The European Commission has acknowledged concerns about the impact of its proposed financial transaction tax (FTT) on cleared over-the-counter derivatives trades, after a leaked discussion document revealed member state fears that the tax regime could encourage market participants not to clear and even threaten clearing house solvency.

The document – dated April 16 and seen by Risk – was prepared for the European Council working party on tax questions by the European Commission's Taxation and Customs Union, DG Taxud. Delegations from six member states submitted questions, with those from the Czech and UK delegations focusing on how the tax would apply to cleared trades.

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