Growing demand for CFDs reports that buy-side firms are turning to equity derivatives, a trend that is likely to grow when the Financial Transaction Tax is in place:

Craft believes institutional investors are increasingly looking to trade CFDs, which offer the same benefits of holding equities, without the need to own them.

Under FTT, derivatives attract a lower tax levy:

Craft said the swap portfolio rules under EMIR and the current outline of the European FTT meant CFDs would offer asset managers tax efficiencies for trading the synthetic rather than the stock.

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