Market Pilots Spot Derivative In Bid To Tackle Settlement Risk

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LONDON--Ten of the market's leading interbank players will begin piloting a new spot and forward derivative instrument this month, which is aimed at cutting settlement risk.

The pilot of the new contract for difference (CFD) is expected to last two or three months, leading to a report for further industry comment, according to Simon Hills, assistant director at the British Bankers' Association (BBA) in London.

In effect, CFDs work much like non-deliverable forward contracts, as a deal for net

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