The timing was not accidental. Cyber attacks on financial firms rose materially in 2025, and the FCA noted that over 40% of cyber incidents reported to it last year involved a third-party provider, including high-profile outages affecting Cloudflare and Amazon Web Services. "Resilience is being tested like never before, with firms facing growing cyber threats and increasing reliance on third parties to deliver the essential financial services consumers rely on," said Mark Francis, the FCA's director of specialists and wholesale sell-side.
A Fourth Layer of Compliance
Under the new framework, firms will use a shared reporting portal developed jointly with the Prudential Regulation Authority and the Bank of England, replacing fragmented reporting channels that had produced inconsistent data across the industry.
The FCA said it has streamlined the final requirements after consulting in December 2024, removing duplicate reporting obligations for payment service providers and credit rating agencies while preserving what it describes as the "information we need to assess impact early." Most firms the FCA solo-regulates will complete a short-form incident report rather than a full disclosure, according to the regulator.
This matters to CFD brokers because their business model depends on uninterrupted platform access, often delivered through third-party technology stacks including white-label software, liquidity aggregators, and cloud infrastructure.
The FCA had already doubled the complaints reporting burden for FX and CFD firms beginning in 2027, requiring semi-annual rather than annual filings and more granular categorisation of issues. Tuesday's rules add operational incident and supply chain visibility on top of that.
FM Intelligence estimates the combined annual compliance cost for a mid-tier FCA-regulated CFD provider now ranges from GBP 325,000 to over GBP 1 million, depending on the firm's exposure to each workstream.
Consumer Duty Pricing Reckoning
The incident rules arrive as the FCA continues to press CFD firms on pricing transparency under its Consumer Duty framework. A multi-firm review published in November 2025 found that many providers had made "few or no changes" to their products or services since the Duty came into force in July 2023, and that board-level reporting often restated regulatory language rather than demonstrating substantive analysis of value for retail clients.
The core issue is overnight funding. The FCA identified firms charging interest separately on matched long and short positions with no offset, meaning clients with zero net market exposure still accumulated ongoing costs. With base rates elevated, the gap between what brokers charge on leveraged overnight positions and what they pay on client margin deposits has widened into a material revenue line.
IG Group generated GBP 133 million from interest on client funds in its fiscal year 2025, CMC Markets earned GBP 42.5 million from the same source. FM Intelligence estimates that a repricing of overnight funding charges and mandatory margin interest sharing could reduce swap-related revenue by 5% to 15% for the average mid-tier FCA CFD provider.
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The FCA's March 2026 Consumer Investments Regulatory Priorities report, published on March 4, confirmed the pricing review is ongoing, not concluded. Finance Magnates reported in November 2025 that Consumer Duty enforcement was shaping up as the next major flashpoint between the FCA and CFD brokers, and since then the regulator has extended the same lens to complex exchange-traded products, broadening the scope beyond CFDs alone.
Client Categorization Rules Threaten the Professional Opt-Up Economy
The second major workstream, CP25/36, published by the FCA in December 2025, proposes replacing the current MiFID II-derived professional client test with a wealth-only threshold set at GBP 10 million in investable assets, eliminating the existing two-of-three criteria system that allowed clients with smaller portfolios to self-certify as professionals based on trading experience.
The stakes for brokers are significant. When retail clients opt up to professional status, they forfeit leverage caps, negative balance protection, Financial Services Compensation Scheme cover up to GBP 85,000, Financial Ombudsman access, and standardized risk warnings. For brokers, professional clients can be offered higher leverage, generating more trading activity on less capital.
The FCA disclosed in October 2025 that some firms used high-pressure sales techniques to encourage retail CFD clients to waive these protections, and that at one unnamed firm more than 90,000 people lost approximately GBP 75 million over four years after following promotions by financial influencers.
FM Intelligence estimates that 10% to 30% of the current elective professional client book across UK CFD brokers may not meet the proposed GBP 10 million threshold, depending on each firm's client demographics.
The FCA estimates its existing CFD retail protections prevent nearly 400,000 people annually from losing more than their initial stake, providing between GBP 267 million and GBP 451 million of annual consumer protection. Final rules from CP25/36 are expected by late 2026 or early 2027.
Finfluencer Enforcement Climbs 174%
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The third workstream, targeting marketing and distribution channels, has accelerated faster than most brokers anticipated. FCA enforcement actions against financial influencers rose 174% in 2025 to 74 cases, compared with 27 in 2024, itself a 2,600% increase from 2023. Seven social media personalities with a combined Instagram following of 4.5 million were sentenced at Southwark Crown Court on February 20, 2026, for promoting an unauthorized foreign exchange trading scheme.
The FCA had flagged 38 finfluencers as early as October 2024 and moved to trial on related unauthorized forex scheme charges shortly thereafter.
The March 2026 Regulatory Priorities report also named copy trading alongside pump-and-dump schemes and concealed overseas pooled accounts as emerging financial crime threats, the first time the FCA has categorised copy trading as a financial crime vector in a sector-wide publication.
For brokers such as eToro, Capital.com, Pepperstone, IC Markets, and CMC Markets that offer copy or social trading features, this classification creates a meaningful new suitability obligation: the FCA's reading of MiFID Article 4(1)(9) treats copy trading as portfolio management, requiring full suitability assessments for each client, compressing margins on what was previously a relatively frictionless product.
Record Revenue, Shrinking Client Base
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The regulatory pressure arrives against a paradox that makes the FCA's concerns both more and less urgent simultaneously. Revenue at the largest listed UK CFD brokers is at or near record levels.
IG Group posted GBP 1.076 billion in fiscal year 2025 revenue, up 9% year-on-year. CMC Markets reported GBP 340 million in net operating income. Plus500 generated $792 million globally. Yet the UK leveraged trader population contracted 39% from its 2021 peak of 275,000 to approximately 167,000 in 2025, according to Investment Trends data.
Fewer clients, more revenue per client. The dynamic reflects three converging factors: elevated interest income on client margin deposits, a shift toward non-FX CFDs such as equity indices and commodities where overnight funding charges are heavier, and the natural attrition of less experienced retail participants.
The "continuing trader" cohort, defined as active and experienced participants, actually rose from 110,000 to 124,000 in 2025 even as headline trader numbers declined. The FCA's intervention is aimed squarely at the revenue mechanisms underpinning this per-client increase.
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Top 15 FCA-Regulated Brokers by Monthly Volume (Q4 2025)
|
Broker |
CFD % |
Loss Rate % |
FMI Risk |
|
IG Group |
92% |
68% |
High |
|
Saxo Bank |
80% |
62% |
Low |
|
Plus500 |
93% |
78% |
High |
|
eToro |
93% |
49% |
High |
|
Pepperstone |
20% |
75% |
Med |
|
XTB |
89% |
74% |
Med |
|
CMC Markets |
6% |
68% |
High |
|
OANDA |
66% |
74% |
Med |
|
Axi |
81% |
76% |
Med |
|
Capital.com |
96% |
80% |
High |
|
FxPro |
52% |
79% |
Med |
|
FXCM |
87% |
75% |
High |
|
Hantec Markets |
75% |
n/a |
Low |
|
GAIN Capital |
87% |
69% |
Med |
|
ATFX |
86% |
n/a |
Med |
Source: Finance Magnates Intelligence Q4 2025 volume data. FMI compliance exposure ratings are proprietary assessments based on publicly available data.
Consolidation Already Under Way
The combined pressure from all four workstreams is accelerating a restructuring that had already begun. Gain Capital plans to surrender its FCA license. AETOS, ADSS, and GMI Markets have already done so. Around 20% of FCA-regulated CFD brokers are estimated to be inactive.
None of the approximately 100 EEA CFD firms that entered the UK's post-Brexit Temporary Permissions Regime obtained permanent FCA authorization, a 100% failure rate that sets a clear precedent for the regulator's tolerance.
For the largest operators, including IG Group, CMC Markets, Plus500, and eToro, the regulatory environment may work in their favour. IG acquired Freetrade, CMC Markets partnered with Revolut. Their scale in compliance infrastructure, diversification into stockbroking and crypto, and established supervisory relationships create advantages that smaller competitors cannot easily replicate.
The FCA's message, articulated across its Consumer Duty reviews, client categorization consultation, finfluencer enforcement, and now its new resilience framework, is that the economics of UK CFD provision must be fair, its distribution honest, and its clients genuinely protected.
For an industry where approximately 70% of retail clients lose money, the regulator shows no sign of treating that as a settled question.