The UK’s Financial Conduct Authority has fined Dinosaur Merchant Bank Limited (DMBL) £338,000 for failing to implement effective systems to detect and report suspicious trading in its contracts for difference business.

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The fine comes amid broader regulatory developments in the UK CFD sector. A Finance Magnates Intelligence analysis highlights overlapping requirements for UK CFD brokers, including rules for reporting operational incidents and third-party disruptions through a single portal. The report also notes other emerging compliance obligations that collectively increase the sector’s regulatory burden.

FCA Flags DMBL’s Missed CFD Trades

In June 2024, DMBL launched a new order system. This led to a significant rise in CFD trading on its platform. Between June and October 2024, clients executed trades worth approximately $3.05 billion. The FCA found that these trades were not captured or reviewed by DMBL’s automated surveillance system, meaning potential market abuse could have gone undetected.

DMBL identified the issue in October 2024 but did not fully address the deficiencies until May 2025. The regulator said the delay restricted the firm’s ability to detect and report potentially suspicious trades.

FCA Reduces DMBL Fine Thirty Percent

Steve Smart, joint executive director of enforcement and market oversight at the FCA, said: “DMBL’s failures had the potential to undermine the integrity of the market. Firms must ensure they have effective surveillance arrangements in place. We will continue to take action where this is not the case.”

DMBL cooperated fully with the FCA investigation and qualified for a 30% discount on the fine. Without this reduction, the penalty would have been £482,900. The firm stopped offering CFDs in May 2025.

FCA Plans Faster CFD Oversight Tools

The FCA plans to expand its use of artificial intelligence and data tools in 2026/27 to support supervision of higher-risk retail segments, including CFDs. The regulator is developing new authorisation systems, simplifying reporting, and expanding its sandbox for AI testing.

Additional measures include fee adjustments, updates to the My FCA platform, and enhanced monitoring of financial crime and consumer harm. The programme aims to improve efficiency, risk detection, and regulatory consistency.

This article was written by Tareq Sikder at www.financemagnates.com.Retail FXRead More

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