FCA Warns CFD Providers Over Poor Fair-Value Practices, Unjustified Charges
Regulator Finds “Little Change” Despite New Standards
Britain’s Financial Conduct Authority said it will take action against contracts-for-difference (CFD) providers that still fail to deliver fair value to customers, two years later than the Consumer Duty rules came into force. A multi-firm review found several brokers had made “little or no change” to their products or pricing since 2023.
The Consumer Duty requires firms to prove that their products offer fair value, communicate clahead, and serve customers’ interests. According to the FCA, some CFD firms did not use client feedback or complaint data when assessing whether their pricing was reasonable. Others imposed overnight funding charges that lacked justification or disclosure, adding costs that, in the regulator’s view, gave customers “little benefit.”
“The Consumer Duty raises the bar for consumer protection across financial services, and CFD providers must meet those standards,” said Mark Francis, the FCA’s director of trade-side markets.
Investor Takeaway
Persistent Gaps in Pricing and Oversight
remain among the riskiest retail products in Britain. The FCA capped leverage and imposed margin-close out and negative-balance rules in 2019 to limit losses among inexperienced traders. Yet the latest review shows parts of the industry still haven’t adapted to the Duty’s fair-value test. The FCA noted wide differences in overnight funding charges — a key source of revenue — and said some firms charged fees on both sides of hedged positions, increasing costs even when traders’ net exposure was minimal.
CFD brokers manufacture and distribute over-the-counter derivatives, setting their own spreads, commissions, and funding rates. Under the Duty, they must now document how these charges align with the level of service offered and justify them through evidence-based assessments. The FCA said that while some providers had improved governance, others were “sluggish to respond” or relied on outdated pricing models.
The regulator did not name individual firms but said it will begin supervisory interventions and warned that enforcement could follow where deficiencies persist.
Background: Rules Designed to Protect Retail Traders
The FCA introduced the Consumer Duty in July 2023 to shift its focus from compliance checklists to customer outcomes. The Duty requires firms to test and prove that products represent fair value. It also compels management teams to include consumer metrics in board reporting and to take remedial action when clients experience poor results.
Thursday’s update shows how the regulator is using the Duty to tighten oversight in face steep losses. In October 2024, the FCA warned traders not to allow brokers to classify them as professional clients to gain access to higher leverage — a tactic that strips away key protections. The agency said it is now examining how promote these reclassifications and will publish further guidance on client categorisation in the coming weeks.
Investor Takeaway
Industry Faces Mounting Pressure
For the , the FCA’s warning underlines that CFDs remain under the microscope. Providers are expected to show clear value evidence and ensure transparent disclosures on fees. While many brokers have already adjusted to rules, the Duty adds another layer of oversight linking pricing to consumer outcomes.
The latest findings show that the regulator’s patience is wearing thin. With enforcement powers strengthened under the Duty, the FCA could demand compensation or impose restrictions on firms that continue to breach fair-value principles. For smaller brokers relying heavily on overnight funding income, the crackdown could pressure margins and accelerate consolidation in the sector.
The FCA said it will continue to monitor firms’ approaches through 2026 as part of its broader review of retail investment conduct. It also reiterated that customer experience — not simply profitability — will define whether firms meet regulatory expectations.
