Deutsche Bank and iShares are soon to list a whole range of ETFs on the Madrid Stock Exchange, after Spanish regulation changes have opened the way for certain fund structures to be tax efficient.
Deutsche has already registered around 100 ETFs for public distribution and plans to initially cross-list around ten to 15 of its flagship db x-trackers, before the end of the year.
iShares has registered 74 ETFs for listing. BlackRock head of business in Spain, Armanda Senra, says: "Registering these sub-funds demonstrates our commitment to the Spanish market and our clients."
Deutsche Bank head of db x-trackers UK Manooj Mistry says prior to the regulation changes made in summer, only ETFs with an FCP structure or a unitised structure were able to be listed on exchange, without incurring withholding tax.
Consequently, any ETFs structured as a Sicav or an open ended investment company (Oeic) were not able to be listed without having a tax disadvantage.
Mistry says Spain allowed ETFs to be listed for the first time four years ago. However, when drafting the rules, they only allowed for withholding tax exemptions in relation to FCPs, and not Sicavs or Oeics.
Most of the Irish-domiciled funds tend to be structured as Oeics, whereas in continental Europe, vehicles domiciled in Luxembourg or France are usually structured as either FCPs or Sicavs, says Mistry.
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