Scrapping stamp duty on shares would help improve market efficiency and bolster the health of London’s capital markets, the boss of Plus500 has said after a jump in customers’ deposit sizes helped the trading platform beat analyst expectations.
David Zruia told City AM that trading volumes would invariably go up if the Chancellor heeded growing calls from City figures to scrap the 0.5 per cent surcharge levied on all transactions on London-listed shares.
“The audience know what they’re after,” he said in an interview shortly after the FTSE 250 constituent released its third quarter results. “So it would mean something [positive] for market efficiency.”
The government is reportedly mulling introducing a stamp duty holiday for all new listings on the London Stock Exchange in a move it hopes will bolster liquidity and volumes and incentivise firms to list in the UK capital.
One option officials are said to be exploring is an exemption of two or three years from the tax, which is among the highest of any major stock market, leading critics to argue it disincentivises investors from buying UK-listed companies versus US counterparts.
Several leading City figures and economists – including Tax Policy Associates’ Dan Neidle and Peel Hunt head of research Charles Hall have urged the Chancellor to go further and do away with the levy completely.
‘FOMO’ trading helping Plus500
Zruia made the remarks after Plus500 revealed it had achieved a “very strong” first nine months of trading, boosted by rapid uptake of its US futures arm, higher customer deposit sizes and increased client loyalty.
Revenue at the London-listed platform grew two per cent to $597.8m (£445.3m), while customer income increased eight per cent to $536.7m.
Zruia added the group also benefited from an uptick in FOMO-style investing, where several high-profile bull runs in US tech stocks, cryptocurrency and gold, attracted heightened retail investor interest.
“You can see over the years that every time there is any period of FOMO – any time of new, popular trend – Plus500 was able to cater to that,” he said. “And we [benefit] from this volatility and from these buzzes.”