First person: Section 871(m) amendment favours single-stock futures
Nicolas Billeaud, head of securities finance and cash management at New York-based broker/dealer Saratoga Capital reflects on the cross-border stock loan and equity swap market
Section 871(m) was enacted as part of the Hiring Incentives to Restore Employment (Hire) Act, and provides that dividend-equivalent payments to foreign entities will be treated as a dividend from sources within the US and subject to withholding.
The US Treasury’s proposed amendment to Reg 871(m) (the proposed regulations) has altered the landscape of the cross-border stock loan and equity swap market. While the proposed regulations seek to withhold all “dividend equivalents” payments made to
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