FCA’s 2027 Compliance Overhaul: A New Reality for FX and CFD Brokers

For compliance officers across the UKs financial sector, the roadmap to 2027 just became significantly steeper. The Financial Conduct Authority (FCA) has finalized a sweeping revamp of its complaints reporting framework, a move that will essentially double the administrative workload for regulated firms while demanding a level of data granularity that many legacy systems may struggle to provide.

While the changes apply across the board—from banks to insurers—the impact will be particularly acute for the retail trading sector. FX and CFD brokers, often under the microscope for consumer protection, must now prepare for a regime that prioritizes frequency, specificity, and the protection of vulnerable clients.

From Annual to Bi-Annual: The New Rhythm

The headline change is a shift in tempo. Currently, many firms operate on a reporting cycle tied to their specific accounting reference dates, often filing once a year. The new rules, which officially kick in for data collection on January 1, 2027, will force the entire industry onto a synchronized calendar.

Under the new “consolidated return” system—which replaces five disjointed legacy forms—firms must submit data every six months. The reporting windows will close on June 30 and December 31, with the first submissions due by July 2027.

Sarah Pritchard, the FCA‘s Executive Director for Supervision, framed the overhaul as a push for “transparency and consistency.” The regulator’s logic is clear: by the time they receive annual data under the current system, consumer harm may have already crystallized. Bi-annual reporting allows the watchdog to spot systemic issues faster. However, this speed comes at a price. The FCA estimates the industry-wide compliance cost will jump to £6 million annually, nearly double the initial projections, as firms scramble to upgrade IT infrastructure and retrain staff.

Killing the “Other” Category

For years, the “Other” category on complaint forms has served as a convenient catch-all for compliance teams, accounting for roughly 7% of all reported grievances. The new regime effectively closes this loophole.

The FCA is demanding precision. Brokers will no longer be able to file vague reports; instead, they must utilize granular product categories that explicitly cover FX, CFDs, spread betting, and derivatives.

Crucially, these complaints must be mapped against the Consumer Duty outcomes introduced in 2023. A complaint can no longer just be a “dispute.” It must be categorized by the specific failure it represents:

• Price and Value: Issues regarding spreads, commissions, or overnight financing.
• Product Performance: Platform outages, slippage, or execution failures.
• Support: Inadequacies in customer service or complaints handling.
• Consumer Understanding: Misleading promotions or unclear risk disclosures.

This shift forces brokers to look in the mirror. By categorizing complaints this way, the FCA is essentially compelling firms to self-audit their adherence to the Consumer Duty in real-time.

The “Vulnerable Customer” Mandate

Perhaps the most significant cultural shift in the new rules is the mandatory tracking of vulnerability. In the high-stakes world of leveraged trading, the FCA is keenly focused on customers who may be suffering from gambling addictions, financial hardship, or cognitive impairments.

Come 2027, brokers must report two distinct data points for every complaint:

1. Identification: Was the complainant identified as vulnerable? (Regardless of whether the vulnerability caused the issue).
2. Failure of Care: Did the firm fail to properly consider that vulnerability during the interaction?

This requirement will likely force CFD brokers to rely on more sophisticated monitoring tools—such as AI-driven behavioral analysis—to flag erratic deposit patterns or aggressive over-leveraging that signals addiction. While the regulator has stated this data will not be published publicly, it will undoubtedly fuel supervisory interventions.

No More Hiding Behind the Group

The final structural change involves how corporate groups report data. The FCA is abolishing group-level reporting. Large financial institutions with multiple licenses must now file separate returns for each individual UK entity.

While industry respondents pushed back during the consultation phase, fearing duplicate counting of complaints that span multiple departments, the regulator held firm. The rationale is simple: entity-level visibility is the only way to isolate specific pockets of risk before they infect the wider group.

A Tech-Forward Future?

The timing of this announcement was not coincidental. On the same day the new reporting burdens were revealed, the FCA launched its AI Live Testing initiative. Major players like NatWest and Monzo have already signed up to test how artificial intelligence can be deployed in live markets to handle tasks like fraud detection and, notably, complaints handling.

For the brokerage sector, the message is implicit but clear: the compliance burden is getting heavier, and the only sustainable way to carry it is through better technology.