FCA Warns CFD Brokers After Review Finds “Little Change” Under Consumer Duty

Britain's Financial Conduct Authority (FCA) has signalled a tougher stance toward contracts-for-difference (CFD) brokers after a multi-firm review reported "little or no change" in how some providers have adjusted their products or pricing since the Consumer Duty took effect in 2023.

According to the regulator, several firms failed to incorporate client feedback or complaint data when evaluating whether their pricing delivered fair value. The FCA also highlighted instances where overnight funding charges were applied without clear justification or disclosure, adding costs that offered 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 sell-side markets.

The review pointed to significant disparities in overnight funding charges — a core revenue stream for brokers — and noted cases where fees were applied to both sides of hedged positions, increasing costs despite limited net exposure. While some firms strengthened governance processes, others were described as "slow to respond" or reliant on outdated pricing models.

Under the Consumer Duty, brokers must demonstrate how their spreads, commissions, and funding rates align with service levels and customer outcomes. The FCA said it will begin supervisory interventions and warned that enforcement action may follow where shortcomings persist.

The update comes against a backdrop of continued concern over retail trading risks. CFDs and spread bets have been subject to leverage caps and margin protections since 2019, yet the FCA's findings indicate uneven progress in meeting the Duty's fair-value requirements. The regulator also reiterated warnings about brokers encouraging traders to reclassify as professional clients to access higher leverage — a move that removes key protections.

The FCA plans to monitor firms through 2026 as part of its broader retail-investment oversight, emphasising that customer experience — rather than profitability — will guide its assessment of compliance.