Most of the CFD firms the regulator surveyed looked again at
their charges after its review, then kept them. The Financial Conduct Authority
(FCA) surveyed 81 CFD firms in May 2026, six months after its November 2025
multi-firm review, and found that “only 12% of firms said they had changed
any charges.” Most of the rest explained their existing rates instead.
The findings, published
on 15 October and reported
by Finance Magnates the next day, put one fee first among the FCA’s
remaining concerns: what a client pays to keep a position open overnight.
What Finance Magnates found more telling than the 12% is that it sits at the bottom of the FCA’s list of changes, where some firms changed, or planned to change, their calculation “to recognise that overnight financing is currently charged on total notional, with no interest paid on the initial margin posted by clients.”
That sentence captures much of the economics of the fee.
Here is what the charge comprises, where it gets bigger than it looks, and how
to compare it between brokers.
|
Operator |
Practical |
|
What is the |
A daily fee |
|
What is it |
The full |
|
Who sets the |
The firm. The |
|
Does a hedged |
At most |
|
Which rule is |
The Consumer |
|
What does the |
Fees |
|
First |
Restate every |
What does a broker charge for holding a CFD overnight?
Two pieces: a benchmark rate for the currency of the
underlying and the broker’s mark-up on top.
IG’s UK charges page
puts its CFD admin fee at 1% for FX and 3% for other asset classes, charged on
positions held past 10pm UK time. Its help
page gives the index formula:
Number of contracts × value per contract × price × (admin
fee ± SONIA) ÷ 365.
A 360-day divisor applies outside sterling, Singapore dollar
and rand markets. Three days’ funding is charged on positions held through
Friday night.
CMC
Markets’ holding costs page uses the same basic formula, with SONIA as the
sterling benchmark.
When the short side pays too
A long pays the benchmark plus the mark-up. A short receives
the benchmark minus it, which turns into a charge when the mark-up is bigger
than the benchmark.
CMC explains this for share CFDs. Sell positions are
credited unless the interbank rate is at or below its add-on, in which case
they “may incur a holding cost charge.”
It prices FX holding rates using the pair’s tom-next rate.
For commodities, both CMC and IG build the charge from the gap between futures
prices, with their own fee on top.
Where the Cost Gets Bigger Than It Looks
Why is the charge on the full position, and what does
that do?
Because a CFD gives exposure to the full value of the
underlying, the financing runs on the full value too.
The FCA’s November review said disclosures could be clearer
about exactly that, including “charges being applied on the full
consideration the CFD gives the client exposure to with no offset against the
funds held on the client’s account.” It also highlighted the effect of
leverage on the size of the charge relative to the client’s own funds.
The review found that most firms had considered paying
interest on CFD account balances and decided not to.
All figures below are illustrative assumptions, not any
firm’s terms.
Daily charge = notional × (benchmark + mark-up) ÷ 365.
Take a £50,000 long index position backed by £2,500 of
margin, and a benchmark of 3.75%, using the Bank of England’s Bank
Rate as of October 2026.
|
Cost |
Broker A |
Broker B |
|
Annual rate |
6.25% |
7.25% |
|
Daily rate |
0.0171% |
0.0199% |
|
Cost per |
£8.56 |
£9.93 |
|
Cost over 90 |
£770.55 |
£893.84 |
|
90-night cost |
30.8% |
35.8% |
A client comparing 0.0171% and 0.0199% a day may never
register a full percentage point of annual difference. The FCA says an annual
rate “would give clients a more widely used comparison point.”
The last row shows the leverage effect the November review
said disclosures could make clearer. The fee is small against the position
value but large against the money the client actually put up.
What happens when a client is long and short at once?
Finance Magnates went looking for how a big UK name treats a hedged pair,
and CMC puts it in one sentence: “holding costs are still charged on both
sides regardless of your netting status.”
The FCA found the same at most of the firms it surveyed.
Most firms charge matched positions, many call it an administration charge, and
most apply “the same full funding charge spread” as on a genuine long
or short.
Run Broker B on a £50,000 long and a £50,000 short in the
same index. The long pays 7.25% and the short receives 0.25%, leaving a net
cost of £3,500 a year, or about £863 over 90 nights, for a position with no net
market exposure.
With the same spread on both legs, the net cost of a hedge
is twice the mark-up, whatever the benchmark does.
The FCA’s sharper concern is firms that encourage matched
positions with reduced or waived margin. It wants clients shown the pros and
cons of this approach against simply closing the trade.
What the FCA Found, and What It Wants
What the 12% actually changed
Four types of changes appear in the FCA’s list of actions
taken or planned by the 12% of firms that reported changing charges:
- Paying
interest on cash balances. - Cutting
financing charges on matched or hedged positions. - Cutting
charges on outlier product groups after peer comparisons. - Changing
the calculation to recognise that clients earn nothing on their margin.
The list includes planned changes as well as completed ones,
so the 12% describes intent as well as action.
On the changes firms did make, the FCA is blunt: they were
“often designed to show that they have complied with the Duty, rather than
materially changing their offering.”
The disclosure the regulator is asking for
The FCA’s good-practice list includes dedicated fee pages,
pop-ups and deal-ticket information explaining how charges are calculated.
These should provide information beyond the terms and conditions and key
information documents (KIDs).
Only a minority of firms have added an annual rate, and the
FCA asks firms to consider whether outlier rates are compatible with fair
value.
There is no deadline and no new rule. The FCA says it will
follow up with individual firms where it has concerns.
The same week, it flagged
surveillance gaps at seven retail brokers and said it would review
appropriateness tests.
Why Should Brokers Care?
The transferable model is simple: at its core, the overnight
charge is a benchmark plus a mark-up, applied to notional. The comparison
question for any broker or asset class is then how big the mark-up is, what it
is charged on, and whether the client can see it.
Finance Magnates’ read is that the annual percentage rate (APR) line is the
cheapest fix on the FCA’s list and probably the one that helps a client
comparing two brokers most.
Furthermore, Finance Magnates’ gold
swap survey shows what that looks like in one market. All 32 gold long
readings it checked carried a negative swap, and the one credit on offer was a
capped promotion.
The FCA’s findings have implications for several teams
within a CFD broker.
|
Role |
Primary |
Required |
|
Product and |
Are any of |
Restate every |
|
Compliance |
Does our |
Document the |
|
Client |
Can a client |
Put the APR |
|
Finance |
What do |
Size the |
Two things may be worth watching into 2027: whether the
FCA’s individual follow-ups produce named outcomes, and whether interest on CFD
cash balances spreads beyond the firms already planning it.
Summary: What This Means Now
The FCA has now said twice, eleven months apart, that some
overnight charges may not represent fair value, and most firms answered with
explanations rather than lower rates.
The fee is a benchmark plus a mark-up on the full position,
which makes it large against the margin a client posts and can double the
mark-up on a hedge.
The next round is individual follow-ups, and a firm that can
show its rates as APRs against UK peers has its evidence ready.
Most of the CFD firms the regulator surveyed looked again at
their charges after its review, then kept them. The Financial Conduct Authority
(FCA) surveyed 81 CFD firms in May 2026, six months after its November 2025
multi-firm review, and found that “only 12% of firms said they had changed
any charges.” Most of the rest explained their existing rates instead.
The findings, published
on 15 October and reported
by Finance Magnates the next day, put one fee first among the FCA’s
remaining concerns: what a client pays to keep a position open overnight.
What Finance Magnates found more telling than the 12% is that it sits at the bottom of the FCA’s list of changes, where some firms changed, or planned to change, their calculation “to recognise that overnight financing is currently charged on total notional, with no interest paid on the initial margin posted by clients.”
That sentence captures much of the economics of the fee.
Here is what the charge comprises, where it gets bigger than it looks, and how
to compare it between brokers.
|
Operator |
Practical |
|
What is the |
A daily fee |
|
What is it |
The full |
|
Who sets the |
The firm. The |
|
Does a hedged |
At most |
|
Which rule is |
The Consumer |
|
What does the |
Fees |
|
First |
Restate every |
What does a broker charge for holding a CFD overnight?
Two pieces: a benchmark rate for the currency of the
underlying and the broker’s mark-up on top.
IG’s UK charges page
puts its CFD admin fee at 1% for FX and 3% for other asset classes, charged on
positions held past 10pm UK time. Its help
page gives the index formula:
Number of contracts × value per contract × price × (admin
fee ± SONIA) ÷ 365.
A 360-day divisor applies outside sterling, Singapore dollar
and rand markets. Three days’ funding is charged on positions held through
Friday night.
CMC
Markets’ holding costs page uses the same basic formula, with SONIA as the
sterling benchmark.
When the short side pays too
A long pays the benchmark plus the mark-up. A short receives
the benchmark minus it, which turns into a charge when the mark-up is bigger
than the benchmark.
CMC explains this for share CFDs. Sell positions are
credited unless the interbank rate is at or below its add-on, in which case
they “may incur a holding cost charge.”
It prices FX holding rates using the pair’s tom-next rate.
For commodities, both CMC and IG build the charge from the gap between futures
prices, with their own fee on top.
Where the Cost Gets Bigger Than It Looks
Why is the charge on the full position, and what does
that do?
Because a CFD gives exposure to the full value of the
underlying, the financing runs on the full value too.
The FCA’s November review said disclosures could be clearer
about exactly that, including “charges being applied on the full
consideration the CFD gives the client exposure to with no offset against the
funds held on the client’s account.” It also highlighted the effect of
leverage on the size of the charge relative to the client’s own funds.
The review found that most firms had considered paying
interest on CFD account balances and decided not to.
All figures below are illustrative assumptions, not any
firm’s terms.
Daily charge = notional × (benchmark + mark-up) ÷ 365.
Take a £50,000 long index position backed by £2,500 of
margin, and a benchmark of 3.75%, using the Bank of England’s Bank
Rate as of October 2026.
|
Cost |
Broker A |
Broker B |
|
Annual rate |
6.25% |
7.25% |
|
Daily rate |
0.0171% |
0.0199% |
|
Cost per |
£8.56 |
£9.93 |
|
Cost over 90 |
£770.55 |
£893.84 |
|
90-night cost |
30.8% |
35.8% |
A client comparing 0.0171% and 0.0199% a day may never
register a full percentage point of annual difference. The FCA says an annual
rate “would give clients a more widely used comparison point.”
The last row shows the leverage effect the November review
said disclosures could make clearer. The fee is small against the position
value but large against the money the client actually put up.
What happens when a client is long and short at once?
Finance Magnates went looking for how a big UK name treats a hedged pair,
and CMC puts it in one sentence: “holding costs are still charged on both
sides regardless of your netting status.”
The FCA found the same at most of the firms it surveyed.
Most firms charge matched positions, many call it an administration charge, and
most apply “the same full funding charge spread” as on a genuine long
or short.
Run Broker B on a £50,000 long and a £50,000 short in the
same index. The long pays 7.25% and the short receives 0.25%, leaving a net
cost of £3,500 a year, or about £863 over 90 nights, for a position with no net
market exposure.
With the same spread on both legs, the net cost of a hedge
is twice the mark-up, whatever the benchmark does.
The FCA’s sharper concern is firms that encourage matched
positions with reduced or waived margin. It wants clients shown the pros and
cons of this approach against simply closing the trade.
What the FCA Found, and What It Wants
What the 12% actually changed
Four types of changes appear in the FCA’s list of actions
taken or planned by the 12% of firms that reported changing charges:
- Paying
interest on cash balances. - Cutting
financing charges on matched or hedged positions. - Cutting
charges on outlier product groups after peer comparisons. - Changing
the calculation to recognise that clients earn nothing on their margin.
The list includes planned changes as well as completed ones,
so the 12% describes intent as well as action.
On the changes firms did make, the FCA is blunt: they were
“often designed to show that they have complied with the Duty, rather than
materially changing their offering.”
The disclosure the regulator is asking for
The FCA’s good-practice list includes dedicated fee pages,
pop-ups and deal-ticket information explaining how charges are calculated.
These should provide information beyond the terms and conditions and key
information documents (KIDs).
Only a minority of firms have added an annual rate, and the
FCA asks firms to consider whether outlier rates are compatible with fair
value.
There is no deadline and no new rule. The FCA says it will
follow up with individual firms where it has concerns.
The same week, it flagged
surveillance gaps at seven retail brokers and said it would review
appropriateness tests.
Why Should Brokers Care?
The transferable model is simple: at its core, the overnight
charge is a benchmark plus a mark-up, applied to notional. The comparison
question for any broker or asset class is then how big the mark-up is, what it
is charged on, and whether the client can see it.
Finance Magnates’ read is that the annual percentage rate (APR) line is the
cheapest fix on the FCA’s list and probably the one that helps a client
comparing two brokers most.
Furthermore, Finance Magnates’ gold
swap survey shows what that looks like in one market. All 32 gold long
readings it checked carried a negative swap, and the one credit on offer was a
capped promotion.
The FCA’s findings have implications for several teams
within a CFD broker.
|
Role |
Primary |
Required |
|
Product and |
Are any of |
Restate every |
|
Compliance |
Does our |
Document the |
|
Client |
Can a client |
Put the APR |
|
Finance |
What do |
Size the |
Two things may be worth watching into 2027: whether the
FCA’s individual follow-ups produce named outcomes, and whether interest on CFD
cash balances spreads beyond the firms already planning it.
Summary: What This Means Now
The FCA has now said twice, eleven months apart, that some
overnight charges may not represent fair value, and most firms answered with
explanations rather than lower rates.
The fee is a benchmark plus a mark-up on the full position,
which makes it large against the margin a client posts and can double the
mark-up on a hedge.
The next round is individual follow-ups, and a firm that can
show its rates as APRs against UK peers has its evidence ready.
