FCA crackdown closes 21 CFD firms with overseas links

Britain's financial regulator says 21 CFD firms have closed since 2025 as it targets businesses using UK approval to support overseas operations.

Key points

The Financial Conduct Authority said 21 contracts-for-difference firms have closed since 2025, while three more are cancelling their regulatory permissions.
Two firms face investigation as the regulator targets businesses that use UK authorisation to lend credibility to related overseas operations.
The FCA did not name the firms, so the announcement does not establish wrongdoing by any particular broker beyond the actions disclosed by the regulator.

Britain's Financial Conduct Authority said 21 contracts-for-difference firms have closed since 2025 as it intensifies scrutiny of businesses with little UK activity but links to overseas trading operations. Three additional firms are cancelling their regulatory permissions and two are under investigation, according to a regulator statement reported by Reuters on September 24. The FCA did not identify any of the firms involved.

Why the FCA is acting

The regulator is focused on what it has previously called the FCA 'halo': a UK-authorised entity may do negligible business in Britain while its name or regulatory status is used to reassure customers of a related offshore company. In that arrangement, customers can believe they are dealing with the supervised UK firm even when their contract is with an overseas entity outside the FCA's jurisdiction. That distinction can determine which complaint, compensation and conduct protections apply.

Dominic Holland, the FCA's director of sell-side supervision, said consumers need clarity about who they are dealing with and what protections they have. He said the regulator would act when firms blurred the boundary between regulated UK activity and overseas businesses. The latest tally shows the practical outcome of a supervisory campaign the FCA outlined in late 2024, when it said about one in five firms in its CFD portfolio appeared to conduct little or no activity.

What CFD protections cover

A contract for difference lets a customer take a position on the price movement of an asset without owning it. Because the product is leveraged, relatively small market moves can create much larger gains or losses. The FCA made permanent retail safeguards in 2019, including leverage limits ranging from 30-to-1 to 2-to-1, mandatory position close-outs when account funds fall to half the required margin, negative-balance protection and standardised risk warnings showing the share of retail accounts that lose money.

Those rules apply to firms and activity within the FCA's scope. Customers dealing with an offshore affiliate may not receive the same safeguards, may lack access to Britain's Financial Ombudsman Service and may not qualify for compensation if a firm fails. The FCA's concern is therefore not only whether an overseas business is named alongside a UK-regulated company, but which legal entity actually holds the customer account and provides the product.

A campaign with unfinished cases

Finance Magnates reported that the FCA's action follows its earlier warning about largely inactive 'halo' firms and confirms that the 21 closures have occurred since 2025. The trade publication also noted that the regulator has not named the affected companies. That omission limits what can be concluded about individual brokers and means customers should verify a firm's legal identity and permissions directly rather than infer that a familiar group brand carries UK protection.

The three permission cancellations are still in progress, while the two investigations remain unresolved. An investigation is not itself a finding of misconduct. The next points to watch are whether the FCA publishes final notices or names specific firms, and whether its action changes how internationally connected brokers describe regulatory coverage. For now, the confirmed development is a broad enforcement tally: 21 closures, three pending cancellations and two active investigations within a campaign aimed at clearer boundaries between UK-regulated firms and overseas affiliates.

Sources

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