21 CFD firms close after FCA crackdown on UK authorisation misuse

The Financial Conduct Authority (FCA) said on 25 September 2026 that 21 contracts for difference (CFD) firms have closed since 2025 following its scrutiny of the sector, with three more currently cancelling their permissions. The regulator's concern was not simply weak trading conduct. It was that firms doing little UK business were using their FCA authorisation to make linked overseas companies look more trustworthy than their regulatory status justified.

For UK consumers who trade CFDs, or who are considering it, the announcement matters because it exposes a gap between what a brand looks like and what a customer is legally entitled to. A UK-authorised name attached to a website does not automatically mean the entity taking a customer's money and executing their trades is the one the FCA has approved.

The FCA has not named the 21 closed firms, the three cancelling permissions, or the two firms it is investigating under enforcement powers, which it described as the most serious cases.

What the FCA found

According to the FCA, some CFD firms carried out little genuine UK business but retained their authorisation and used it to lend credibility to associated overseas companies. The regulator said this could leave consumers believing they were dealing directly with a UK-regulated firm and receiving UK protections, when in fact they were not.

This is not a new observation. In a December 2024 portfolio letter to CFD providers, the FCA said about 20% of firms in its CFD portfolio appeared to conduct little or no activity, with some seemingly existing only to provide what it called an FCA "halo" to a wider group. That is a snapshot from December 2024 and should not be read as today's proportion of active firms, but it shows the scale of the problem the regulator was already tracking before this week's announcement.

In October 2025, the FCA separately warned that some firms had redirected retail customers to associated CFD providers in third-country jurisdictions that lack equivalent consumer protections. The same warning said the FCA's retail CFD protections prevent nearly 400,000 people a year from risking more than their original stake, with an estimated annual benefit of between £267m and £451m, a figure the FCA originally set out in its 2019 policy analysis.

To address the firms it identified, the FCA said it used a mix of measures: restrictions on firms' ability to trade, requirements for independent business reviews, and enforcement investigations in the two most serious cases. The regulator did not disclose the legal basis for each of the 21 closures, so it is not established that every firm was compelled to shut down; cancelling a permission can also be initiated by the firm itself, subject to FCA assessment.

Why the contracting entity is what matters

A trading brand can span several legal entities. A UK-authorised company might sit alongside an offshore affiliate that shares a name, a website design or a customer-support line, without that affiliate holding any FCA permission itself.

The FCA's December 2024 letter put this plainly: a customer of an offshore group entity does not gain UK regulatory protection merely because a connected UK entity is FCA-authorised. The authorisation belongs to the specific legal entity that holds it, not to the brand or the corporate group as a whole.

That means the decisive question for a customer is not which name appears on the marketing but which legal entity is named as the counterparty in the account agreement, and which entity actually receives their money.

Protections that may disappear

FCA rules that took effect on 1 August 2019 give UK retail CFD clients a specific package of protections. These apply to retail business conducted by an FCA-authorised firm; they are not guaranteed once a customer is dealing with an unauthorised overseas entity, or has been moved into an "elective professional" category that sits outside standard retail protections.

Beyond these product-level rules, eligible customers of an authorised firm may also have access to two forms of redress, subject to the specific entity, regulated activity and circumstances of the claim. According to the FCA, a customer dealing with a firm that is unauthorised, or that lacks the relevant permission, will not have access to the Financial Ombudsman Service for a complaint and will not be protected by the Financial Services Compensation Scheme (FSCS) if the firm fails. Eligibility for either scheme depends on the specific entity, activity and claim, so a customer cannot assume cover simply because a related brand is FCA-authorised.

Why leveraged CFDs can lose money fast

A CFD is a leveraged derivative. It lets a customer speculate on the price movement of an asset, such as a currency pair or a share index, without owning the underlying asset itself. Leverage means the customer only puts up part of the position's total exposure as margin, which magnifies both gains and losses relative to the amount deposited.

The FCA warns that this structure allows large losses to accumulate quickly, because a comparatively small adverse move in the underlying price can represent a much larger percentage move against the smaller margin actually staked. The 2019 rules limit how far this can go for UK retail accounts, through the leverage caps, the 50% margin close-out and negative balance protection set out above. But those safeguards limit the scale of loss; they do not prevent a customer losing the money placed in the account, and they only apply where the counterparty is an FCA-authorised firm conducting retail business under FCA rules.

How to check who you are actually dealing with

The FCA's own tools are the starting point for verifying a firm before opening an account. The FCA Firm Checker shows whether a firm is authorised and holds permission for the specific service in question. The fuller Financial Services Register goes further, covering matters such as historical fines, permission to hold client money, and financial-promotion permissions.

The FCA advises comparing the exact firm name and contact details against the register, rather than relying on a similar brand name, and establishing which legal entity is actually the contractual counterparty. It is worth noting the limits of these tools too: the Firm Checker cannot definitively establish whether FSCS or Financial Ombudsman Service protection will apply to a particular claim, since that depends on the facts of the individual case.

What remains unknown

The FCA's announcement leaves several details undisclosed. It has not named the 21 closed firms, the three firms cancelling permissions, or the two firms under enforcement investigation. It has not defined what "closed" means in each case, whether that is dissolution, cessation of regulated activity, or completed cancellation of permissions, nor has it given a precise start date within 2025 for the count. The regulator has also not said how many customers were affected, how much client money was involved, or whether the customers of the linked overseas affiliates were based in the UK or elsewhere.

Readers with an existing account at a CFD provider, or considering opening one, can check the current status of a specific firm using the FCA Firm Checker and the Financial Services Register, both published by the FCA. Any further detail on the named firms, the two enforcement cases, or the FCA's wider CFD strategy would need to come from a future FCA publication.