The European Commission has signalled that it is prepared to support some changes in proposals for an EU Financial Transaction Tax (FTT) to avoid penalising pension funds and SMEs and to encourage faster progress towards adoption.

A group of 11 member states is currently considering the introduction of the FTT at some point next year. In a debate yesterday in the European Parliament, Algirdas Semeta, the EU's commissioner in charge of tax policy, indicated for the first time that he was prepared to consider a scaling back of the scope of the tax, which will apply to stocks, bonds and derivatives.

In his speech Semeta said: 'The Commission is ready to examine the suggestions made for an initial introduction of the tax with lower rates for products of specific market segments.'

Semeta also said they had 'heard the message' from non-financial companies and would be open to examining ways to avoid SMEs being 'unduly categorised as financial institutions'.

His remarks are seen as designed to help break the current impasse over the introduction of FTT, which was originally scheduled for 1 January 2014 but is now subject to delay. The original plans were for a 0.1% tax on shares, bonds and derivatives, but the most recent discussion in the European Parliament indicated that these rates could be lowered to 0.05% on sovereign bonds and pension funds until 1 January 2017 and 0.005% for derivatives.

In a statement, Semeta said his overriding message was that there should be no further delay by member states, which he said was increasing levels of uncertainty and speculation.

'It is time for the 11 member states to converge on the FTT to be implemented, while also protecting the spirit and purpose of this tax,' Semeta said.