FCA closes 21 CFD firms over UK authorisation misuse as two enforcement investigations begin

Action required if: you run a CFD or investment firm with thin UK business and linked offshore entities. If that description does not fit you, this is context worth noting but not acting on.

Twenty-one contracts for differences (CFD) firms have closed since the start of 2025 following a targeted FCA supervisory sweep (FCA press release, 25 September 2026). Three further firms are currently cancelling their permissions. In the two most serious cases, the FCA has opened formal enforcement investigations. The regulator has not named any of the firms involved.

The pattern the FCA is targeting is specific: firms that carry out little genuine UK business but use their UK authorisation as a badge to make linked overseas companies appear more trustworthy. The FCA says the effect is that consumers are misled into believing they are dealing with a UK-regulated firm and hold the protections that come with it, when they do not. Those protections matter: retail CFD traders with an FCA-authorised firm can access the Financial Ombudsman Service, claim compensation if a firm fails, and trade under leverage limits. None of that applies when trading through an overseas entity.

The tools deployed have included trading restrictions and mandatory independent business reviews, escalating to formal enforcement investigations in the two most serious cases. Dominic Holland, the FCA's director of sell-side supervision, said: "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."

This is not a sudden change of direction. The FCA restricted CFD sales to retail customers in 2019, set out sector priorities in a 2024 CFD portfolio letter, and in 2025 warned investors about the risk of losing UK protections through offshore redirection. The closures are the enforcement end of a supervisory escalation that has been building for several years.

The practical question for firms is what constitutes "little UK business" in the FCA's view. The source material does not define it, which is the most significant gap here. If your firm holds UK authorisation but the majority of client activity runs through an affiliated overseas entity, this sweep is directly relevant to you.

Sources

• Twenty four cfd firms closing crackdown misuse uk authorisationfca.org.uk
• Uk regulatory crackdown closes cfd firms overseas linksglobalbankingandfinance.com