UK FCA findings on CFD providers' compliance with the consumer duty

The UK Financial Conduct Authority (FCA) has published its findings from its multi-firm review of contracts for difference (CFD) providers, assessing compliance with the consumer duty's "price and value" outcome. The review found examples of good practice but highlighted significant concerns and areas needing improvement. While some firms simplified charging structures and restricted high-risk retail clients, many failed to make meaningful changes following implementation of the duty, with board reports often restating requirements rather than analysing compliance. Fair value assessments (FVAs) were frequently inadequate, focusing narrowly on spreads and execution speed while overlooking material costs such as overnight funding charges and ancillary fees. The FCA highlighted poor transparency on fee structures and unjustified overnight funding charges, including on matched positions, which can create substantial costs with little benefit.

Few firms pay interest on client margin deposits despite high market rates, raising further concerns about fair value. Weaknesses also persisted in monitoring vulnerable clients, appropriateness testing and not adequately considering consumer complaints in FVAs. CFDs remain complex and risky products, and the FCA warns that foreseeable harm could arise from practices such as charging for hedged positions without offsetting costs. The regulator will engage directly with firms showing poor compliance and consider further action, stressing that CFD providers must deliver good outcomes, communicate clearly and ensure fair value under the consumer duty. The FCA encourages CFD manufacturers and distributors to consider these findings and address these identified gaps.

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