On March 3, the UK Financial Services Authority (FSA) published a feedback statement and final rules on the disclosure of long positions held as Contracts for Difference (CFDs). This follows from its consultation paper CP08/17 on the disclosure of CFDs published in October 2008, as reported in the October 24, 2008, edition of Corporate and Financial Weekly Digest. As foreshadowed by CP08/17, the FSA will implement a general disclosure regime for long CFD positions. The initial disclosure threshold will be at 3%, in line with the existing UK disclosure rules for long positions in equities. Further disclosures are required as each 1% threshold is passed thereafter. Again the same as the long equities disclosure regime.
Under the new CFD rules, position size is to be calculated on a delta-adjusted basis rather than a nominal basis. There is an exemption to the disclosure requirements for CFD writers which act as regulated intermediaries. The FSA has introduced this in order to reduce unnecessary disclosures. Exemptions paralleling those for market makers and trading book in the equity disclosure regime are also implemented. The new rules take effect on June 1, 2009.