The situation
A fund manager’s share and derivative trades, brokers and custodians
Your asset manager in Frankfurt runs three equity funds that buy French, Italian and Spanish shares, trades some Italian equity options and lends securities to brokers. A new prime broker has asked which trades it should treat as taxable and who reports them. Operations wants one note that answers it per country.
Each tax is short on paper. The hours go on the edges: which issuers are in scope this year, whether the tax follows the trade or the change of ownership, who in the chain pays and who collects, and which exemptions cover securities lending, market making and corporate actions. Three countries give three different answers.
What the research has to settle
The rules behind the answer
- National taxes, not an EU tax
- France, Italy and Spain each levy their own tax on share transactions. The EU-wide financial transaction tax proposed under enhanced cooperation has not been adopted, so each national law is read on its own terms.
- Scope follows the issuer
- The French and Spanish taxes apply to acquisitions of shares in domestic companies above a market-capitalisation threshold, identified on lists published for each year. The Italian tax applies to shares of Italian companies and extends to certain derivatives and high-frequency trading. Where the buyer or the trading venue sits does not take a trade out of scope.
- Collection runs through intermediaries
- Each law names who pays and who collects, typically the investment firm that executes the order and, failing that, the custodian. A fund needs to know which of its brokers and custodians collects and reports in each country.
- Exemptions differ in detail
- Primary issues, market making, certain intra-group transfers and temporary transfers such as securities lending are exempt in some or all of the three countries. The conditions differ, so each exemption is checked against the national text.
How it runs in azta
From the question to the document
The question, as you would type it
German fund manager buying listed French, Italian and Spanish shares through a UK prime broker, lending some of them out, and trading Italian equity options. Which trades fall under each national financial transaction tax, who is liable and who collects, and do securities loans qualify for an exemption?
You start with
A fund manager’s share and derivative trades, brokers and custodians
- 01
Describe the trades
Set out the funds, the instruments, the brokers and the custodians. azta searches the French, Italian and Spanish legislation and EU law.
Cited research· Free - 02
Compare the national texts
Open each country’s provisions in the statute reader, in the original language, and compare scope and exemptions side by side.
Atlas statute reader - 03
Draft the note
Ask for a note with one section per country and a table of trade types: taxable or exempt, liable party and collecting party. Edit it in Canvas.
Canvas · Ask azta· Pro - 04
Share it with operations and the broker
Export to Word for operations and the prime broker, with the provisions cited.
Word export· Pro You send
A note per country on scope, liable and collecting party, and exemptions
What you get
A note per country on scope, liable and collecting party, and exemptions
Tax note · draft
Financial transaction taxes: French, Italian and Spanish trades
France and Spain. The taxes apply to purchases of shares of domestic issuers on the published lists for the year, wherever the trade is executed. For our funds, the prime broker collects and reports as the executing firm. Securities lending is covered in section 3, with the conditions for the exemption in each country.
Italy. The tax applies to purchases of shares of Italian companies that are not excluded by size, and separately to equity derivatives on those shares. Our options positions therefore need a second check. The custodian confirms whether it collects for trades executed outside its own systems.
Next steps. Operations maps each broker and custodian to its role in each country before the next quarter-end and keeps the confirmations on file. The issuer lists are checked at the start of each year.
Outcomes on your numbers
What azta is worth on this task
Pro pays for itself after
13 minutes a month
At €130 an hour, that is all the time Pro (€27 a month) has to take off your desk to cover its price.
Example figures. Replace them with your own.
- Hours back a year
- 22
- Capacity at your rate
- €2,808
- More transaction tax notes a quarter
- 0.8
- Return on Pro
- 8.7×
- Research
- Drafting
- Your review
A scenario you set, not a promise. The hours that come back go to another client, or deeper into this one.
Want these numbers on your team’s real workload?
Book a demoWhat stays with you
- The trade data and the role of each broker and custodian.
- Declarations to the tax authorities, which run through your intermediaries.
- The position on any trade the law leaves open.
Frequently asked questions
- Does azta hold the French, Italian and Spanish tax guidance?
- It holds the legislation of all three countries in the original language. Administrative guidance from the tax authorities is not in the corpus, so check it where the note relies on it.
- Does it calculate the tax on our trades?
- No. It sets out scope, liability and exemptions with sources. The calculation and the declarations run through your intermediaries.
- Can it show the rules as they stood last year?
- Yes. Ask about the law at a past date, which matters for corrections and audits.
