HC Deb 12 April 1994 vol 241 cc44-5W
Mr. Cousins

To ask the Chancellor of the Exchequer if he will estimate the tax revenues obtained from the derivatives and swaps markets in the United Kingdom; how those revenues are obtained; and whether he has the taxation of such markets under review.

Mr. Dorrell

It is not possible to attribute amounts of tax to specific types of income or gain because tax is charged on each business's total profits, including income and capital gains.

Proposals to reform the tax treatment of financial instruments used by companies for managing interest rate and currency risk were announced in the Budget in November and are included in the present Finance Bill. These proposals will replace the current complex rules with a simple and coherent regime for taxing the profits and losses associated with these instruments.

Mr. Cousins

To ask the Chancellor of the Exchequer what steps he is taking to review the need for regulation of markets in derivatives and swaps; and what steps he has taken to discuss these issues with the Government of the United States of America or with bank and securities regulators both in Britain and the United States of America.

Mr. Nelson

Regulation of markets in derivatives and of institutions involved in derivatives trading in the United Kingdom is the responsibility of the Securities and Investments Board and other bodies recognised under the Financial Services Act 1986, and of the Bank of England and the Building Societies Commission. Representatives of the United Kingdom authorities regularly meet and discuss derivatives trading with their counterparts from other countries, including the United States, in fora such as the Basle Committee on Banking Supervision and the International Organisation of Securities Commissions, as well as on a bilateral basis as appropriate. In addition, the Securities and Investments Board recently agreed, with the United States Securities and Exchange Commission and the Commodity Futures Trading Commission, a coordinated approach to the regulation of over-the-counter derivatives.