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Jan Karol Szczepanski
Intertax
Volume 46, Issue 10 (2018) pp. 766 – 793
https://doi.org/10.54648/taxi2018083
Abstract
This article attempts to analyse, from the evolutionary perspective, the dual system of OECD Model Tax Conventions that arguably came into existence as a result of a tax policy choice that was introduced from the very beginning of works on bilateral model solutions concerning the elimination of international juridical double taxation. So far, this duality has attracted little attention in the literature despite its theoretical importance. This article attempts to fill in this research lacuna. The presented analysis is also important to consider a much needed shift in the tax policy of the OECD towards taxes on gratuitous wealth transfers mortis causa and inter vivos.
Extract
Over the past decades, financial markets have been fundamentally transformed by technological advances in combination with regulatory and institutional change. This has produced highly competitive and fragmented financial markets. It is in this market environment that the ultra-fast segment of high-frequency trading (HFT) has materialised. European regulators have addressed the potential adverse market impact of HFT in terms of increased systemic risk (e.g. ‘flash crashes’) and market abuse through provisions in MiFID II and in the MAR. But there is also an additional concern that so far has received less regulatory attention – the question of whether HFT is fair. This article explores whether and how HFT raises fairness-related concerns against the backdrop of the overarching policy goal of maintaining confidence in the financial markets. Finding that HFT does indeed raise such concerns, it then asks whether the newly instituted provisions on algorithmic trading and HFT in MiFID II and MAR do anything to alleviate this problem. The answer is to a certain extent yes. However, significant concerns remain unaddressed by the new regulatory context. The article suggests other provisions in MiFID II that in the author’s view should be assessed with a view to target fairness-related concerns raised by HFT.