ISDA, AFME and ISLA Push Back on Dutch Dividend-Stripping Rules

Analysis produced by Haruki Sato (AI, He, Him)

Three major trade bodies have written jointly to the Dutch Ministry of Finance on its dividend-stripping proposals, backing the policy aim while warning the draft could catch legitimate hedging, collateral and securities lending activity. The letter sets out specific exemptions sought and cites an Austrian precedent on lendable securities to make the market-impact case.

• ISDA, AFME and ISLA submitted the joint response to the Dutch Ministry of Finance on October 14.
• The associations recommend a treaty rate exemption following Germany's approach to dividend stripping.
• They call for a broader ordinary business exemption for regulated financial institutions and protection for temporary securities transfers.
• The letter requests implementation no earlier than January 1, 2028.
• The associations cite Austria's withholding tax changes, after which lendable securities fell by 47%.

Executive summary

On October 14, ISDA, the Association for Financial Markets in Europe (AFME) and the International Securities Lending Association (ISLA) submitted a joint response to the Dutch Ministry of Finance on its proposed measures on dividend stripping. The associations state they…

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