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LONDON, March 1 (Reuters) - A new Italian tax on financial transactions and high-frequency trading came into force on Friday. It applies to cash equity instruments and will be followed by a tax on derivative contracts from July 1.
Following is a summary of the measures. More details can be found on www.mef.gov.it/en/index.html
For a story on the impact, see
* The tax applies to shares issued by companies domiciled in Italy with a market capitalisation of more than 500 million euros ($654 million) and covers depositary receipts listed abroad.
* Investors are charged 0.12 percent of the value of the shares they buy in a regulated market or on a regulated trading platform -- known as multi-lateral trading facilities (MFTs) -- such as BATS Chi-X or Turquoise.
* The tax rate is 0.22 percent for transactions conducted "over the counter" -- directly between dealers and investors rather than via an exchange.
* These rates will be cut to 0.1 and 0.2 percent, respectively, from next year.
* Derivative transactions will be subject to a tax from July 1. The amount of the tax, which will be levied on both the buyer and the seller, depends on the notional value of the contract.
* A separate 0.02 percent tax is imposed on transactions in the Italian financial market if an order is issued and then amended or cancelled within half a second, and the ratio between the cancelled or amended orders and the completed ones is greater than 60 percent per single financial instrument.
* The tax does not apply to units of open-ended investment companies or exchange traded funds (ETFs).
* European pension funds are also exempt, as are brokers when they act as market makers or liquidity providers
* Stock lending, repurchase agreements, primary market transactions, such as share issues, and investments that qualify as "ethical" or "socially responsible" under Italian law are not subject to the levy.
* The European Central Bank and other supranational entities are also exempt. ($1 = 0.7649 euros) (Reporting By Francesco Canepa, editing by Nigel Stephenson)