FCA — Financial Conduct Authority
UK conduct regulator since 2013, successor to the FSA; FSCS and Ombudsman backing
- Max retail leverage
- 1:30
- Compensation limit
- GBP 85,000 per eligible person per firm for investment business
- Negative balance protection
- Required
About the FCA
The Financial Conduct Authority took over conduct regulation of UK financial firms in 2013, when the Financial Services Authority was split into a conduct body and the Prudential Regulation Authority. It authorises and supervises the firms that sell contracts for difference and spot forex to UK consumers, setting both the prudential floor for smaller investment firms and the conduct rules that govern marketing, onboarding and order execution. Its remit covers appropriateness testing, financial promotions and the treatment of vulnerable clients, and it has repeatedly used product intervention powers where it judged that retail investors were being harmed by leveraged products.
For leveraged trading the headline rules are the 2018 product intervention measures that were made permanent for UK retail clients. Leverage on major currency pairs is capped at 1:30, standardised risk warnings must disclose the percentage of retail accounts losing money, and bonuses or other trading incentives are prohibited. A 50 percent margin close-out rule applies per account, and negative balance protection means a retail client cannot end up owing the broker more than they deposited. Crypto derivatives, including crypto CFDs and exchange traded notes, have been off limits to UK retail clients since January 2021.
Client protection rests on two further pillars. Client money must be segregated under the CASS rules, held at approved banks and reconciled daily, with an annual audit filed with the regulator. If an authorised firm fails and cannot meet its obligations, the Financial Services Compensation Scheme can pay eligible claimants up to GBP 85,000 per person per firm for investment business. Disputes that a firm will not resolve can be taken to the Financial Ombudsman Service without cost to the consumer, and an ombudsman decision that the client accepts is legally binding on the firm.
Why we rate it tier 1
The FCA combines binding leverage caps, mandatory negative balance protection, the CASS segregation regime, FSCS compensation and a free, binding ombudsman. Enforcement is active and the public register is granular enough to check individual permissions.
High minimum capital, enforced conduct rules, a public register that is genuinely policed, and an independent complaints or compensation route that pays out when a firm fails. These are the licences worth paying a wider spread for.
FCA protections at a glance
| Full name | Financial Conduct Authority |
|---|---|
| Jurisdiction | United Kingdom |
| Region | Europe |
| Established | 2013 |
| Maximum retail leverage | 1:30 |
| Leverage regime | Retail CFD leverage is capped at 1:30 for major currency pairs, with lower caps of 1:20, 1:10, 1:5 and 1:2 for other asset classes. Crypto derivatives have been banned outright for UK retail clients since January 2021. |
| Investor compensation scheme | Financial Services Compensation Scheme (FSCS) |
| Compensation limit | GBP 85,000 per eligible person per firm for investment business |
| Negative balance protection | Required — Negative balance protection is mandatory on a per-account basis, so a retail client cannot lose more than the funds in their CFD account. |
| Client-fund segregation | Firms holding client money must comply with the CASS client asset rules, keeping retail funds in segregated accounts at approved credit institutions. Balances must be reconciled daily and are subject to an annual CASS audit. |
| Complaints route | Complain to the firm first, which has eight weeks to issue a final response. If unresolved, escalate free of charge to the Financial Ombudsman Service, whose decisions bind the firm if accepted by the client. |
| Public register | Financial Services Register (register.fca.org.uk) |
What to check on the Financial Services Register
- 1Open register.fca.org.uk and search the firm name or its six digit firm reference number.
- 2Confirm the status line reads Authorised rather than Registered, EEA authorised or No longer authorised.
- 3Open the permissions tab and check the firm may deal in investments as principal or agent.
- 4Check the trading names and website addresses listed match the site you are about to deposit with.
- 5Note any requirements, restrictions or published disciplinary notices attached to the entry.
Register: register.fca.org.uk. Always navigate to the register from the regulator's own domain rather than a link supplied by the broker.
Brokers on PipDig regulated by the FCA
None of the brokers currently reviewed on PipDig hold a FCA licence. That is not a mark against the authority — our review coverage follows where readers actually open accounts, and it changes as we test more firms.
FCA FAQ
Does FSCS cover my trading losses?
No. The Financial Services Compensation Scheme covers losses caused by an authorised firm failing and being unable to return your money or meet a valid claim against it. It does not compensate you for losing trades or for market movements. Cover for investment business runs to GBP 85,000 per eligible person per firm.
Why is my leverage lower than an offshore broker offers?
The FCA caps retail CFD leverage at 1:30 on major currency pairs and lower on other assets, because its research found most retail accounts lose money and higher leverage worsened the outcomes. Professional clients can request higher leverage, but only if they meet the qualification tests and give up retail protections such as the Ombudsman route.
Can I trade crypto CFDs with an FCA firm?
Not as a retail client. The FCA banned the sale, marketing and distribution of derivatives and exchange traded notes referencing unregulated cryptoassets to UK retail consumers with effect from January 2021, citing valuation difficulties and the prevalence of financial crime. Offers of crypto CFDs to UK retail clients are a strong warning sign about a broker.