Only about 10 of 81 CFD firms changed any charges after the FCA review

Roughly ten of 81 CFD firms told the FCA they had changed any charges after a sector-wide fair-value review. The regulator reported the result as 12%, so the exact count cannot be recovered from the rounded percentage; 12% of 81 is 9.72. The defensible conclusion is “about ten,” leaving about 71 firms that did not report a charge change even though most said they had reviewed the findings or planned other responses.[1]

The more consequential finding concerns matched positions. Most respondents continued to apply overnight funding charges when the same client held offsetting long and short CFDs on the same asset. Many firms described the charge as administration, yet the FCA said most applied the same full funding spread used for genuine directional exposure. The client can therefore have little or no net price exposure while paying financing on both gross legs.[1][2]

Gross financing survives after net exposure disappears

A CFD gives the customer economic exposure to an asset without paying its full value. Overnight financing is commonly calculated on the notional exposure rather than only on the margin posted. A long position may be charged a benchmark rate plus a markup; a short may receive less than the benchmark, receive nothing or even incur a charge, depending on the firm and asset. The FCA found wide variation in both levels and treatment.[1][2]

Now place an equal long and short position in the same CFD. Price gains on one leg are broadly offset by losses on the other, before spreads, slippage, dividends and charges. The customer’s net directional exposure is close to zero, yet each open contract remains on the account. If the firm calculates financing per position, it can charge the long leg and apply a smaller credit or another charge to the short leg. The customer pays for gross contracts despite neutralising the market direction.[1][2]

That does not prove the firm has zero cost. It may incur technology, capital, hedging, liquidity, administration and operational expenses, and contractual positions still need to be maintained. The FCA’s concern is proportionality and explanation. Calling the amount an administration charge does not by itself justify using the same full funding spread that prices a directional position whose provider may need to fund or hedge net exposure.[1]

Illustration only. It is not an FCA market average and excludes spreads, dividends, day-count conventions and product-specific adjustments.[1][2]

The example shows why daily rates can be difficult to evaluate. A net daily percentage may look small, but repeated across a year and applied to full notional it can become large relative to the margin the customer deposited. If £10,000 of margin supports the two £100,000 legs in the illustration, a £6,000 annual cost would equal 60% of that cash. Actual leverage, rates and holding periods vary, but the denominator effect is real.[1][2]

The FCA found disclosure moved faster than price

Most firms told the FCA they had improved or planned to improve communications, fair-value assessments, onboarding or vulnerability monitoring. Many added all fees to their assessments, changed peer groups to UK-regulated firms and enhanced web pages or deal-ticket information. Those are substantive control improvements when implemented well. But the regulator said many changes were relatively minor and did not fundamentally alter price and value.[1]

Only 12% said they had changed any charges. Their actions included paying interest on cash, reducing financing on matched positions, lowering outlier rates for some underlying assets, or changing calculations to recognise that financing is charged on total notional while no interest is paid on initial margin. The FCA did not publish firm names or the exact number adopting each measure, so the survey cannot support a ranking of providers.[1]

The asymmetry between disclosure and price is the core industry finding. A clearer explanation can help a customer avoid or shorten an expensive position, but it does not make an outlier charge fair. Consumer Duty requires firms to assess whether the total price is reasonable relative to benefits, not merely whether the cost appears somewhere in contractual documents.[1][2]

Markups remain difficult to reconstruct

The FCA said overnight-funding markups were still largely opaque. A customer may see a daily amount or formula without a clean separation between the market benchmark, product adjustment and broker markup. That makes it hard to compare firms or determine how a rate changes when central-bank policy moves. It also prevents outsiders from testing whether the administration rationale for a matched position bears any relationship to actual cost.[1]

Only a minority of firms added annual percentage rates to the implied daily financing cost. An APR is not a perfect measure for a derivative that may be held only briefly, and compounding or day-count rules can differ. It is nevertheless a familiar scale. Showing both the cash amount for the expected holding period and an annualised rate allows customers to compare a seemingly tiny daily deduction with other borrowing costs.[1][2]

The initial 2025 review found even more extreme variation: some firms charged customers for overnight short positions where other firms would have paid a credit on the same direction. That does not automatically prove the higher-priced firm fails the Duty, because the total product and benefits may differ. It does require a reasoned fair-value assessment using appropriate peers rather than selecting offshore providers or a narrow comparison set that makes the rate appear normal.[2][3]

Matched positions can be encouraged by margin design

The FCA also warned about firms that permit or encourage matched positions through reduced or waived margin. Lower margin can make opening the second leg look like a cheap way to pause market exposure without closing. But both positions can continue attracting spreads and overnight financing. A customer who believes the hedge has “frozen” the account may not appreciate that value is still decaying through gross charges.[1]

Closing the original position and later reopening it has different costs and risks: the customer realises the gain or loss, may pay another spread, and can miss market movement while out of the trade. Holding matched positions preserves both contracts but can create continuing financing. There is no universally superior choice. The FCA’s point is that firms should present the trade-off clearly rather than highlighting margin relief while burying the two-leg cost.[1]

This is particularly relevant to rolling-spot foreign exchange and leveraged CFDs marketed for short-term trading. A position held for days or weeks can incur a cost based on notional exposure far above the customer’s cash. The cumulative effect should be part of appropriateness, product governance and outcome monitoring, not treated solely as a line-item disclosure.[1][2]

What the 12% does not tell us

The survey result is self-reported and aggregated. It does not say that the other roughly 71 firms were all overcharging, that every charge change improved value, or that unchanged rates necessarily breached the Duty. Some firms may have concluded, with evidence, that their existing total price was fair. The FCA itself says some non-material changes may be appropriate. Its concern is that some firms remained clear outliers without materially changing their offer.[1]

The 12% also covers “any charges,” not specifically overnight funding. Some firms introduced interest on cash; others reduced matched-position rates or changed particular product groups. Without the underlying responses, it is impossible to say how many stopped full-spread charging on hedged positions. The strongest market-wide statement is that material pricing reform was uncommon despite widespread review.[1]

A proper next-stage investigation would collect each UK-authorised provider’s benchmark, markup, short credit, matched-position policy, margin offset and cash-interest rate on the same date for a standardised set of instruments. It would then calculate one-day, 30-day and annualised costs using the same notional and margin. That would turn the FCA’s qualitative outlier finding into a reproducible market comparison.[1][2]

The regulator’s next test is outcomes

The FCA said it will follow up individually where it remains concerned. Firms should therefore be able to show not only a revised document but actual customer outcomes: average financing paid, holding periods, the share of clients using matched positions, complaints, vulnerable-customer exposure, cash interest forgone and the profitability of the charges. Those data would reveal whether disclosure changes altered behaviour or merely documented the same economics.[1]

The 81-firm follow-up exposes a sector that responded more readily with assessment and communication than with price changes. About ten firms changed any charges; most continued applying full funding spreads to matched positions; and annualised disclosure remained a minority practice. The finding is not that every unchanged fee is unlawful. It is that, more than three years after Consumer Duty began, the industry’s most economically important overnight charges remained largely intact and difficult to compare.[1][2][3]

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