The European Securities and Markets Authority (ESMA) has launched a consultation on the methodology for calculating market capitalisation and market capitalisation ratios required under the Directive on faster and safer relief of excess withholding taxes (FASTER Directive). The ratios will be used to determine which EU Member States fall under specific withholding tax relief requirements when their market capitalisation exceeds 1.5% of total EU market capitalisation for four consecutive years, and will underpin ESMA’s obligation to publish the relevant annual figures from 2026. The proposed approach is designed to be transparent and consistent, and is aligned with existing transparency frameworks by relying on transaction data reported under the Regulation on markets in financial instruments (MiFIR). It sets out how share prices would be computed, how market capitalisation would be calculated at instrument and company levels, and how results would be aggregated to derive each Member State’s market capitalisation ratio. Feedback is due by 25 July 2025. ESMA expects to publish a Final Report and submit draft regulatory technical standards to the European Commission for adoption in October 2025.
European Securities and Markets Authority 2025-06-19
European Securities and Markets Authority consults on methodology to calculate Member State market capitalisation ratios under the FASTER Directive
The European Securities and Markets Authority (ESMA) has initiated a consultation on the methodology for calculating market capitalisation and ratios under the FASTER Directive. This will determine which EU Member States are subject to withholding tax relief requirements based on their market capitalisation exceeding 1.5% of total EU market capitalisation for four consecutive years. The approach aligns with existing transparency frameworks and relies on transaction data reported under MiFIR.