Securities lending revenue in Germany has taken a substantial hit since legislators in the country introduced tax changes on mutual funds and a crackdown on dividend arbitrage trades.
Alterations to the German Investment Tax Act (InvTA), adopted by parliament this year, have been the main factor behind falling fees for beneficial owners loaning out German stocks.
The revisions have had a “devastating effect” on German lending programmes, according to panelists at the fifth Global Investor/ISF securities finance summit in Frankfurt, with earnings slumping in the second quarter of 2016 compared to the same period last year.
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