Modern Markets Initiative Issues New Report on the Economic Impact of a Financial Transaction Tax


Modern Markets Initiative (MMI), the leading advocacy organization for financial technology companies and quantitative trading firms seeking to promote responsible innovation across markets, today released its new report on the economic impact of The Inclusive Prosperity Act of 2017s proposed financial transaction tax (FTT). Our report, The Hidden Costs of a Financial Transaction Tax, largely focuses on how the potential tax would impact pension funds. A full version can be downloaded or reviewed here:

MMIs analysis makes clear that any transaction tax on institutions trading large volumes of securities would dramatically harm pension funds and other institutional investors that directly represent the financial interests of countless American workers. The FTT that has been recently championed by certain policymakers, including Senator Bernie Sanders (I-VT), would produce startling costs for pension plans, including:

  • New York City and California employee pension funds could owe approximately $1 billion and $500 million, respectively, in yearly FTT fees;
  • The Federal Thrift Savings Plan would be hit with roughly $250 million in annual fees, and;
  • A hypothetical local public pension fund portfolio with $2 billion in assets would be on the hook for an additional $4 million in an average year.

Our detailed analysis shows that the FTTs negative impact on pensions and institutional investors would be substantial in terms of real dollars, said MMI CEO Kirsten Wegner. Policymakers must now consider how any FTT would ultimately boomerang back on individual investors and pensioners, essentially cutting into their retirement income and savings. The numbers prove that Senator Sanders FTT is a non-starter.

The report goes into detail to transparently lay out how MMI came up with its economic impact projections. For each pension fund evaluated in the report, analysts have provided detail on the asset class exposure, calculation methods, spread costs and other considerations related to that institution.

Ms. Wegner added: One of MMIs key principles is transparency, so it was very important for us to share our full analysis with the public. We fully intend to be the industrys voice when it comes to education and pushing back on the FTT.

For more information about our new report and MMIs efforts to promote the Best Markets Ever, visit

About Modern Markets Initiative

Modern Markets Initiative (MMI) is the leading advocacy organization for financial technology companies and quantitative trading firms that support efficiency, innovation, and effective oversight across markets. Our mission is to build bridges between MMIs members and regulators, legislators, academics, and other policy experts to ensure we are all working to build the Best Markets Ever. Based in Washington, D.C., MMI was founded by industry leaders “ Global Trading Systems, Hudson River Trading, Quantlab Financial and Tower Research Capital “ who believe sound markets should be a bedrock of secure savings and retirements for all Americans.