BinckBank Says EU Financial-Transaction Tax May Double Costs

BinckBank NV (BINCK) Chief Executive Officer Koen Beentjes said he’s concerned about the impact on his company of a proposed European financial-transaction tax that may double costs for investors.

The exact effect would depend on how much customers would reduce transactions, Beentjes said in a telephone interview today. “It would definitely go in the wrong direction.”

The European Union proposed a financial-transactions tax that would take effect in 2014 and raise about 57 billion euros ($79 billion) a year. The plan would apply a levy of 0.1 percent on trading of stocks and bonds, with a 0.01 percent rate for derivatives contracts. The proposal has prompted opposition from countries including the Netherlands and the U.K.

Dutch clients of BinckBank, an Amsterdam-based online broker, paid 14 euros per transaction on average in the last quarter, Beentjes said, with a transaction value of 7,000 euros to 8,000 euros. A 0.1 percent tax would add 7 euros in transaction costs as BinckBank would pass the levy on to customers, he said.

The so-called Tobin tax “could seriously harm the operations of BinckBank,” while the company has not yet given an update on the expected impact on demand, said Maarten Altena, an Amsterdam-based analyst at ING Groep NV.

In Belgium, where a transaction tax is in place, “you see there’s a lot less trading than in the Netherlands,” Beentjes said. “But I do not have an objective comparison.”

A 0.17 percent tax applies on equity transactions and a 0.07 percent levy on bond trades in Belgium, according to an overview on BinckBank’s Belgian website. The country is BinckBank’s second biggest in customer accounts behind the Netherlands, while it lags behind that country and France in transaction numbers.

To contact the reporter on this story: Maud van Gaal in Amsterdam at mvangaal@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

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