Check UK Authorisation
Before using any UK financial services firm, verify its status through the FCA Firm Checker or Financial Services Register. Authorised firms must meet standards and have permission for specific activities, while registered firms face stricter limits and cannot offer regulated products needing authorisation. The Firm Checker confirms whether a firm has permission to sell you the relevant service. If a firm lacks authorisation or the correct permissions, avoid dealing with them entirely.
Confirm Australian Licensing
For CFD trading in Australia, confirm the provider holds an Australian financial services licence through ASIC's Professional Registers Search. CFD issuers without this licence operate outside Australian consumer protections, leaving you without access to the Australian Financial Complaints Authority if disputes arise. Overseas providers lacking an AFS licence may be scams. Even licensed issuers carry counterparty risk, since CFDs trade over-the-counter rather than on licensed exchanges.
Understand Protection Limits
Using an authorised firm increases your protection but does not eliminate all risk. Unauthorised firms deny you Financial Ombudsman access and FSCS coverage if the firm fails. For CFDs specifically, retail clients receive negative balance protection and margin close-out rules, though leverage still magnifies losses. Check whether you would be classified as retail or wholesale, as wholesale clients lose these safeguards and can owe money beyond their account balance.
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