FCA Finds Only 12% of CFD Firms Changed Charges After Review

The Financial Conduct Authority (FCA) has found that only 12% of CFD firms changed any charges after its multi-firm review, with most firms instead explaining their existing rates. The regulator surveyed 81 CFD firms in May 2026, six months after its November 2025 review, and published its findings on 15 October.

Overnight financing fees remain a top concern for the FCA. The regulator said some firms changed or planned to change their calculation "to recognise that overnight financing is currently charged on total notional, with no interest paid on the initial margin posted by clients."

How Overnight Financing Works

Overnight financing is a daily fee on positions held past the broker's cut-off. It comprises a benchmark interest rate plus or minus the broker's mark-up, charged on the full notional value of the position rather than the margin posted. The FCA says charge levels are at a firm's discretion and that mark-ups remain "largely opaque."

IG's UK charges page lists a CFD admin fee of 1% for FX and 3% for other asset classes, charged on positions held past 10pm UK time. Its formula is: number of contracts × value per contract × price × (admin fee ± SONIA) ÷ 365. A 360-day divisor applies outside sterling, Singapore dollar and rand markets, and three days' funding is charged on positions held through Friday night. CMC Markets uses the same basic formula with SONIA as the sterling benchmark.

A long position pays the benchmark plus the mark-up, while a short position receives the benchmark minus the mark-up, which becomes a charge when the mark-up exceeds the benchmark. CMC notes that sell positions in share CFDs are credited unless the interbank rate is at or below its add-on, in which case they "may incur a holding cost charge." CMC prices FX holding rates using the pair's tom-next rate, and both CMC and IG build commodity charges from the gap between futures prices with their own fee on top.

Leverage and Hedged Positions

Because a CFD gives exposure to the full value of the underlying, financing runs on the full value. The FCA's November review said disclosures could be clearer about "charges being applied on the full consideration the CFD gives the client exposure to with no offset against the funds held on the client's account," and highlighted the effect of leverage on the size of the charge relative to the client's own funds. The review also found that most firms had considered paying interest on CFD account balances and decided not to.

For a hedged pair, CMC states: "holding costs are still charged on both sides regardless of your netting status." The FCA found the same at most surveyed firms, many of which call it an administration charge and apply "the same full funding charge spread" as on a genuine long or short. The regulator is particularly concerned about firms that encourage matched positions with reduced or waived margin, and wants clients shown the pros and cons compared with simply closing the trade.

FCA Findings and Expectations

The 12% of firms that reported changes listed four types of actions taken or planned: paying interest on cash balances, cutting financing charges on matched or hedged positions, cutting charges on outlier product groups after peer comparisons, and changing the calculation to recognise that clients earn nothing on their margin. The list includes planned changes, so the 12% reflects intent as well as action. The FCA said the changes were "often designed to show that they have complied with the Duty, rather than materially changing their offering."

The regulator's good-practice list includes dedicated fee pages, pop-ups and deal-ticket information explaining how charges are calculated, beyond terms and conditions and key information documents. Only a minority of firms have added an annual rate, and the FCA asks firms to consider whether outlier rates are compatible with fair value. There is no deadline and no new rule; the FCA said it will follow up with individual firms where it has concerns.

The same week, the FCA flagged surveillance gaps at seven retail brokers and said it would review appropriateness tests.