Whispers in Brussels indicate that a transaction tax against high frequency traders (HFTs) is once again being seriously considered in Brussels.
An in-depth investigation on the role of long-term investment in equity markets noted that HFTs, who often hold shares “for a matter of milliseconds”, had a distorting effect on the concept of 'ownership'.
Such a tax has long been advocated by those desirous of changing the behaviour of very short-term investors.
Coupled with the drive for the HFT transaction tax is a move to ensure that any new data centre conforms to new green standards to reduce electricity consumption and heat dissipation.
One former Exchange CEO is hoping to benefit from the move to Green Data Centres. Peter Randall, former Chief Executive of Equiduct, is considering turning over at least a third of the acreage at his Wiltshire farm to production of a revolutionary new biofuel which could be utilised in the new style data centres.
With all these new regulations poised to come into effect on April 1st, 2017, lobbying to water down the proposals coming out of Brussels is bound to be fierce.
Whatever the outcome of the forthcoming election in the UK, the incoming government will almost certainly be against these new proposals.
Lord Emsworth, a prominent member of the cross party UK select committee on Banking and Finance has already spoken out against the issue and UKIP, the UK Eurosceptic party, is certain to make this a campaign issue.
The view from the City of London is, as one would expect firmly against the HFT tax. A well-known figure in the Square Mile that we spoke to said “Speaking as a humble practitioner, this tax on traders using sophisticated technology will only punish innovation but not improve markets.”
Avril Feule, Markets Correspondent