Finance
UK regulator warns CFD firms against failing consumers
Published by Global Banking & Finance Review®
Posted on November 13, 2025
2 min readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on November 13, 2025
2 min readLast updated: January 21, 2026
The FCA warns CFD providers to comply with Consumer Duty standards, ensuring fair value and addressing consumer complaints.
LONDON (Reuters) -Britain's Financial Conduct Authority will take action against contracts for difference (CFD) providers that fail to provide fair value to consumers, two years after introducing stricter protection rules, the regulator said on Thursday.
After a review, the FCA said some providers of CFDs - risky and complex financial products used to bet on the price of a share or asset without owning it - had made little or no change to products or services since the Consumer Duty imposed stricter standards in 2023.
Some did not take consumer complaints or satisfaction into account as part of fair value assessments, and applied overnight funding charges without clear justification and adequate disclosure with little benefit to consumers, it added.
"The Consumer Duty raises the bar for consumer protection across financial services, and CFD providers must meet those standards," Mark Francis, director of sell-side markets at the FCA, said after a review.
CFD providers manufacture over-the-counter derivatives and sell them directly to investors, allowing them to decide the overall price paid by retail traders.
The FCA restricted retail CFD sales in 2019 and warned investors in October against bowing to pressure from firms to claim they were professional clients, which raises leverage limits and risks client loss protections.
The Consumer Duty requires firms to put their customers first by ensuring communications can be understood, and products and services meet their needs and offer fair value.
(Reporting by Kirstin Ridley in London, Yamini Kalia in Bengaluru; Editing by Shailesh Kuber and Jan Harvey)
A Contract for Difference (CFD) is a financial derivative that allows traders to speculate on the price movement of assets without owning the underlying asset.
The Financial Conduct Authority (FCA) is a regulatory body in the UK that oversees financial markets and firms to ensure consumer protection and maintain market integrity.
Consumer Duty refers to regulations that require financial firms to prioritize consumer interests, ensuring products and services are suitable and provide fair value.
Overnight funding charges are fees applied to positions held overnight in trading, often related to the cost of borrowing funds to maintain those positions.
Fair value refers to the estimated worth of a financial asset or liability, based on current market conditions and the expected future cash flows.
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