The European Parliament issued its opinion on the Commission's proposal for a Council directive on a common system of financial transaction tax (FTT) last month on Wednesday, 23 May. The Parliament recommended that an FTT should be introduced even if only some Member States opt for it and also proposed that the tax should be designed to apply to even more traders than proposed by the Commission.

While the strong backing from European Parliament is welcomed by the Commission, the introduction of an FTT requires unanimous approval among the 27 Member States. The UK continues to be opposed to the tax. The role of the Parliament is primarily consultative on such issues.

Parliament's issued opinion states that the FTT should apply to financial institutions located outside the EU if they trade in securities originally issued within the EU. Parliament also recommends linking the payment of FTT to the acquisition of legal ownership rights whereby the purchaser of a security would not have legal ownership of the security if the FTT was not correctly applied.

For full details see http://www.europarl.europa.eu/news/en/pressroom/content/20120523IPR45627/html/Parliament-adopts-ambitious-approach-on-financial-transaction-tax