Overview

A Contract for Differences (CFD) is an agreement between two parties to exchange the change in price on a given number of shares at the end of the contract. Most CFDs are nearly identical to Total Return Swaps (TRS), where market value is equal to URGL and there is a financing component that moves in the opposite direction. Like TRS, CFDs are always settled in cash as there is no delivery or receipt of the underlying asset.

Eagle Accounting has core support for CFDs using the native TRS functionality. This document highlights the key features of CFDs. Refer to Total Return Swaps (TRS) Best PracticesPreview for general information on TRS functionality.

Reference Data

Market Data

Spread Changes (V17 R2)

Some CFDs have floating rate spreads that change periodically throughout the life of the deal. Eagle supports this with Time Sensitive functionality as detailed in Time Sensitive Processing NotesPreview.

Separate Valuation & Reset Prices (V17 R2.49)

Some clients who trade CFDs have a requirement to use fair value prices for daily valuation, while still using market prices for reset processing. Refer to TRS Separate Reset & Valuation Prices Processing NotesPreview for full configuration details.

Security Data

• Security Type (82) & Sub Security Type (1464) can be used to different CFDs from other flavors of TRS

  • These fields are driven by the SECURITY TYPE and SUB SEC TYPE Code Categories respectively

• Notional Reset Type (4409) = Recalc Notional (R)

Accounting

Corporate Actions

Common corporate actions can be automated for CFDs. Refer to TRS Corporate Actions Processing NotesPreview for full configuration details.