Dealers trash Section 871(m) reforms

Controversial tax reforms would foist “unworkable” compliance burdens on firms

dealers unhappy with new rules

Equity-linked instruments (ELIs) are the latest products to be trounced by US lawmakers' anti-tax-avoidance crusade. Local regulations have long subjected US-source stock dividend payments to overseas clients to a 30% withholding tax, as well as on substitute payments on securities loans, sale-repurchase agreements, and similar transactions referencing US equities. Until 2010, however, one perceived loophole remained: so-called dividend-equivalent payments to foreign persons packaged in notional

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