From a legal standpoint, is a spot forex transaction initiated at a FX dealer a CFD (Contract for Difference) whereby the gain or loss is paid/debited by the FX dealer in your account ? Some firms like CMC markets refer to Forex CFD 's while others make no mention of CFD . Technically it seems to me it's a CFD as no actual physical transaction ever takes place (positions are rolled over).
I just called two firms in the UK, one offering "Forex CFD's" and neither could tell me the difference between FX and CFD 's, or whether FX trades were actually CFD 's.
Common terminology is that FX is currencies and CFD is non currencies. I think that it is better not to consider an FX transaction to be a CFD because delivery is contemplated, even if it is never actually performed. There are special tax advantages to FX contracts in some jurisdictions (e.g. the U.S.) that would not apply if it were regarded as a CFD. In the U.S., people have argued that FX contracts should be regarded as eligible for these advantages regardless of whether the dealer actually executes the contract in the Interbank market, or not.
OK I just did some reading on NDF's and it seems to me a spot FX transaction at a "FX dealer" (not a bank) is very much a NDF, non deliverable forward for immediate delivery (T+2) , and NDF's are essentially contracts to exchange gains or losses just like CFD's.
Different parts of the world classify them in their own way. Here in Canada (Ontario) spot falls under the 'securities' label. In Australia, they are CFDs. In the US, recent changes make them out to be swaps. Spot forex is a bit special in this respect. I suppose regulators find it hard to define (as their designation also indicates which bureaucratic body is in charge of them.)