Hundreds of billions of trades zipping through scattered data centers in northern New Jersey usually do so quietly. At least, as long as the state wants a piece.
The largest US stock exchange and major market makers are joining forces to fight the proposed tax on financial transactions under consideration by New Jersey Governor Phil Murphy. Members of the newly formed coalition – e.g. New York Stock Exchange, Nasdaq Inc., Citadel Securities and Virtu Financial Inc. – Threatening to shift operations from the state if the tax comes into force.
Now, an industry trial of the backup system later this month is turning into a demonstration that Wall Street firms can pack their bags if needed. Modern markets are built on pace, but the biggest companies say they will sacrifice a fraction of a second if they mean to avoid billions in taxes.
On December 26, we will conduct a test to make sure the industry is ready to move out of New Jersey should the tax pass, “the coalition, which calls itself the Coalition to Prevent Retirement Savings, said Statement Friday.
Murphy said on August 31 that he was considering taxing high-volume electronic business in the state, home to Wall Street’s large server farm. According to the recently introduced bill, the state would charge a quarter of a percent of “financial transactions” for processing through at least 10,000 electronic processing per year.
Read more: Murphy Envs NJ Trade Tax for Social Justice Agenda
According to its Democratic sponsor, Assemblyman John McCain, the state can collect $ 10 billion annually from taxes on stocks, options, futures and swap trading through New Jersey electronic data centers. Murphy, a Democrat and retired The senior director of Goldman Sachs Group Inc. is in favor of using revenue to expand its social-justice agenda and, according to senior administration officials, sidesteps the state’s fiscal health.
State finances have been slammed by the Kovid-19 epidemic, and New Jersey, one of the most indebted US states, has exposed pension and benefit obligations of more than $ 200 billion.
The finance industry has long been quick to fight the threat of profit from transaction taxes, including one Last year in his presidential campaign was called for by Senator Bernie Sanders. An International Monetary Fund study in 2011 suggested that transaction taxes initially target the finance industry, but eventually companies pass on higher costs to customers.
The Industry Alliance said Friday that New Jersey’s proposed levy would hurt millions of Americans, who invest in financial markets for savings for retirement and for their children’s education. “Our members are committed to ensuring that those savers have access to the lowest cost and most efficient markets in the world.”
NYSE first said on Friday Will operate its Chicago Equity Exchange from a secondary data center from September 28 to October 2. “To reaffirm the industry’s ability to move live trading radically from New Jersey.”
Nasdaq said 26 September trial Will simulate a typical trading day, with Chicago’s data center serving as the primary location for its equity and option matching engines. In notice to customers, both Nasdaq and Cboe emphasized the importance of testing to ensure that markets were ready to move.
UBS Group AG, Cobbe Global Markets Inc., Members Exchange, and TD Ameritred Holding Corp is part of the alliance. Equinix Inc., which runs a data center in New Jersey that outlines the world’s largest and most active stock markets, also joined the group.
(Updates with Nasdaq and Kobe comments in seventh paragraph.)