FCA fines CFD firm for unfair customer treatment

The FCA has fined Forex TB Limited (FXTB), a Cypriot contract for differences (CFD) firm, £276,100 for failing to treat its customers fairly and for providing investment advice without authorisation.

The FCA found that FXTB put pressure on customers to engage in CFD trading, including encouraging customers to borrow money from family and friends. Furthermore, the firm:

• provided unauthorised investment advice to customers;
• risks of CFD trading were not fully explained to customers, who were often inexperienced traders; and
• the firm encouraged customers to provide false information in order to become “Professional Clients”, losing the protections given to retail clients.

FXTB were ordered to cease providing services to UK consumers in April 2021, and from October 2023, the FCA removed all of the firm’s permissions. The FCA stated that the fine would have been over £1.2m, but FXTB showed that this would cause it serious financial hardship.