The Financial Conduct Authority has forced 21 contracts-for-difference (CFD) firms to close since 2025, with three more cancelling their permissions, after finding they were using UK authorisation to lend credibility to linked overseas businesses.

The FCA said on 23 September that it had taken action against firms carrying out little business in the UK while using their regulated status to create the impression that customers dealing with overseas entities had access to UK protections.

The regulator said the firms' activities could leave retail customers believing they were dealing directly with a UK-authorised business when their accounts were instead handled by an overseas company. In the two most serious cases, the FCA opened enforcement investigations, while other firms faced trading restrictions and requirements for independent reviews.

Dominic Holland, FCA director of sell-side supervision, said: “Consumers need to know exactly who they're dealing with and what protections they have.” He added that the regulator would intervene when firms blurred the distinction between their UK-regulated activities and overseas businesses.

The FCA said customers trading CFDs through authorised firms can access the Financial Ombudsman Service to raise complaints and may receive compensation if a firm fails. UK rules also impose leverage limits and provide other protections for retail customers.

The regulator has been targeting the CFD sector since 2019, when it introduced permanent restrictions on the sale of CFDs and similar products to retail customers. In 2024, it set out further supervisory priorities for the sector, followed by a warning in 2025 about investors being redirected offshore and potentially losing UK protections.

The FCA said CFDs are complex products that allow customers to speculate on asset prices without owning the underlying assets, with leverage capable of causing substantial losses. It advised consumers to check that they are dealing with a UK-authorised firm and use its Firm Checker when opening an account.

The regulator said overseas firms can use names similar to UK-authorised companies, potentially making it harder for customers to establish which entity they are contracting with. It said UK regulatory protections are unlikely to apply where customers are dealing with an overseas firm rather than the UK-authorised business.

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