Bloomberg News

Banks Said to Curb Conversion of French Stocks Amid Tax Concern

January 16, 2012

Jan. 13 (Bloomberg) -- Citigroup Inc., JPMorgan Chase & Co. and Tullett Prebon Plc started restricting orders to convert French stocks into American Depositary Receipts amid concern about how taxation changes will affect share dealing.

The brokerages suspended taking orders yesterday for so- called cross-book swaps, where a client exchanges French shares for U.S.-listed ADRs, or didn’t quote prices for the trades, according to four people familiar with the situation, who asked not to be identified because the information isn’t public.

The move was prompted by legislation introduced on Jan. 1 that extends duties on the sale of shares outside France, one of the people said. It wasn’t related to concern President Nicolas Sarkozy will impose a new tax on financial transactions. The law removed a 5,000-euro ($6,400) cap on the tax payable on a sale, KPMG LLP wrote in a report on its website dated Dec. 21.

“It’s stemming from confusion regarding the new taxation of the transfer of shares, and had little to do with any possible new tax on financial transactions,” Stephane Ekolo, chief European strategist at Market Securities in London, said in a phone interview. “That debate is still pending.”

Kate Haywood, a spokeswoman for JPMorgan in London, Jeff French, a spokesman for Citigroup, and Nigel Szembel of Tullett Prebon all declined to comment.

France will lead the way in imposing duties on financial transactions in an effort to spur other countries into joining, Sarkozy said Jan. 10 in a speech in the eastern French city of Mulhouse. The president faces elections in a two-round vote in April and May this year and wants to make good on a pledge he made to impose such a tax when France last year held the presidency of both the G-8 and G-20 group of countries.

--With assistance from Adria Cimino and Heather Smith in Paris. Editors: Andrew Rummer, Chris Nagi

To contact the reporters on this story: Alexis Xydias in London at; Sarah Jones in London at

To contact the editor responsible for this story: Andrew Rummer at

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