EC recognises member state fears that FTT will hurt clearing

The European Commission has acknowledged concerns about the impact of its proposed financial transaction tax (FTT) on cleared over-the-counter derivatives trades, after a leaked discussion document revealed member state fears that the tax regime could encourage market participants not to clear and even threaten clearing house solvency.

The document – dated April 16 and seen by Risk – was prepared for the European Council working party on tax questions by the European Commission's Taxation and