Twenty-one Contracts for Differences (CFD) firms have closed since 2025 following action by the FCA, while three additional firms are currently cancelling their regulatory permissions.

FCA Targets Misuse of UK Authorisation

The FCA was concerned that the firms were misusing their UK-authorised status to mislead consumers about the nature of their businesses and the protections available to them.

The FCA has been challenging CFD firms that conduct little business in the UK but use their UK authorisation as a badge of credibility for linked overseas companies.

This can create the misleading impression that consumers are dealing directly with a UK-regulated firm and benefit from UK regulatory protections when they may not.

Regulatory Action Against CFD Firms

The FCA has taken a range of actions against firms identified as presenting these risks.

These actions have included restricting firms’ trading activities, requiring independent reviews of their businesses and opening enforcement investigations in the two most serious cases.

As a result of the FCA’s intervention, 21 CFD firms have closed since 2025, while three other firms are currently in the process of cancelling their permissions.

FCA Warning to Consumers

Dominic Holland, Director of Sell-Side Supervision at the FCA, said consumers need to understand exactly who they are dealing with and what protections are available to them.

He added that the FCA will intervene when firms blur the distinction between their UK-regulated activities and overseas businesses.

Risks of Trading CFDs

Consumers considering trading CFDs should be aware that these products are complex and often involve high levels of leverage. This means that significant losses can build up very quickly.

Before opening an account, consumers should carefully check that they are dealing with a UK-authorised firm if they want the protections associated with FCA regulation.