U.S. Markets closed

Eleven EU states to consider narrower transaction tax

An illuminated euro sign is seen in front of the headquarters of the European Central Bank (ECB) in the late evening in Frankfurt January 8, 2013. REUTERS/Kai Pfaffenbach

LONDON (Reuters) - The 11 European Union countries that have pledged to tax financial transactions will consider excluding several key markets from the levy's scope, an EU document showed.

The 11 countries meet on Thursday to review plans for a tax on stock, bond and derivatives trades after conflicting legal opinions on the legality of the original proposal.

The document set out key areas for discussion in order to provide "guidance for further work on the proposal".

The meeting will consider excluding from the scope of the proposed tax framework repurchase agreements after the sector warned that the tax would crimp its ability to help fund the economy.

The meeting will also consider clarifying the definition of primary market transactions - which are already excluded from the levy's scope - to include the issue of money market instruments and units or shares in collective investment undertakings or EU-regulated UCITS mutual funds.

Tighter safeguards to avoid public debt markets being snarled by the tax will also be looked at, the document said.

"Member states are invited to address the need to clarify the above-raised issues and state to what extent they would agree to the suggested lines for clarification," the document added.

(Reporting by Huw Jones, editing by Tommy Wilkes)