Ice Futures, the UK-regulated subsidiary of Atlanta-based IntercontinentalExchange (Ice), is to be allowed the same tax treatment afforded to contracts traded on US futures exchanges from April 1.The US Internal Revenue Service (IRS) announced the revenue ruling, which designates Ice Futures as a “qualified board or exchange”, thereby providing 60/40 tax treatment to US participants trading in Ice Futures markets. This means that US customers trading on Ice Futures will receive the same tax treatment as they receive on US futures exchanges. Market users of the New York Board of Trade, Ice’s US regulated futures subsidiary, already receive 60/40 tax treatment.Under this tax treatment 60% of gains (or losses) on Ice Futures’ contracts will be treated as long-term capital gain (or loss), and 40% of such gains (or losses) will be treated as short-term capital gain (or loss). This is a more favourable rate for traders than the ordinary income tax rate. Ice Futures has a growing customer base in the US, and the ruling means it will be competing more equally with US exchanges for US traders, said an Ice spokesperson. However, Ice does not believe investors make trading decisions based exclusively on tax considerations, and it is unlikely that the ruling will affect most corporate filers.
More on Exchanges
China exchange developing technique to reduce margin requirements
Significant global players not on list to join Shanghai Clearing House
Taiex futures set to be followed by other products
New equity options on two exchanges
Sign up for Risk.net email alerts
Nominated for two technology awards
Nominated for post trade technology award
Sponsored webinar: Collateral and counterparty tracking
Isda directors warn on fragmentation, access and liquidity - but expect problems to pass
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.