Boerse Stuttgart sees clear disadvantages for securities trading in Germany and Europe in any possible financial transaction tax. A financial transaction tax in the form discussed until now would in particular weigh disproportionately heavy on private investors and impair the efficiency of markets. In the event such a tax is introduced, Boerse Stuttgart therefore demands it be designed responsibly and, on the occasion of Wednesday’s hearing on the financial transaction tax held by the finance committee of the German Bundestag, has submitted its official position in a statement.
One of Boerse Stuttgart's central demands is that private investors must be exempted from the financial transaction tax since they are not the cause of the financial crisis and largely finance their investments in asset formation and retirement provisions with income that has already been taxed. "Double taxation of private investors must be avoided at any cost," says Christoph Lammersdorf, CEO at Boerse Stuttgart.
The extent of a negative impact on market efficiency depends not least of all on how heavy the tax rate will be: the previously proposed tax rate of 10 base points lies significantly above the fees for trading in liquid leading securities in the amount of 0.1 to 0.5 base points. "If the tax goes through at the rate now planned it would at the least mean raising the costs twenty times over for using the previously highly efficient European securities markets," as Christoph Lammersdorf stated.
A further disadvantage for investors in countries with a financial transaction tax: the quality of price determination in the tax jurisdiction would deteriorate due to migration of liquidity to financial centres beyond the reach of the tax. Isolated introduction of the financial transaction tax in the Eurozone alone would, from Boerse Stuttgart's perspective, not be conducive to achieving its goals. Boerse Stuttgart additionally demands that the tax not be allowed to negatively impact on companies trying to raise capital. For that reason, exemption criteria for liquidity providers must be worked out for the secondary market as well as for trading in bonds issued by medium-sized companies, which are frequently also used to raise capital directly on the secondary market.
As the market leader for derivatives in Europe and for corporate bonds in Germany, Boerse Stuttgart is Europe's leading stock exchange for private investors. In Stuttgart investors can efficiently trade equities, derivatives, bonds, investment fund units and participation certificates at reasonable prices. With an average of around 38 percent of order book turnover, Boerse Stuttgart is Germany's leading player in the area of intermediary-based stock exchange trading. With particular regard to corporate bonds and investment fund units, Boerse Stuttgart leads the German market. With a hybrid market model, that involves trading experts into the electronic trading process, the Stuttgart Stock Exchange guarantees extremely flexible and cost-effective order execution. For the greatest possible transparency and a high degree of investor protection the entire trading process is monitored by the Trading Surveillance Office, an independent stock exchange body. In order to provide investors with optimum information about the products on offer, Boerse Stuttgart organises a large number of educational activities for private investors, advisers and anyone else who is interested.
