Cum-Ex Investigations

‘Cum-Ex’ is the description given to a method of trading certain types of shares around the dividend record date which allows more than one participant to claim a tax rebate in respect of the same dividend payment.

Prevalent in Germany but also other EU countries such as Denmark, Belgium, and France, the scheme has been the subject of much debate since the issue came to the attention of the mainstream media. The loss to the German tax authorities alone as a consequence of Cum-Ex trading is said to be in excess of €55 billion and the scale of this alleged loss and the cross-border nature of the trading chains means that there are now many regulatory and criminal investigations being undertaken across Europe. German prosecutors have charged numerous individuals with tax evasion and in March two former London-based investment bankers were convicted in the first ever criminal trial for Cum-Ex trading.

The UK’s Financial Conduct Authority (the FCA) has also confirmed that it is investigating a number of financial institutions and individuals over conduct in London’s financial markets which may have supported Cum-Ex trades executed in other EU countries.