On July 22, the European Commission answered the question on whether a rolling spot Foreign Exchange on margin takes the form of a derivative contract or a contract for difference to be considered a financial instrument under the Markets in Financial Instruments Directive (MiFID).

The European Commission confirmed in its answer that a rolling spot FX contract can be indefinitely renewed, and no currency is actually delivered until a party affirmatively closes out its position, which exposes both parties to fluctuations in the underlying currencies.  Hence, rolling spot foreign exchange contracts are a type of derivative contract relating to currencies and are considered financial instruments as defined under MiFID.  Answer.