Plans to launch a bond market for SMEs are in limbo as the Irish Stock Exchange (ISE) tries to persuade the Department of Finance to change the way securities are taxed.
ISE chief executive Deirdre Somers said the exchange is still in negotiations with the Department and the Revenue Commissioners about ending the favourable treatment the tax system gives to government bonds.
"There are some impediments, being honest, to launching a bond market absent of certain tax changes" she said, "but we're continuing to work with them.
"It's fiscal equalisation we're looking for because nobody's going to invest in high-yield debt at a tax disadvantage," Ms Somers added.
"The exchange is a service provider to a market, it isn't the market-former. The market forms based on the attractiveness of the product to the ecosystem that's going to support it, the investment appetite around it and the modalities around that investment.
"So if those three things aren't right, then it doesn't really matter what the exchange does and how lovely the piece of kit we put against it is."
The Government's 2014 Action Plan for Jobs, published in February, commits it to working with the ISE on the plan.
"There is considerable potential to draw on recent experience in other EU Member States and create a more diversified funding environment for Irish SMEs by seeking to connect retail investors to productive investment through the development of a retail "mini-bond" market," the plan reads.
"We will work closely with the Irish Stock Exchange, building on previous engagements to make this a viable funding source for Irish-based enterprises," it adds.