On October 14, ISDA, the Association for Financial Markets in Europe (AFME) and the International Securities Lending Association (ISLA) submitted a joint response to the Dutch Ministry of Finance on its proposed measures on dividend stripping. While supporting the policy objective, the associations stress that the rules must not inadvertently disrupt legitimate trading, hedging, collateral and securities lending activity. Key recommendations include a treaty rate exemption like Germany’s approach, a broader ordinary business exemption for regulated financial institutions, protection for temporary securities transfers for lending or collateral purposes and implementation no earlier than January 1, 2028. The letter also highlights evidence from Austria, where changes to withholding tax rules were followed by a 47% reduction in lendable securities, illustrating the potential liquidity and market efficiency consequences of poorly calibrated rules.
Documents (1) for ISDA, AFME and ISLA Respond to Dutch Ministry of Finance on Dividend Stripping
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