FCA

The Financial Conduct Authority took over conduct regulation from the former Financial Services Authority in 2013. Any firm offering forex or CFD trading to UK retail clients must be authorised by the FCA (or operate under a specific permission regime) and is listed on the public Financial Services Register with a Firm Reference Number (FRN).

Rules for retail CFDs

After the UK's departure from the EU, the FCA kept its own permanent rules for retail CFDs, which closely mirror the ESMA measures:

• leverage limits from 30:1 on major currency pairs down to 2:1 on cryptocurrencies (the FCA separately banned the sale of crypto derivatives to retail clients from January 2021);
• a 50% margin close-out rule;
• negative balance protection;
• a ban on trading incentives;
• a standard risk warning including the firm's CFD loss disclosure percentage.

Client money and compensation

FCA-regulated firms must hold client money in segregated accounts under its client money rules. If an authorised investment firm fails and cannot return client assets, eligible clients may claim from the Financial Services Compensation Scheme (FSCS), which covers investment claims up to 85,000 pounds per person per firm. It does not cover trading losses. See investor compensation scheme.

Practical note

The FCA publishes warnings about unauthorised firms and clone firms. Always check the register directly and use only the contact details listed there. See how to check a broker licence and our regulator registers page.