FCA Finds Most Respondents Levy Matched CFD Funding Fees

The Financial Conduct Authority has returned to the price of holding retail contracts for difference overnight. Its 15 October follow-up says most firms had made or planned changes after its earlier review, particularly to assessments and communications. Only 12% said they had changed any charges. For a client holding equal buy and sell trades on the same market, clearer disclosure leaves a practical question: what does keeping both positions open cost?

The FCA asked 81 CFD firms in May whether they had acted on its November 2025 findings. Its report does not give an exact respondent count behind the 12% figure. Some firms did not have retail offerings. The examples behind that figure include actions taken and actions still planned, so it is not a measured market-wide price cut.

Most firms had made or planned improvements to websites, applications or other communications. Only a minority had added an annual percentage rate alongside the implied daily cost of overnight financing. Even deal tickets showing overnight charges do not always show a projected annual percentage. That is a disclosure finding, separate from the charge level or a customer's outcome.

The matched-position bill

Suppose a retail client opens a £20,000 long position and a £20,000 short position on a UK 100 cash index CFD, then holds both for 30 calendar funding days. Assume the index stays at an illustrative 10,000 points and funding rates stay fixed. For dealing, use IG's one-point daytime spread and Capital.com's two-point spread displayed in a direct page check at 20:25 UTC on 15 October. Assume each spread is unchanged at exit. These are modelling assumptions, not live trade quotes.

On IG's FTSE 100 cash CFD schedule, one mini contract is £2 per point and the spread is one point during the stated 08:00 to 16:30 dealing window. At 10,000 points, each leg has £20,000 of notional exposure. IG's index funding formula applies SONIA plus a 3% annual administration margin to the long, and SONIA less that margin to the short. If SONIA were 4% purely for this illustration, the long would cost about £3.84 per calendar funding day and the short would earn about £0.55. The net is £3.29 a day, or £98.63 over 30 days. The benchmark cancels across the matched legs, leaving 6% a year on one leg's notional at a constant price.

Capital.com's UK 100 page displayed a two-point spread at that check. Two £1-per-point contracts give the modelled £20,000 exposure per leg at 10,000 points, using the provider's contract example. Its UK fee schedule sets the sterling-index administration component at 4% a year, or about 0.01096% daily, on top of the benchmark. Its hedging-mode guidance matters: the benchmark adjustment applies to each side, but the administration component is charged on only one side of an equal hedge on its standard platform. At the same assumed SONIA rate, the long's benchmark debit and the short's benchmark credit cancel. One £20,000 administration charge remains: about £2.19 a calendar funding day, or £65.75 over 30 days. The provider says MT4 positions receive the full charge on both sides, so this example applies to its standard hedging mode.

At IG, a one-point spread costs £2 per £2-per-point leg for a complete round trip, or £4 for the pair. At Capital.com, the observed two-point spread costs £4 per leg, or £8 for the pair, if unchanged at exit. Modelled 30-day funding plus round-trip spread is £102.63 at IG and £73.75 at Capital.com. Prices and rates can move; dividend adjustments, slippage and optional stop fees are excluded. Neither figure is a trade quote or a judgement on either service.

The decision before the trade

For an already-open pair, the original entry spread is sunk. Closing both legs now costs about £2 at IG's assumed one-point quote or £4 at Capital.com's observed two-point quote. Reopening the pair later would add the same amounts, making close-and-reopen costs £4 and £8 respectively if spreads were unchanged. Keeping the pair open instead incurs the modelled £98.63 or £65.75 in funding over 30 days. A later final close would cost both strategies a spread, so it does not change that incremental comparison. The trader must still weigh separate entry prices, the option to lift one side and when each leg's profit or loss is realised.

At 5% initial margin, a £20,000 leg requires £1,000 under both providers' public terms. Capital.com says an equal hedge uses margin on one side. IG's public pages do not establish the combined margin for this matched account. Funding is calculated on notional exposure, not merely margin cash. IG's CFD agreement says it does not normally pay interest on client money. Capital.com's terms make any interest discretionary. The comparison excludes the account-specific opportunity cost of committed cash.

The public pages show formulas, contract sizes, margin rules and, at Capital.com, an indicative daily market rate. IG gives an annual funding margin and benchmark information; Capital.com publishes a daily rate and annual administration component. A client can model costs before trading but must check the live quote and account-specific treatment. We did not inspect logged-in deal tickets.

The FCA's 2025 review warned that funding on both sides of matched positions could create substantial ongoing charges. Its new follow-up says most respondents still charge on matched trades and most use the same full funding spread as on directional positions. Firms cited administration and, in the earlier review, platform or counterparty arrangements; the newer report does not determine whether a given firm's costs justify its price. It asks firms to explain the pros and cons of holding a hedge versus closing it. For a retail trader, the usable test is the full round-trip spread plus projected funding and cash cost over the intended holding period, set against the reason for keeping two contracts alive.