Good practices and areas where firms could do more to meet their Consumer Duty price and fair value obligations.
In November 2025, we published our findings from a multi-firm review of contracts for difference (CFDs) providers[2]. We outlined how they were meeting the Consumer Duty[3] price and value outcome, and where they could improve.
In May 2026, we asked 81 CFD firms if they had made any changes as a result. Here we share our findings from this survey, including good practice and areas firms should consider further.
We still have some concerns, particularly about firms’ charges for a client holding a CFD position overnight:
- The level of these charges and the way firms apply them may not be consistent with their price and value obligations under the Consumer Duty (the Duty).
- Firms may not be giving clients enough information about these charges to meet the firm’s consumer understanding obligations.
These concerns extend to clients holding matched-off (hedged) open buy and sell CFD trades based on the same asset.
Firms should take careful note of this feedback and consider whether they need to make any changes. We will continue to monitor how they apply and communicate CFD trading charges and will follow up with individual firms where we need to.
Who this applies to
- All FCA-authorised investment firms that manufacture, promote or distribute contracts for difference, spread bets or rolling-spot-forex (collectively referred to here as CFDs) to retail clients.
- Consumers already active in, or considering trading, CFDs. These complex derivatives are considered high-risk investments as the leverage they provide can lead to large trading losses (and profits) and higher costs (including funding charges).
Why we are focusing on CFDs
We want CFD providers to make sure consumers are well-informed and get a fair deal.
CFDs are over-the-counter derivatives. Providers manufacture them and sell them directly to investors or distribute them onwards. They deal directly with clients who mainly trade without getting advice. This means the dealing spreads, and other charges for trading and maintaining a CFD open position, are key parts of the firm’s overall price and value proposition.
CFD providers have multiple opportunities to decide what retail consumers pay and the value they receive, and to directly benefit from those decisions. This sets up clear conflicts of interest. If providers do not manage this properly, they may not provide fair value.
What we found
Most firms, including some without retail offerings, had considered our review and made changes, or had plans to do so. However, many of these were relatively minor and had not fundamentally altered firms’ provision of price and value. Only a minority of firms had not made or planned any changes.
Fair value assessments, and peer group comparison
Our November review highlighted potential gaps in the overall scope of fair value assessments. Most firms in our May survey had acknowledged and addressed our concerns. They had amended their assessments to include all the costs and charges they applied to consumer accounts, instead of focusing on comparing execution costs, dealing charges and service offerings. This gives them a more rounded view of the costs and benefits of their products.
We also had concerns about narrow and inappropriate peer group comparisons, with firms often comparing themselves to offshore or global providers rather than ones based in the UK. Several firms have now moved to peer comparisons with UK regulated providers.
Appropriateness testing and vulnerability monitoring
In November, we suggested firms should consider a review of the robustness of their testing and proactive monitoring.
Several said they have now amended their onboarding processes. Changes included:
- Introducing an income threshold, below which consumers are not accepted or are subject to enhanced scrutiny at the appropriateness test stage.
- Reviewing target markets.
- Enhancing their vulnerability monitoring measures.
Client disclosures and information
In our May review, we found shortcomings with the information firms give to clients about their charges.
Most firms have made or planned some improvements in their communications, client-facing applications and websites.
It is good practice for firms to have dedicated web pages and pop-ups or overlays that explain the various fees, including how much they are and how the firm calculates them.
These web pages should be clearly signposted to consumers. Firms should consider giving consumers information this way as well as in their terms and conditions, their Key Information Documents (KIDs), and the information they must provide under our Consumer Composite Investments (CCI) framework[4] replacing KIDs.
Some firms have also included or enhanced the information about charges on deal entry tickets, bringing them in line with peers.
Only a minority of firms have improved their disclosures to add annual percentage rates to the implied daily percentage cost of overnight financing charges. Doing this would give clients a more widely used comparison point.
The mark-ups that firms include in their overnight funding charges are still largely opaque.
Levels of charges and interest on cash balances
In November, we highlighted variations in what firms charged their clients for, and how much they charged.
Our May review identified that most firms had not changed the level of charges after reviewing them, instead limiting any changes to providing more information about the existing rates.
Only 12% of firms said they had changed any charges. They had (or planned to):
- Introduced interest payable on cash balances.
- Reduced overnight financing charges on matched or hedged positions.
- Reduced overnight financing charges across outlier underlying product groups after peer comparisons (in some cases they revised their peer groups first).
- Changed their calculation methods to recognise that overnight financing is currently charged on total notional, with no interest paid on the initial margin posted by clients.
Areas firms should consider further
Firms have been slow to make changes
A high percentage of respondents had made or planned changes following our November publication. However, we are disappointed that – nearly 3 years since the introduction of the Duty and 6 months after our feedback – firms have not acted faster.
Fair value assessments should consider consumer outcomes
The changes firms have made are often designed to show that they have complied with the Duty, rather than materially changing their offering. For some, this may be appropriate. However, some firms made no material changes while remaining clear outliers for some charges – particularly overnight funding fees.
Firms should not treat their fair value assessments merely as a tick-box exercise designed to conclude that they deliver 'fair value'. They should focus more on consumer outcomes and potential harm.
Communications should support consumer understanding
Our review showed that firms do not explain their costs prominently enough in the client journey, even where they have reviewed and enhanced this information. In many cases, they only included it in terms and conditions or KIDs. Even where firms include overnight charges on deal tickets, they do not always show them as a projected annual percentage.
Firms should consider if they could produce better consumer outcomes with earlier and more prominent signposting to information about pricing and overall fair value.
Firms that permit or encourage clients to put on matched/hedged positions (for example, through offers of reduced or waived margins) should review all the information they provide throughout the client journey. We are concerned that firms may be encouraging clients to maintain open long and short positions that incur additional spread and funding charges. Firms should give clients a clear, balanced view of the pros and cons of this approach compared to simply closing matched positions.
Firms’ communications about costs should be fair and balanced, and help clients make informed decisions.
Overnight funding fees are inconsistent
Our survey confirmed that overnight funding fees vary considerably, both from firm to firm and across CFDs based on different assets.
The levels of these charges (or, in some cases, credits for short positions) are at a firm’s discretion and based on multiple factors. However, some firms’ charges seem high in the context of prevailing base rates and peer comparisons, with wide spreads applied on long and short positions.
Firms should consider if outlier rates are compatible with fair value for clients, taking into account the overall price and benefits.
Most respondents apply overnight funding charges on any matched/hedged CFD positions held by a client. Many justified these as an administration charge. However, most of the rates are the same full funding charge spread they apply to genuine long (buy) or short (sell) exposures.
Firms should consider their funding charges in the context of their price and fair value obligations, including:
- Their rates.
- How they apply charges to matched/hedged positions.
- How they promote matched trades to clients.
Next steps
We strongly recommend firms to review the good practice and areas of concern set out here, and further consider if they should change anything to meet their price and fair value obligations.
We expect firms to be able to show that they have reviewed their charges, and will follow up with them individually where we have concerns.