FCA presses CFD firms on overnight charges after only 12% report fee changes

The Financial Conduct Authority’s 15 October follow-up has sharpened attention on overnight CFD funding. After asking 81 firms in May about their response to its November 2025 review, it found that only 12% reported changing charges; the examples included implemented or planned changes. Most had concentrated on explaining existing prices.[1]

The findings leave a distinction between improving a fee disclosure and improving the economics of the product. A clearer order ticket can make a charge understandable. It cannot, by itself, establish that the amount charged is reasonable relative to the service and benefits supplied.[3]

The cost continues after execution

The November review had identified assessments that concentrated on spreads and execution while giving less attention to holding costs. It also described financing charged on the full contract exposure, without subtracting the client’s margin deposit, and generally without interest paid on that deposit. A small dealing spread therefore tells only part of the cost story.[2]

What a quoted annual rate means in cash

An illustrative calculation shows why the denominator matters. Assume a constant £10,000 contract exposure, £1,000 margin, an 8% simple annual funding charge and a 365-day basis. Funding is £10,000 × 8% ÷ 365, or about £2.19 a day. Over 30 days it is £65.75: about 0.66% of exposure, but 6.58% of the initial margin. The 8% input is a hypothetical financing rate on exposure, not an annual percentage rate on the margin deposit.

Now assume an equal opposite contract is kept open and carries a separate 2% annual debit. Combined funding becomes £10,000 × (8% + 2%) ÷ 365, or about £2.74 a day, despite the offsetting price exposure. If the second leg instead receives a credit, that credit must be subtracted. These are our calculations, not a broker quotation. They exclude spreads, commissions, currency conversion, changing prices and rates, and any weekend charging convention.

In the new findings, the FCA questions full funding spreads on matched positions, often described by firms as administration charges. It also identifies opaque mark-ups and limited use of annualised disclosures. The 12% figure measures reported fee changes, not the share of firms found to breach rules.[1]

The regulatory test is broader than a price comparison

PRIN 2A.4 requires manufacturers to assess the relationship between price and reasonably expected benefits, including the expected total cost over the product’s life. Comparable market prices and the firm’s own costs may inform that assessment. The rules also require regular review and appropriate action when a product no longer provides fair value. A competitor charging a similar rate is evidence for the assessment, rather than a substitute for it.[3]

For the business model, the implication is that execution pricing, holding duration and financing income belong in the same analysis. Two clients making the same initial trade can incur different total costs if one closes it immediately and the other carries it for weeks. Looking only at the entry spread hides that difference.

The FCA says it will continue monitoring charges and follow up with individual firms where concerns remain. The publication is supervisory feedback; it announces no universal financing tariff.[1]

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