Retail brokers concerned about capital hit to CFDs
Rising capital requirements in the fourth Capital Requirements Directive (CRD IV) – the European Union's transposed version of the Basel III standards – are posing a threat to the future of the contracts for difference (CFD) market, according to retail foreign exchange brokers.
CRD IV is expected to come into effect at the start of 2014, and it is the directive's charge for the credit valuation adjustment (CVA) that could prove particularly disruptive to the CFD market. The CVA calculation
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