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| Section 871(m) of the [[Internal Revenue Code]] clamps down on foreigners avoiding [[withholding tax]] for dividends on US [[Share - Equity Derivatives Provision|equities]].
| | {{nman|isda|2002|871(m) amendment}} |
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| The new regulations will establish up to a 30% [[withholding tax]] on foreign investors on dividend-equivalent payments under [[equity derivative|equity derivatives]]. There are a wide range of products that fall into this camp including [[swap]]s, [[option]]s, [[future]]s, [[convertible bond|convertible debt]], [[structured note|structured notes]] and other customised derivative where the ...
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| ===Beware of {{tag|Greeks}}===
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| ... [[delta]] (see what I did there?) against the underlying stock is .08 or greater. (Pro tip: a delta of 1 gives a one-for-one correlation with the delta on the [[underlying]]. A delta of -1.0 does the exact opposite of what the underlyer is doing. a delta of 0 means the two products are correlated at random).
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| The calculation is cumulative so even if the delta threshold isn’t met in one transaction, it may be as a result a connected transaction.
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| It applies from 1 January 2017.
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| {{c|tax}}
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