CFD restrictions: why retail investors are limited to 30x leverage

A contract for difference, or CFD, is essentially a bet rather than the purchase of an asset, and it often involves borrowing money¹. You never own the share, currency or commodity the contract refers to. You and the provider settle the difference between the price when you open the position and the price when you close it, and because the position is usually leveraged, a small move in the underlying price produces a much larger move in your account.

That combination is why the Financial Conduct Authority permanently restricted the sale of CFDs to retail consumers in 2019, limiting borrowing and requiring loss-rate warnings¹. The rules have not been relaxed since. The FCA has also been acting against firms that misuse UK authorisation to sell CFDs: 21 CFD firms have closed since 2025, and three other firms were cancelling their permissions at the time of the FCA's statement².

If you are searching because someone has approached you about CFDs, the short answer is that only FCA-authorised people or firms can provide financial advice or conduct a financial promotion, and unauthorised activity is illegal and can be prosecuted³. The rest of this page explains what a CFD is, how leverage works, what the restriction actually does, and where the protection stops.

What a CFD is: a bet on price movements, not an asset

A CFD is a contract between you and a provider about the future price of something. You do not buy the thing itself. The House of Commons Library describes CFDs as "essentially a bet rather than the purchase of an asset, and often involve borrowing money"¹. That single sentence carries most of what a consumer needs to know.

Because you never take delivery of the underlying asset, you have none of the rights an owner has. There is no share certificate, no vote at a company meeting, and no dividend paid to you as a shareholder. What you have is a contractual right to the difference in price, which is where the name comes from.

This matters when you compare a CFD with buying the asset directly. If you buy shares through a regulated investment platform, you own a regulated product and the firm holding it is subject to rules on how your money is kept. A CFD is a derivative contract with the provider on the other side of your trade, which means the provider's own financial strength is part of your risk.

The same logic applies to spread betting, which is a close cousin: a bet on whether a price will rise or fall, settled by the size of the move. One ombudsman case turned on a spread betting firm's own terms and conditions, which "stated that they didn't quote for spread bets on home/away wins"⁵. The lesson is that the firm's rulebook, not just the market, decides what you can and cannot do.

Leverage: how borrowing makes losses build quickly

Leverage is the borrowing inside a CFD. You put down a fraction of the position's value, and the provider effectively lends you the rest. That magnifies gains and losses in the same proportion, which is why the FCA's intervention focused on limiting how much borrowing a retail customer can take on¹.

The mechanics are simple to state and easy to underestimate. A leveraged position moves further, in percentage terms, than the deposit behind it, so a modest adverse move in the underlying price can consume a large share of what you put in. A large enough adverse move wipes out the deposit entirely, and because the position is a contract rather than a purchase, the loss is not capped by the value of an asset you own.

The FCA's 2019 intervention limited borrowing and required loss-rate warnings¹. Those warnings exist because the proportion of retail accounts that lose money is high enough to be a consumer protection issue rather than a footnote. The FCA's own statement on firms misusing UK authorisation records that "In 2025, the FCA warned investors in CFDs at risk of losing UK protections"².

Why CFDs are restricted for retail investors

The restriction is a product intervention: a rule that limits how a product can be sold, rather than a ban on the product itself. The FCA permanently restricted the sale of CFDs to retail consumers in 2019, limiting borrowing and requiring loss-rate warnings¹. The aim was to stop retail customers being sold a leveraged bet with losses that could run past their deposit.

The FCA has kept up enforcement since. Its statement on firms misusing UK authorisation records that 21 CFD firms have closed since 2025, that three other firms were cancelling their permissions, and that firms have faced "a range of actions, including restricting their trading abilities, requiring independent reviews of their business and opening enforcement investigations"². The same statement notes that in 2025 the FCA warned investors in CFDs at risk of losing UK protections².

The pattern the FCA is targeting is not ordinary regulated CFD trading. It is firms that use a UK authorisation to look legitimate while selling to customers who do not realise the protections they think they have do not apply. That is why the FCA's warning about losing UK protections matters: a firm can be authorised for one activity and not another, and the protection follows the activity, not the logo.

For a consumer, the practical effect is that the CFD market open to you is narrower and more heavily labelled than it was before 2019. Firms must show loss rates, borrowing is capped, and the marketing that reaches you is supposed to carry warnings. Where those warnings are missing, that is itself a signal.

What the permanent restriction means for you

The restriction changes what a firm can offer you, not what you can lose. Borrowing is limited and loss-rate warnings are required¹, but a leveraged bet on a price movement is still a leveraged bet. The FCA's intervention was designed to reduce harm, not to make CFDs safe.

The protection that does exist is narrow. The Financial Services Compensation Scheme can only protect you if the firm was authorised by the Prudential Regulation Authority or the FCA and if your investment was a regulated product⁴. The FSCS publishes a list of what it does not cover, which includes cryptoassets, peer-to-peer lending, money held on pre-paid credit cards, Christmas or other savings clubs, "boiler room" scam investments, losses arising purely from investment performance, and some electronic payment services or currency bureaux⁶.

That list matters because CFD losses usually fall into the gap. If the firm was never authorised, or the product was not a regulated one, there is no compensation route. The FSCS's own guidance is to check whether the particular activity the authorised firm is carrying out for you is regulated by the PRA or the FCA⁴. A firm can hold an authorisation and still be doing something outside it.

Firms that have stopped selling CFDs

The FCA's crackdown has produced a steady stream of exits. Its statement records that 21 CFD firms have closed since 2025, and that three other firms were cancelling their permissions at the time of publication². Firms that stayed have faced "restricting their trading abilities, requiring independent reviews of their business and opening enforcement investigations"².

For a customer of one of those firms, the practical questions are whether positions can still be closed, whether money can be withdrawn, and what happens to any complaint in progress. The FCA's statement does not set out a customer process, so the route is the firm first and then the Financial Ombudsman Service if the firm does not resolve it. The ombudsman's case studies include a spread betting dispute where the firm's own terms and conditions excluded the market in question⁵, which shows the kind of evidence that decides these cases.

If a firm has stopped taking customers or closed a brand, that is a change in who you can deal with, not a change in what you already owe or are owed. Keep statements and contract notes, and put any complaint in writing so there is a dated record.

What should I do if someone promotes CFDs to me without being authorised?

By law, only FCA-authorised people or firms can provide financial advice or conduct a financial promotion, and unauthorised activity is illegal and can be prosecuted³. That covers the social media posts and messaging app groups that have become a common route for CFD promotion.

The FCA publishes a warning list you can use to check if a firm or individual is known by the FCA to be operating without permission or running scams⁷. Checking the list takes a minute and is the single most useful step before responding to any approach.

Investment scams have recognisable patterns. Age UK's guidance on investment scams lists pressure tactics among the warning signs: "They pressure you with a time-limited offer, e.g. offer a bonus or discount if you invest before a set date"⁸. The FSCS's own scam guidance makes the same point from the compensation side: if the firm was not authorised, there is no scheme to fall back on⁹.

Why do CFD providers show risk warnings?

Risk warnings are a regulatory requirement, not a courtesy. The FCA's intervention requires firms to show the percentage of retail client accounts that lose money, alongside limits on borrowing¹. The warning is there because the loss rate is high enough that a customer who does not read it is being misled by omission.

The same principle runs through other regulated products. Firms offering high-cost short-term credit, such as payday loans, must include prominent risk warnings on all financial promotions¹⁰. The FCA's approach is consistent: where a product carries a high risk of loss, the promotion has to say so prominently.

For a consumer, the warning is a prompt to ask three questions. Is the firm authorised for this specific activity? What proportion of its retail clients lose money? And what happens to my money if the firm fails? The FSCS's guidance on checking whether your money is protected answers the third question for regulated products⁴, and the FCA warning list answers the first⁷.

Where the protection stops

The FSCS is the backstop for authorised firms that fail, and it is explicit about its limits. It can only protect you if the firm was authorised by the PRA or the FCA and if your investment was a regulated product⁴. Its published exclusions include cryptoassets, peer-to-peer lending, money held on pre-paid credit cards, Christmas or other savings clubs, "boiler room" scam investments, losses arising purely from investment performance, and some electronic payment services or currency bureaux⁶.

CFDs sit awkwardly against that framework. They are sold by authorised firms, which is why the FCA could intervene in 2019¹, but the losses a retail customer suffers are usually investment losses rather than the failure of the firm. The FSCS does not compensate for investment performance⁶. So the protection that matters most is the one applied before you trade: the leverage limit and the loss-rate warning.

If a firm has treated you unfairly rather than simply lost you money, the Financial Ombudsman Service is the route. Its case studies show it will look at the firm's own terms and conditions, as in the spread betting dispute where the firm "stated that they didn't quote for spread bets on home/away wins"⁵. Complaints about unauthorised promotions can also go to the FCA, which maintains the warning list⁷.