FCA Crackdown Shuts Down 21 CFD Firms Over Overseas Links and Misleading Practices
FCA Actions and Impact on CFD Firms
LONDON, Sept 25 (Reuters) - Britain's Financial Conduct Authority said on Friday that 21 firms offering CFDs had closed since 2025, three others were cancelling their regulatory permissions to trade and two face investigation after a crackdown on misleading customers.
Background on CFD Firms and Regulatory Crackdown
The regulator did not name the firms offering contracts-for-differences, which are complex financial products used to bet on the price of a wide range of assets without owning them. The FCA has been cracking down on CFD providers since it restricted their sale to retail customers in 2019.
Overseas Links and Misleading Practices
It said CFD firms that do little business in Britain, but use their authorisation to lend credibility to linked overseas businesses, led people to think they were dealing directly with a UK-regulated firm and would benefit from UK protections.
FCA Statement on Consumer Protection
"Consumers need to know exactly who they're dealing with and what protections they have," Dominic Holland, the FCA's director of sell-side supervision, said in a statement.
"When firms blur the lines between their UK-regulated activities and overseas businesses, we will step in," he added.
Protections for Retail Customers
Retail customers who trade CFDs through FCA-authorised firms can access the Financial Ombudsman Service to raise complaints, receive potential compensation in the event of firm failures, have limits placed on leverage and a range of other protections.
Reporting and Editorial Information
(Reporting by Kirstin Ridley; Editing by Alexander Smith)
