FCA Says 21 CFD Firms Closed Since 2025 in Authorisation Crackdown

The Financial Conduct Authority said on 25 September 2026 that 21 Contracts for Difference (CFD) firms have closed since 2025 following its crackdown on the misuse of UK authorisation, and that three other firms are currently cancelling their permissions. The regulator said it was concerned the firms were misusing their authorised status to mislead consumers.

The FCA has been challenging CFD firms that carry out little UK business but use their authorisation as a badge to make linked overseas companies look more trustworthy than they really are. According to the regulator, this creates the misleading impression that consumers are dealing directly with a UK-regulated firm and benefit from UK protections when they do not.

Firms have faced a range of actions, including restrictions on their trading abilities, requirements for independent reviews of their business and the opening of enforcement investigations in the two most serious cases.

Dominic Holland, director of sell-side supervision at the FCA, said in the regulator’s announcement: “Consumers need to know exactly who they’re dealing with and what protections they have. When firms blur the lines between their UK-regulated activities and overseas businesses, we will step in. These closures show we’re prepared to take action to protect consumers.”

The FCA reminded consumers that CFDs are complex products that often involve high levels of leverage, meaning large losses can build up very quickly. It said that before opening an account, consumers should check carefully that they are dealing with a UK-authorised firm if they want the protections that come with FCA regulation, and it directed consumers to its Firm Checker tool. An overseas firm with a very similar name to a UK firm is unlikely to carry UK regulatory protections, the regulator said. Notes accompanying the announcement describe CFDs as complex financial products used to speculate on the movement in prices of a wide range of assets, carrying a considerable risk of substantial losses. The FCA restricted the sale of CFDs to retail customers in 2019, according to those notes.

2024 Strategy Letter Targeted ‘Halo’ Firms

The crackdown follows a supervisory strategy set out in a portfolio letter to chief executives dated 13 December 2024, signed by Mark Francis, interim director of wholesale sell-side, which outlined the FCA’s intended areas of supervisory focus over a two-year cycle.

The letter said around 20% of firms in the CFD portfolio appeared to be conducting little or no activity, and thus were not using their permissions enough to justify continued authorisation. Some of those firms appeared to exist purely to provide an FCA ‘halo’ to wider groups, the letter said, giving false comfort to global retail clients who see the FCA association but contract with an offshore group entity rather than the UK authorised firm, without UK regulatory protection.

The FCA told firms it would continue to invite those conducting no material regulated activity to cancel their permissions and would robustly challenge their future plans where they did not accept the invitation. It said it expected ‘halo’ firms still in the portfolio either to apply to cancel their authorisation or to demonstrate, with a credible business plan containing realistic revenue projections, that they were ready, willing and organised to start meaningful regulated activity. The letter also said the FCA would continue to scrutinise loss-making, largely inactive firms that meet minimum prudential requirements through last-minute injections of funds from controllers, and to consider whether this amounts to renting an FCA ‘halo’.

The letter described a strong gateway on all entry routes into the portfolio, including changes in control, and said that scrutiny had resulted in multiple withdrawals of change-in-control applications on largely inactive ‘halo’ firms. The FCA said it was concerned that potentially unscrupulous actors may seek to acquire a UK firm to give customers of overseas groups false comfort that they are protected by UK regulation, and that it regards a change in control of a regulated firm making little or no use of its permissions as little different to a new authorisation application.

The portfolio covered by the letter consists of firms and groups that predominantly deal with natural persons and generate a significant percentage of total revenue from CFDs, a term the FCA used in the letter to also cover spread bets and rolling spot forex. The letter noted that none of the 100 CFD firms from EEA countries that entered the UK’s temporary permissions regime in January 2021 had obtained permanent authorisation. It said the FCA expected all chief executives of CFD firms to have discussed the letter with their boards by 31 January 2025.

2025 Warning Quantified Retail Protections

In a warning published on 30 October 2025, the FCA said retail client protections, including leverage limits and client loss protections, prevent nearly 400,000 people a year from risking more than their original stake in CFDs and provide between £267 million and £451 million worth of protection. The regulator said it was concerned that firms were using high-pressure techniques to encourage investors to claim they are professional clients, putting them at risk of losing more money than they can afford.

The same warning said investors were being targeted by finfluencers who may not make clear that they are promoting unregulated firms operating offshore, and that over 90,000 people had lost around £75 million over a four-year period in this way at just one firm. Notes to the warning said some firms were promoting retail clients to elective professional categorisation, under which clients’ funds may be moved out of segregated client money accounts, exposing clients to greater risk of loss in the event of firm failure, while others were redirecting retail clients to associated CFD providers in third-country jurisdictions without equivalent consumer protections. In June 2025, the FCA led an international crackdown on illegal finfluencers that resulted in 3 arrests, 7 cease and desist letters and 50 warning alerts, according to the warning’s notes.

Mark Francis, director of sell-side markets at the FCA, said in the October 2025 warning: “CFDs are complex, high-risk products. The protections given to retail investors under our rules save UK consumers millions each year.”

In that warning, the FCA said firms must not push elective professional or redirection promotions onto their retail clients and that it would take action against firms breaking the rules. It also said at the time that it would launch a consultation around client categorisation in the coming months, to ensure the right protections apply for the consumers who need them and to create more freedom for professional investors who do not.