The Commission says that while pension funds would be subject to the FTT, the impact on their activity would vary depending on their portfolios and investment strategy. "Pension funds generally have a diversified portfolio of assets and invest their money in financial instruments, mainly bonds, but also in assets that are not affected by the FTT, such as cash and currencies, deposits, real estate, loans, gold and silver", the Commission said.
It also claimed "conservative", fully-funded pension funds tended to follow low-risk strategies – typically reflected in the buying of equities and bonds when issued and then holding them to maturity.
Under the details set by the Commission, an FTT of 0.1 per cent will be applied to shares and bonds, units of collective investment funds, money market instruments, repurchase agreements and securities lending agreements, while a tax of 0.01 per cent will be charged on derivative products.
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