This question may seem inappropriate for this StackExchange but it's the pricing and actual return dynamics that define the instrument so you guys seem the most knowledgeable on this topic.
I was reviewing the different groups of the Classification of Financial Instruments codes (CFI, norm ISO 10962:2015) and struggled to identify how a currency pair position held with a retail foreign exchange broker should be classified.
It is definitely not a spot transaction since the notional amount of the lot is never actually settled.
Is it then an "Entitlement" >> "Mini-future certificates/constant leverage certificates [RF]" ? It is defined on Nasdaq website as
"A leverage certificate is a certificate issued by a bank or financial institution. The leverage certificate reflects the change in the value of the underlying assets with leverage. The underlying asset can be, for example, a share, a bond, a commodity, a currency or a combination of different underlying assets. Leverage certificates usually have a long maturity with constant leverage that is rebalanced on a daily basis. Leverage certificates give the possibility of returns in rising markets (referred to as Bull) and falling market (referred to as Bear)"
It looks pretty similar to what a leveraged position on a currency pair is but I have the feeling that constant leverage certificates are really specific instruments that do not cover the case I'm mentioning.
Or is it a CFD? But retail brokers generally make a distinction between CFDs and currency pairs in their product offering... It is classified in the CFI standard under "Forward", "Foreign exchange", Attribute 3 "Return or payout trigger": CFD
It could be a spread bet, defined on Investopedia as
Spread betting is a derivative strategy, in which participants do not own the underlying asset they bet on, such as a stock or commodity. Rather, spread bettors simply speculate on whether the asset's price will rise or fall, using the prices offered to them by a broker.
It is classified in the CFI standard under "Forward", "Foreign exchange", Attribute 3 "Return or payout trigger": Spread-bet
This classification may seem the most accurate but why does it fall under the "Forward" category?
Thanks a lot for your help :)