax credits conceded to companies not belonging to the

More information

The Netherlands Authority for the Financial Markets. A legal person applying to become a Member of TOM MTF.

The Netherlands Authority for the Financial Markets. A legal person applying to become a Member of TOM MTF. TOM MTF DEFINITION LIST In the TOM MTF Rules (consisting of the Rule Book, the Membership Agreement, the Market Data Agreement, the Market Maker Agreement, the Trading Manual Cash Products, the Trading

More information