Check regulatory status
Use your national register to confirm the firm is authorised for the services you need. The FCA Firm Checker shows UK permissions. The Financial Services Register records historic fines and client money handling rights. Verify the firm was authorised when you first contacted them. Avoid unauthorised firms entirely. For Australian CFD providers, check ASIC's Professional Registers for an AFS licence. Overseas providers without one mean no access to AFCA dispute resolution.
Appointed representatives work for a principal firm that sets their permitted activities. If they exceed these, you may lose ombudsman and compensation scheme protection. Verify contact details against regulator records to avoid clone firm scams.
Read product terms
Each CFD issuer sets its own terms. Leverage means losses apply to the full position value, not just your margin. Small price moves against you can cause large losses. Check the product disclosure statement for margin call rules and position close-out terms. Review all fees including spreads and overnight financing, which reduce profits and worsen losses.
Confirm your client classification. Wholesale status removes negative balance protection and margin close-out rules. You can owe money beyond your account balance and lose AFCA access.
Verify protections
Authorised firms may offer regulated and unregulated products. Regulators have limited powers over unregulated services. Check your specific activity is permitted. UK authorised firms with correct permissions provide Financial Ombudsman and FSCS access if the firm fails. Registered but unauthorised firms lack these protections.
Australian retail clients should confirm negative balance protection and margin close-out protection apply. Without these, losses can exceed your account balance.
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