“This is excellent news for London’s investment community. While growth in ETF activity in London over the last two years has been very strong, the levying of stamp duty on non-resident ETFs has deterred new product providers from entering the market, limiting the range of ETFs available in the UK.
“We are very pleased that the Government will put London’s ETF market on a more equal footing with other European markets where ETF trading volumes are currently up to four times as high as our own. We look forward to with working with the industry to offer investors access to a wider range of these highly flexible investment and trading tools.”
ETF trading on the London Stock Exchange has grown significantly over the last two years. The total value traded in ETFs on the Exchange so far this year has reached £13.9 billion, double the £6.9 billion traded during the same period last year and more than three times the value traded during January to November 2004.
There are currently 47 ETFs traded on the London Stock Exchange, covering a range of UK and global equity and bond indices. Twelve ETFs are traded on the Exchange’s unique multicurrency trading service which gives investors the choice of buying ETFs in either the local currency or the base currency of the index. This gives dollar based investors a tax-efficient alternative to buying ETFs in the US markets, without the currency risk associated with a sterling priced ETF.
