An FCA-regulated brand does not automatically make every account in its international group eligible for UK compensation. For an offshore CFD account, the decisive questions are which legal entity contracted with you, what activity it performed, whether a firm has failed, and whether you have a qualifying claim rather than an ordinary trading loss.
Start With the Company Named in Your Contract
The first step is to identify the legal entity that opened and operates the account. A brokerage group may use one website, app, logo and customer-support team while offering accounts through companies in the UK, Europe, the Caribbean, the Middle East or another jurisdiction. Those entities can have different licences, client-money arrangements, leverage limits and complaint routes. The brand displayed on a login screen is not necessarily the company that owes you the money.
Look at the client agreement, account-opening confirmation, periodic statement, deposit instructions and withdrawal records. Find the exact company name, registered address, governing law and any regulator or licence number. The payment beneficiary may be a processor or group company, so it is evidence rather than conclusive proof by itself. If documents name different entities, ask the firm to explain in writing which company is your contractual counterparty and which entity holds or safeguards client assets.
Then search the exact legal name and Firm Reference Number in the FCA Financial Services Register. Confirm the firm’s status and permissions, and check whether the relevant activity and product fall within its authorisation. A UK-authorised company can coexist with an offshore affiliate, but authorisation does not automatically pass across common ownership. The FCA’s broker-licence guide explains why a licence is a defined set of permissions, not a group-wide guarantee.
Pay particular attention to amendments made after the account was opened. A firm may change the legal entity serving new clients, ask existing customers to accept revised terms or reclassify an account after a customer opts for professional status. The original agreement, the amendment and the customer’s consent may each matter. If a move was presented as a technical update but changed governing law, regulator or compensation access, preserve the notices and compare them carefully. A later account statement may identify the current entity but cannot always explain what protections applied to an earlier transaction.
When FSCS Compensation May Be Available
The Financial Services Compensation Scheme can consider certain investment claims when a covered firm has failed and cannot meet its liabilities. Eligibility generally requires that the firm was authorised by the FCA or PRA when the customer used it, that it carried out a regulated activity for the customer, that the customer suffered a financial loss and that the firm owes a legal liability. The firm must also be in default under FSCS rules. FSCS assesses the specific claim; the existence of a UK licence somewhere in a group is not enough. [1][2]
For eligible investment claims involving firms that failed after April 1, 2019, the general limit is up to £85,000 per eligible person, per firm. The limit is a ceiling, not an automatic payment or a guarantee that every CFD account balance will be reimbursed. The actual amount depends on the eligible loss, the firm’s liability, the product and the applicable rules. If the firm has not failed, or if the loss is simply the result of a market move, the investment compensation scheme is not designed to pay the customer back.
An investment claim can arise from a shortfall in assets a firm should have held or from certain actionable failures such as negligent advice or a breach of regulatory duties, depending on the facts. CFD accounts are often execution-only, which means a claim based on bad advice may not fit the relationship. The customer may still have a claim about missing client money, unauthorised transactions or other legal liability, but the evidence and legal basis must be assessed. FSCS is not a general insurance policy for every investment loss.
Figure 1. Establish the contracting entity and the type of legal claim before choosing a compensation route.
Why an Offshore Contract Usually Changes the Answer
If the account agreement is with a foreign affiliate rather than the FCA-authorised UK company, the UK compensation scheme would not normally cover the offshore firm’s own failure simply because the wider group has a UK licence. The offshore company may be regulated in its home jurisdiction, but any compensation scheme, client-asset rules or complaint body will depend on that jurisdiction and on the customer’s legal status. The local regulator’s existence does not automatically provide the same remedy as FSCS.
The key distinction is between a UK-regulated firm’s legal responsibility and the separate obligations of its offshore affiliate. If the UK entity merely appears on a corporate website, that alone may not create a claim against it. If the UK firm itself introduced the customer, made representations, arranged the transaction or performed another regulated activity, a question may arise about its own duties. Whether that gives rise to compensation depends on the actual activity, contract, representations and legal liability—not just the ownership structure.
The FCA’s September 2026 announcement said it was challenging CFD firms that did little UK business but used authorisation to make connected overseas companies appear more trustworthy. The regulator warned that customers could think they were dealing directly with a UK-regulated firm when they were not. The announcement makes the entity question central, but it does not establish that every customer of every offshore affiliate has a successful claim. Each case requires its own documents and facts. [3]
FSCS, the Financial Ombudsman and the Regulator Do Different Jobs
FSCS and the Financial Ombudsman Service are not interchangeable. FSCS deals with eligible compensation claims against firms that have failed and cannot meet qualifying liabilities. The Financial Ombudsman Service can resolve certain complaints against businesses within its jurisdiction, typically after the customer has complained to the firm first. A complaint may be upheld without triggering FSCS, and a firm failure may require an insolvency process even when no Ombudsman award is available.
The FCA supervises and enforces rules but does not normally operate as an individual customer’s compensation tribunal. A report to the regulator can help it identify a wider conduct problem, but it is not the same as a personal award. Similarly, a foreign regulator may investigate the offshore company but cannot necessarily return a particular customer’s money. The correct route depends on whether the issue is a missing balance, a contractual dispute, alleged misconduct, a firm’s insolvency or an unauthorised firm.
Do not assume that a complaint to one body automatically preserves every deadline or substitutes for another claim. Keep a dated record of the first complaint, all responses, the account entity and any notices of administration or liquidation. If a firm is in insolvency, follow the administrator’s or liquidator’s process as well as checking whether FSCS has declared the firm in default. Legal advice may be appropriate where the account was moved offshore after marketing that implied UK protection.
Figure 2. The £85,000 figure is an eligible-claim ceiling, not an automatic payout; market losses are not covered.
Illustrative Comparison
| Situation | Possible UK route | What must be established |
| Contract with failed FCA-authorised firm | Potential FSCS claim | Default, regulated activity, eligible loss and legal liability |
| Contract with offshore affiliate | Usually local regulator / insolvency route | Foreign entity, local rules and any local compensation scheme |
| Offshore booking after UK marketing | Potential complaint against responsible UK firm | Evidence of representations and the UK firm’s own legal duties |
| Ordinary CFD trading loss | Usually no FSCS reimbursement | Market performance is excluded from investment compensation |
| Missing client money after firm failure | Potential FSCS / insolvency claim | Reconciliation, shortfall, firm default and claim eligibility |
General guide only. FSCS and FOS eligibility are assessed under their respective rules; this is not legal advice.
Three Scenarios That Produce Different Outcomes
**Scenario one: a UK-authorised CFD firm fails.** The account agreement names the authorised UK firm, the service was regulated, the firm enters insolvency and a qualifying client-money or legal-liability claim exists. FSCS may assess an investment claim, subject to the scheme’s rules, firm-default status, eligibility and the £85,000 general limit for relevant post-April 2019 failures. This is the clearest route, but it still is not an automatic reimbursement of every balance or trading loss.
**Scenario two: the account is held by an offshore affiliate.** The contract names a foreign company and deposits were made to that entity. The parent or another affiliate is FCA-authorised, but it did not contract with the customer for the offshore account. In that case, an FSCS claim against the UK company would not ordinarily follow from group ownership alone. The customer should identify the offshore regulator, local complaint route, insolvency process and any available compensation mechanism. A separate claim against the UK entity would require evidence of its own legal responsibility.
**Scenario three: the offshore move followed potentially misleading UK marketing.** The customer was told that the account was covered by the FCA or would retain UK safeguards, then was booked into a foreign entity. The mismatch may justify a complaint and a closer examination of the UK firm’s conduct, but it does not automatically prove liability or establish FSCS eligibility. Evidence of what was said, who said it, what permissions applied and which firm performed each activity becomes critical. The FCA’s recent crackdown is relevant context, not a substitute for that evidence.
Trading Losses Are Not the Same as Firm-Failure Losses
CFDs are leveraged contracts. If a customer loses money because the underlying market moved against the position, the loss is generally an investment outcome rather than an FSCS claim. Retail negative-balance protection under applicable UK rules may limit the amount owed to a provider, but it does not restore the funds lost from the account. If a broker liquidates a position in line with its contract and regulatory obligations, a customer may dislike the result without having a compensable claim.
A different question arises if a firm fails to return money that should have remained in segregated client accounts, if records are missing, or if a firm breached duties in a way that caused a legally recoverable loss. Even then, segregation does not mean each customer deposit is individually guaranteed by the government. Client-money rules are designed to protect and reconcile assets; a shortfall can still lead to a claims and distribution process, and FSCS eligibility depends on the facts.
This distinction also matters when an account statement shows a negative balance, a withdrawal request is pending or a platform stops operating. A market loss is not automatically a firm failure. A withdrawal delay is not proof of insolvency. A firm can suspend operations for regulatory or operational reasons while the legal status is being clarified. Preserve the evidence and avoid paying recovery agents who promise guaranteed compensation in return for an upfront fee.
Figure 3. Preserve contract, payment, regulatory and complaint records to establish the relevant facts.
What Evidence to Collect Before Making a Claim
Save the complete client agreement and any amendments, account-opening emails, risk disclosures, statements, deposit receipts, withdrawal requests, transaction history and communications with account managers. Preserve the exact website pages or promotional messages that referred to FCA authorisation, particularly if they implied that an offshore account was covered by UK protections. If a salesperson advised you to switch to a professional account or foreign entity, record the date, the explanation given and the documents you were asked to sign.
Make a timeline: when the account was opened, which entity accepted the funds, when the account was moved or reclassified, when the firm restricted access, and when you first complained. Note whether the issue is a missing client balance, a disputed transaction, alleged mis-selling, poor execution, or ordinary trading losses. Different legal bases require different evidence. For example, an execution dispute needs order records and price information; a client-money shortfall needs statements and the administrator’s records; an entity-misrepresentation complaint needs marketing and contract documents.
Check the FCA Register and warning list using the exact company name, not only the brand. Confirm whether the company is in default with FSCS or whether an administrator or liquidator has been appointed. Do not assume that an online claim form is sufficient if the scheme requires a firm to be declared in default. For a firm outside UK jurisdiction, identify the local regulator and any statutory compensation scheme, and verify deadlines through official sources.
A Decision Table for Offshore CFD Customers
An offshore CFD customer should not begin with the question ‘Is the group FCA-regulated?’ but ‘Which company owes me this obligation?’ The next question is whether that obligation is a regulated UK activity and whether the loss is of a type that can be compensated. A familiar brand can still leave the customer contracting with an entity that sits outside the UK scheme.
Customers who discover a mismatch should ask the firm to state the counterparty and protections in writing. If the response conflicts with the contract, seek independent advice and submit a complaint through the appropriate channel. A customer should not accept a sales explanation that a UK licence ‘covers the group’ without evidence of the actual legal structure and regulatory perimeter. The recent FCA action reinforces why that distinction matters, while still leaving firm-specific outcomes to the evidence.
The site’s report on the FCA crackdown on CFD firms misusing UK authorisation covers the regulatory context. Its guide to why most retail CFD traders lose money explains a separate but related point: consumer protections can reduce specific risks, but they cannot eliminate the possibility of market losses.
Where the facts are complex, a solicitor or regulated adviser with experience in financial-services disputes may help determine whether a claim should be made against the offshore company, a UK-authorised affiliate, or both. This is particularly relevant if sales material, onboarding records and the signed agreement point in different directions. The cost of legal advice should be weighed against the amount at stake and the availability of free complaint routes. Do not assume that a claims-management company is necessary: FSCS claims are free to submit, and a third party cannot guarantee acceptance. The first practical step is usually to establish the entity, preserve evidence and ask the relevant official body what process applies.
Methodology
This article summarizes official FSCS, FCA and Financial Ombudsman Service guidance as of October 29, 2026. The £85,000 limit applies to eligible investment claims for relevant firm failures after April 1, 2019, subject to scheme rules; it is not a guarantee or a cap on every type of legal remedy. Offshore-account conclusions are qualified because legal liability, entity, activity, jurisdiction and client classification must be assessed individually.
Sources
- FSCS, Compensation Rules and Eligibility
- FSCS, Investment Compensation and Protection
- FCA, Twenty-Four CFD Firms Closing in Crackdown on Misuse of UK Authorisation, September 25, 2026
- FCA, How to Check a Firm or Individual Is Authorised
- FCA, Financial Services Register
- FCA, Warning Investors in CFDs Risk Losing Out on Protections
- Financial Ombudsman Service, Who We Can Help
- Financial Ombudsman Service, How to Complain
- FSCS, Designated Investment Business
- FCA, Warning List of Unauthorised Firms
- FSCS, Failed Firms and Investment Claims
Johan Shamshad is a financial markets writer at Dave Finances covering cryptocurrencies, trading platforms, brokers, fintech, financial regulation, and developments across global markets. He previously worked at Gulf News, adding newsroom experience to his coverage of fast-moving financial and digital-asset markets.
His work focuses on identifying market-moving events, company developments, regulatory changes, product launches, and shifts in trading and financial infrastructure.
Johan contributes news and analysis designed to help readers understand not only what happened, but why a development matters and how it may affect the wider financial landscape. You can reach out to him via his social media accounts:
Linkedin: https://www.linkedin.com/in/johan-shamshad-742851262/
X: https://x.com/Yasmine_FX
Investing: https://www.investing.com/members/contributors/279781574